The Real Deal Miami

Rate of underwater homeowners may grow by 30 percent in 2010

August 11, 2009 11:41AM

While the second quarter saw nearly a quarter of homeowners underwater, that number could rise up to 30 percent by the middle of 2010, according to a study from real estate analysis group Zillow.com. What’s most troubling is that home prices are still declining, even as the job market makes modest improvements. The second quarter saw median prices for single-family homes drop 12 percent from a year ago, marking the 10th consecutive quarter of decline. While other recession symptoms have eased, Zillow.com economist Stan Humphries said that the market still has further to fall. “The negative equity rate will rise and spin off more foreclosures,” Humphries said. “I see a substantial downside risk to prices and don’t think we’ll see a bottom until the middle of next year.”