This new report shouldn’t be a surprise to any HREU students. We have been preparing our students for nearly 3 years for this. There is a real estate contagion that is spreading.

Here is how it happens….

1) Home loses value. Studies prove that the rate of walk-aways dramatically increases once a homeowner is 20% upside down.

2) Homeowner walks away (foreclosure) or if they are smart they sell the home via a short sale. Either way, home sale recorded reflecting the lower market price.

3) Neighbors learn of the sale…discover that their home is upside down….and they too decide to deleverage out of their own toxic asset.

4) Rinse, wash and repeat.

Nearly half of all owners of single-family homes in the Miami-Fort Lauderdale metropolitan area were underwater at the end of the third quarter, meaning their homes were valued at less than the mortgages owed against them.

Forty-six percent of South Florida homeowners, representing 387,157 homes, were underwater at the end of Sept. 30, compared to 47 percent in the second quarter, according to a new report from Web-based real estate services firm Zillow.com

Nationally, 21 percent of homeowners were underwater as of Sept. 30, down from 23 percent in the second quarter, as home values stabilized in the short term and more underwater borrowers lost their homes to foreclosure, Zillow said.

Agents, in this market…what choice do you have other than learning how to be a Short Sale Listing Specialist. You already know that the listings that are selling are the short sale listings. Learn now how to easily list and sell short sales. Watch the FREE Agent Short Sale Secrets video and then download the FREE Agent Short Sale Secrets book.

Zillow’s home price index showed that the median price of a single-family home in the area was $168,400, down 17.1 percent from the same period a year before. Values were down 2.1 percent from the second quarter.

The Zillow index measures values of all homes, not those sold in a particular period. While values continue falling, the firm said September marked the eighth consecutive month of decreasing year-over-year price declines.

Additionally, 50 percent of all homes sold in September sold at a loss, the firm said. A small percentage, 5.5 percent, saw their values rise over the past 12 months.