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Zillow: Home value declines during Q1 2011 worst since recession

Home values fell during the first quarter of 2011.

Home values fell during the first quarter of 2011.

According to Zillow's Real Estate Market Reports for the first quarter of 2011, the housing market experienced the worst period of home value declines since the recession in 2008.

Zillow's Home Value Index dropped 3 percent from Q4 2010 and was down 8.2 percent year-over-year, settling at $169,000. The 3 percent quarter-over-quarter drop was the largest slide since the last quarter of 2008. Since home values peaked in June 2006, the market has experienced a 29.5 percent drop.

"Home value declines are currently equal to those we experienced during the darkest days of the housing recession," said Zillow chief economist Stan Humphries. "With accelerating declines during the first quarter, it is unreasonable to expect home values to return to stability by the end of 2011."

Negative equity also recorded new levels, growing to 28.4 percent of all single-family homes, which is up 27 percent quarter-over-quarter. The number of families with past-due mortgage is directly tied to the plummeting home values, though, as homeowners are unable to sell their property for anything close to the value of their remaining mortgage.

While the market appears to have hit rock bottom, Zillow predicts the bottom for home values won't be seen during 2011, but instead, achieving this low level will most likely be experienced during 2012 for those interested in moving.