Declining home values mean 32 percent of Denver-area homeowners owe more on their mortgages than their homes are worth, according to a recent report by , a statistic local experts dispute.
Home values dropped 7.7 percent in the first quarter of 2009 compared with the same quarter a year ago, the report says.
“The one big statistic is the negative equity number, the number of homeowners (who ) owe more on their mortgage (than the home’s value),” Zillow spokeswoman Amy Buhtinski said. “It can be a leading indicator of foreclosures.”
But many local industry experts are skeptical of Zillow’s numbers, which are based on sales data gathered from public records that can be out of date.
“The general population has equity in their homes,” said Jack O’Connor of Prestige Real Estate Group. “We’re seeing multiple offers on properties below $300,000. We wouldn’t have multiple offers if that were the case.”
O’Connor said statistics from the Metrolist multiple listing service (MLS) are more reliable because they are in real time. It can take months for home sales to be recorded with the county.
“The data could be of such an age that what you’re looking at is not reflective of reality,” he said of the report’s analysis.
Economist Jeff Thredgold of Vectra Bank Colorado said Zillow’s numbers regarding underwater mortgages appear high for this market.
“I think that’s a valid number in Phoenix, San Diego, Tucson or Las Vegas, where home prices doubled and now they’re down 30, 40, 50 percent,” Thredgold said.
Lou Barnes, owner of Boulder West Financial Services, said a number of other organizations provide data on the housing market that are much more reliable than what Zillow released. Mortgage insurance provider PMI, for example, publishes a risk metric that indicates flat home values for the Denver area, though Zillow says there’s been a 7.7 percent decline for the first quarter compared with a year ago.
“Zillow is in the business of trying to drive eyeballs to the site to discover the value of your home and sell advertising,” Barnes said. “We are in a very painful economic crisis, and Zillow is engaged in predatory behavior to attract attention to itself by finding data that’s worse than anything else that’s been found.”
Staff writer Aldo Svaldi contributed to this report.
Margaret Jackson: 303-954-1473 or mjackson@denverpost.com
