We’ll pass on Zillow’s report on the percentage of Bay Area homes that are underwater as it relies on “zestimates” of current market value. And well, let’s just say we find the accuracy of Zillow’s zestimates to be anything but (accurate).
That being said, a key paragraph from the Chronicle’s coverage of the study:

“The last recession in 2001-02 coincided with an upswing in housing market values so one could use home equity as a source of money to get them through, to smooth over volatility in their income stream,” Fleming said. “That ability to use home equity as a source of income in times of economic stress now is removed” for many people.

And we are a bit more comfortable with the part of Zillow’s study that simply reports the percentage of homes that have sold over the past 12 months for less than their previous recorded sales price:

San Francisco 17.2%
Alameda 47.6%
Contra Costa 59.3%
Marin 24.1%
Napa 43.1%
San Mateo 30.2%
Santa Clara 40.1%
Solano 62.0%
Sonoma 49.9%
Bay Area 46.7%

Unlike our apples, however, not controlling or accounting for any improvements or investments (which likely results in an underreporting in the percentages above).
Bay Area homeowners owe more than home’s worth [SFGate]

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Comments from “Plugged-In” Readers

  1. Posted by Michael

    With around 6K sales in San Francisco over the past year that’s over 1,000 sales at a loss. That’s incredible.

  2. Posted by Home Girl

    OK, I am going to have to be the one to expose my ignorance. What IS all this stuff about apples?

  3. Posted by Foolio

    Not really. With so much of the “demand” the last few years from speculators rather than real buyers, it’s only going to drop lower.

  4. Posted by Jimmy (Bitter Renter)

    How embarrassing it must be to actually lose money on California real estate. Especially in SF!

  5. Posted by San FronziScheme

    Home Girl,
    An apple is a property that changes hand twice without much work done between the sales. this helps judging whether a property/seller gained or lost value/money.
    An apple on the tree is a property that is being listed in the same shape as its last sale. It’s not an apple-to-apple comparison yet as it still needs to be picked.
    If any major work/improvement has been done, it’s not an apple. Call it an orange.

  6. Posted by Home Girl

    San FronziScheme: Appreciate the clarification. Thank you.

  7. Posted by Joshua Dorkin

    I’m with you on the Zillow data . . . as for apples, I’m glad there was a clarification. I thought I was the only one who was clueless!

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