Stan Humphires, Zillow

-- financial exchange on the WRKO. Radio. -- -- getting pretty impressive real estate numbers for the last few months it seems as if perhaps we hit the bottom of the real estate market -- who were bounce and along the bottom now. Did get a study yesterday released by zillow dot com about negative equity stands zillow chief economist of zillow. Dot com joins us today on the financial exchange stand welcomed the show. Good morning so stand how many homeowners are sitting in a situation where they have negative equity in their house today. So now actually spell one in three homeowners so about 30% of homeowners with a mortgage or negative equity situation whereas. In Boston that number's quite a bit lower it just got one in five -- one of the mortgage or negative equity. Is this and improving number or worried they get what was the worst it was during the high heat of the that the housing downturn. Well bump we've only got Dave this is. Methodology did actually tied into consumers' actual outstanding mortgage balance but the credit -- that's very detailed methodology and we'll have data going back about six quarters. And it has been trending down it was at its highest. About a year ago and then courtesy of stabilization home prices. You know home -- nationally -- up about one point 2%. Over the past years and that's helped to actually -- the number down. And between India first and second quarter nationally that we fell about 1%. Into the negative equity imminent Boston. We saw about a 2% improvement negative equity so it is slowly getting better and it is you know consistent with the overall picture we're seeing out on the market slowly healing. This would seem to be a young person's affliction -- -- based on your your stats I'm looking edited sound. You know if you're in the each group of thirty to 34. Half of those homeowners are underwater. That's right yes I did it it's been really hard aren't on your homeowners because they're more likely to have bought just -- of war BP or during the downturn nerve where -- suffered larger number I declined -- more of them that you said about half of people under forty years old. -- negative equity now if there's any silver lining there is that while other underwater they're relatively shallow water relative to their older book award to those people were above forty. There's fewer of them in negative equity but I mean if you're a negative equity you're probably more underwater than a younger person. No it seems though that the young people today -- -- first time homebuyers are probably going to benefit from the stay unique. They're they're buying places and there immediately gaining equity because we seem to be having rising prices. That's right people get into the market now are definitely seeing an environmental which. You're Europe the prices stabilized we think we're at the bottom -- -- that we think that the Boston market bottomed out late last year's that we think that we're we're seeing. Now we we do think art appreciation is going to be fairly moderate in -- immediate aftermath of the bottom but still it didn't practice time for buyers but there's been such. A -- at home right now unfortunately the negative equity in the younger. Cohorts of homeowners. Does present some of -- a supply issue but he -- first time homebuyers because they're trying to they're trying to by the home. That these under forty year old or occupying and a lot of them are negative equity meaning that they can't but there on the market at WW homebuyers. Well how how when you say it's gonna be moderate increases in prices how moderate and for how long. Well in the Boston market for the next year we're essentially expecting up prices to basically tread water to connect twelve month. Generally don't -- markets were speculating -- an environment where -- to four years after the bottom. Received more than one to 3%. -- appreciation home value and then after that before -- period we get back to a more normal range were normal. Returned to housing annually is about two and a half to 5% per year. So we're thinking sixteen years -- sixteen his -- is how long we have to wait before we see. A return to a healthy housing market another four years. Depending on the market to look for years but yet keep it below -- -- fifteen depending on. How much negative equity you have what the and every foreclosure you have -- a market. All right we -- Weiss suggests small number or percentage of first time homebuyers sayegh and I think it was an -- as a result but another reporter read. Only 34% of homebuyers are first time homebuyers is a lot of pent up demand. Well you are seeing I think for the first several market segments they're being hit probably hard but by two if you wanted to build the lending standards. Are are still somewhat -- step particularly of course relative to where they were 2000 -- to -- doesn't. The other issue actually allowed to market there was supply issues where. Home to these people are trying to let the -- first time homebuyers are lands occupied by people were negative equity. And it is still there comes to be my first time homebuyers sourcing really huge supply shortages in markets like Miami and Phoenix. Where you know the low end of the market if you look at the bottom third and home. Inventory there and Phoenix who dropped 66%. And in the low end subsidies have phenomenal kind of drying up of inventory they're -- -- to be -- for -- -- -- to get the help that they want. America will stand thank you very much for joining us appreciate your insights. Thank you Stan Humphries chief economist of zillow dot com joining us today on the financial exchange.