Zillow: Home values have fallen 27 percent since they peaked in June 2006 (how's your bottom Cramer?).

Negative Equity Rises to 27%;

Foreclosure Moratoriums at Least

Partly Responsible for Increase,

According to Q4 2010 Zillow®

Real Estate Market Reports

SEATTLE, Feb. 9, 2011 /PRNewswire/ -- Home values in the United States posted their largest quarterly decline since the first quarter of 2009, falling 2.6 percent as the temporary stimulus of the home buyer tax credits wore off, according to Zillow's fourth quarter Real Estate Market Reports. The Zillow Home Value Index declined 5.9 percent year-over-year in the fourth quarter to $175,200. Home values have fallen 27 percent since they peaked in June 2006.

Accelerating home value declines, as well as a slowdown in the nation's foreclosure rate following the late-2010 robo-signing controversy, contributed to an increase in negative equity. At the end of the fourth quarter, 27 percent of single-family homeowners with mortgages owed more on their mortgage than their homes were worth, up from 23.2 percent in the third quarter.

Less than one in every 1,000 (0.09 percent) U.S. homes were liquidated in foreclosure in December, down from 0.12 percent in October, when foreclosure liquidations peaked. Foreclosures are expected to increase again in early 2011, which may cause negative equity to fall as some underwater homeowners lose their homes to foreclosure and are no longer in negative equity.

With the end of the homebuyer tax credits in mid-2010, home value declines accelerated toward the end of the year. When they were in effect, the credits tempered home values declines – nationally, home values fell only 0.9 percent from the first to the second quarter of 2010 – but values resumed their decline after the credits' expiration, falling 2.6 percent from the third to the fourth quarter.

"While the tax credits did not hurt the housing market, they did delay its bottom by interrupting the housing correction that was taking place," said Dr. Stan Humphries, Zillow chief economist. "Home value trends in the fourth quarter remained grim, but the good news is that these declines, while painful in the short-term, mean we're getting closer to the bottom. The housing recession is likely in its death throes, and we expect to see sales pick up in early 2011. That will lead the way to home values stabilizing and an eventual bottom later this year, although it will take several months of increased sales activity before values begin to respond."

And who could forget Jim Cramer's

housing market bottom call (June 2009)...

"I am frantically trying to buy multiple properties right now." Cramer went so far as to definitively declare a bottom to the housing market. His words: "This is patently obvious."