. home values fell again in the first quarter, posting a year-over-year decline of 14.2%,[/b] according to the Zillow Real Estate Market Report for the first quarter of 2009. The report encompasses 161 metropolitan areas. Declining home values left over one-fifth (21.9%) of all American homeowners with negative equity by the end of the first quarter, according to Zillow. By comparison, 17.6% of all homeowners owed more on their mortgage than their property was worth in the fourth quarter of 2008, and one in seven (14.3%) was underwater in the third quarter of 2008. Nine consecutive quarters of declines have left eight regions – including the Modesto, Calif.; Stockton, Calif.; and Fort Myers, Fla. regions – with median value declines of more than 50% since those markets peaked. In 85 of the 161 markets covered in the report, the annualized change over the past five years is negative or flat. Zillow also determined that potential sellers appear to be holding back until evidence of an improved housing market. In a separate survey of homeowner sentiment, almost one-third (31%) of homeowners said they would be at least somewhat likely to put their homes on the market in the next 12 months if they saw signs of a recovering real estate market. ‘Slowing declines in select markets are a bright spot, or at least, what passes for one given current market conditions,’ says Stan Humphries, Zillow vice president of data and analytics. ‘Unfortunately, given the magnitude of the current rates of decline, we're still many months away from a bottom, even as depreciation slows. Moreover, the additional information we have this quarter on 'shadow inventory,' with one-third of homeowners indicating they would like to put their home on the market if conditions improve, confirms our earlier fears that a bottom in home values could be quite protracted. SOURCE: Z