Chris Chmura is quoted in a recent Richmond Times-Dispatch article by Carol Hazard:

Home values in the Richmond area continue to decline, although prices here and elsewhere may soon stabilize.

About 20 percent of homeowners with mortgages in the Richmond area are underwater, meaning their houses are worth less than what is owed on them, according to a first-quarter real estate market report by Zillow, an online data company.

What's more, houses here have lost 5.15 percent of their value from a year ago, falling to a median value of $195,600 in March, the report says. And 12 percent of all home sales in the Richmond area in March were foreclosure resales, putting downward pressure on prices here.

Nationwide, 23.3 percent of all single-family homes with mortgages were underwater in the first quarter, up from 22 percent a year ago, the report says. U.S. home values fell 3.8 percent from a year ago, according to Zillow. Foreclosures made up more than one-fifth, or 22.2 percent, of all U.S. home sales in March.

"I think the Richmond area will soon see prices start to rise again," said Christine Chmura of Chmura Economics & Analytics in Richmond.

"Richmond has fared better than many other regions around the country because our over-building was not as significant and prices did not rise as rapidly," she said. "As a result, our foreclosures rates are not as high."

The average price of a home sold in the Richmond area in the first quarter was $190,067, according to the Virginia Association of Realtors. It peaked at $268,237 in the second quarter of 2004.

Zillow's data on home values and appreciation is based on an index calculated as the median value of all homes in a geographic area, with half valued for more and half for less, not just homes that have recently sold. The data is then weighted according to population in each area. Data is aggregated from public sources in 135 metro areas.

Zillow chief economist Stan Humphries said he expects to see home values hit bottom in the third quarter.

"When we do get there, we expect the high rates of negative equity and foreclosures to keep national home value appreciation near zero for some time, possibly as long as five years," Humphries said.

That said, home values in large California markets, such as Los Angeles, San Diego, San Francisco, Santa Barbara and Ventura, have stabilized over the past year after reaching their lowest levels last spring.

"It's a very positive sign that several large markets have hit what appears to be a tentative bottom in home values," Humphries said. "While this is no guarantee that home values there will not fall again, it is more likely than not that they will remain above their lowest point last year."

The Richmond area was among 106 of 135 metropolitan markets tracked by Zillow that saw home values decline from a year ago.

Lacy Williams, a Realtor with Joyner Fine Properties, said the Richmond area has a large inventory of houses for sale -- a nine-month supply of single-family homes and a 10-month supply of condominiums and townhouses.

A healthy inventory is a fourto six-month supply, meaning it would take that long to sell all the houses at the current sales rate.

"If our inventory stays high, prices will continue to drop," Williams said. "The good news is there is a lot of activity. We were worried about the federal tax credits expiring last month, but we are still seeing a lot of sales."

Virginia had the seventh largest percentage of homes, about 24 percent, with mortgages in negative equity at the end of 2009, according to a report by First American CoreLogic.

Nevada had the highest percentage of negative equity, with 70 percent of its mortgaged properties underwater, followed by Arizona, Florida, Michigan, California and Georgia.