Posted on 12/15/2008 10:19:51 AM PST by BGHater
Homes in the United States have lost trillions of dollars in value during 2008, with nearly 11.7 million American households now owing more on their mortgage than their homes are worth, real estate website Zillow.com said on Monday.
U.S. homes are set to lose well over $2 trillion in value during 2008, according to an analysis of recent Zillow Real Estate Market Reports.
Home values declined 8.4 percent year-over-year during the first three quarters of this year, compared to the same period in 2007, the reports showed.
U.S. home values lost $1.9 trillion from the first of the year through the end of the third quarter, and will probably fall further in the fourth quarter. One in seven of all homeowners, or 14.3 percent, were "underwater" by the end of the third quarter, the reports showed.
"This year marked the acceleration of the market correction, and is likely to end with the eighth consecutive quarter of declines in home values," Dr. Stan Humphries, Zillow's vice president of data and analytics, said in a statement.
"In general, homeowners in most areas we cover are struggling with foreclosures pouring into the market, large amounts of negative equity and dropping home values. On the positive side, in the third quarter, some markets - particularly those hit hardest in the downturn - showed smaller year-over-year declines than in the prior quarter," he said.
"Our optimism here, though, must be tempered by the knowledge that the larger economic problems that emerged in the fourth quarter will likely further challenge the real estate market," he said.
(Excerpt) Read more at reuters.com ...
that’s a lot of deflation...wow
My house is my home, not an investment. The amount of my monthly payment has not changed because I have a thirty year fixed loan. I have not lost anything. I am living in the home I chose for the amount I agreed to pay. I do not care what my house is worth to others because it is not for sale.
Exactly.
I thought affordable housing was a good thing.
At least that is what our local politicians tell us when they try to erect their scummy housing projects in good neighborhoods.
These articles never point out that the elevated prices at the peak of the market were illusory, that such value never really existed.
The houses prices during the Bubble never represented "value". That was and is the current problem.
You can't "lose" something you never had in the first place.
Can I get an AMEN?!?
All this talk of homes "losing value"...yes I realize how it works on paper, and we have to account for values somehow...but nobody seems to offer a different way of looking at it...that, perhaps, the homes were OVERVALUED to start with, and have been correcting themselves.
The article says 11.7 million have negative equity. Not all these are in forclosure. Two of my kids didn’t buy during the boom, but both bought after housing values declined. What they didn’t know was the values would continue to fall. Both have good loans they can afford, but both are negative $100K+.
The real question is, “To what extent will property taxes rise on those existing homes, and will people who managed to keep their home, be squeezed by the tax increase?”
Rapid appreciation in home values isn’t a good deal for the homeowner anyway. If you’re going to change houses, the one that you’re moving into will have appreciated similarly. In fact for anyone moving up in house (which is more common than moving down), appreciation will hit them.
Then the RE brokers and property tax collectors get a lot more money in exchange for doing the same work as before. Homeowners insurance payments go up, for providing functionally the same service as before (replace the home).
The only people for whom steep appreciation is a good deal are those cashing out of the market or moving to a geographical area that hasn’t bubbled.
People wouldn’t want the price of cars to go through the roof merely because they own a couple.
Glad to see that FReepers on this thread have the right philosophy. A house is more valuable than a pricey work of art - it has utilitarian worth - or value added.
Houses built in the decades before the 2005-2007 “bubble” hysteria have not lost any value - they are still worth more than the original purchase price(s).
A question has to be - for all those sellers who made huge profits during the “bubble” - where is the money? Probably invested in a “new” or upgraded dwellings.
I spent six years yelling similar comments at the television. Many of us saw the bubble and rightly predicted how it would play out. It was very disappointing that those with the power to act failed to do so.
So true. We had to clear the title of a family owned house at the peak of the bubble. It was a real shakedown and it was very frustrating that the property appraiser was complicit in the shakedown.
Even if it’s not a bubble and prices stay high, it’s still a ripoff for the homeowner for the reasons I listed.
Exactly right. We bought our house in 1977 when I was still in college, for $18,500. We have no kids so never needed anything bigger and we aren't the gotta-keep-up-with-the-jonses types so no need to move. Paid the mortgage off a quarter-century ago.
As Zevonismymuse said, our house is our home; what we could sell it for at this particular moment is not relevant to us.
It is all just Monopoly $$$. Umgud’s kids will be fine. They just need to sit tight, pay their mortgage and everything will work out. They are living in their home, making payments they can afford. At some point interest rates are going to shoot up and even if housing prices are dirt cheap, payments will probably exceed the amount umgud’s kids are paying because of their low interest rates.
Soooo.... how many TRILLION did the home prices go UP in the last few years??? More than 2 trillion.
That sure is a lot of inconvenienced electrons.
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