US Home Values To Drop $1.7 Trillion In 2010

[marmar]

from 24/7WallStreet:




US Home Values To Drop $1.7 Trillion In 2010
Posted: December 9, 2010 at 8:14 am


The aggregate value of homes in the United States will drop $1.7 trillion this year after a drop of $1 trillion in 2009. That data comes from a report from real estate research firm Zillow.

Zillow also says that “Since the peak of home values in June 2006, more than $9 trillion in values has come out of the housing market.”

Several analysts believe the free fall is not over. Recently S&P predicted home prices could drop another 7% to 9% next year. The trend is based to a large extent on high unemployment and the fear of potential home buyers that price will dive further. Banks are also reluctant to make mortgage loans to all but the most credit-worth buyers.

Nearly 11 million mortgages are underwater in the US. Economists say that the owners of the homes with these mortgages are more likely to default because they see not financial future in holding the real estate particularly if they are in financial difficulty. RealtyTrac estimates that total foreclosures and bank repossession of homes will rise to 3 million this year. There is also a “shadow inventory” of about 2 million homes which have been foreclosed upon but not put onto the market for sales. .............(more)

The complete piece is at: http://247wallst.com/2010/12/09/us-home-values-to-drop-1-7-trillion-in-2010/#ixzz17ci0sXHo

[xchrom]

1. god. it just doesn't stop. nt

[n2doc]

3. It won't until prices get in line with wages

And wages aren't going up.

However, this chart seems to suggest that the worst is over:



Another 10% drop would put us on the long term average.

[abbiehoff]

7. Nice chart --

It would seem to indicate that the house we bought in 1992 would be worth more today than it was 18 years ago. We tried all summer to sell said house, eventually listing it for slightly less than it was listed at the time we bought it. No takers.

[n2doc]

8. Well it is a national chart.

I know prices in many areas (SF-bay area, for one, Seattle for another) are still way higher than they were a decade ago.

[SoCalDem]

2. Unless something is done about this, people with "newer" mortgages

will get tired of being chumps & will walk away.. Business types do this all the time, so why should potential homeowners have to just take it?

People who have been in homes for a while and who plan to stay will probably not walk away, but for people who bought high, it may be their only choice.

The sad thing is that this whole mess could have been handled at the beginning of the bailout-season, and could have gotten the bad loans off the books for the banks, but they wanted the free money AND to keep the nasty loans. They are still hiding them in the "basement", but they probably know they can just keep tweaking the books until things pick up, or until they can start repackaging them like they used to.

Instead of throwing money at banks, the govt could have issued vouchers equal to the loss in value of the mortgaged homes TO THE BUYER, who would have "cashed it in" at the bank, and the bank could have cashed it in at the FED...Everyone would have won..and money freed up, would have been spent....and houses would have been fairly valued.

A contingency could have been put in that kept the buyer from selling (for profit), for "X" number of years.

[xiamiam]

5. or reinstate the bankruptcy clause for personal residences which they got rid of in 2005

nothing has been done to fix this..i am so pissed

[Poboy]

10. I agree, if I were substantially underwater I would not walk, but skip

away. You provide decend solutions, but that ain't happening. I would say fuck it, and fuck them!

[xiamiam]

4. why? becaused the bogus loan modification program has made things worse

and now millions..tens of millions who have been advised to not pay their mortgages are going to be denied..and no one is going to stop it..no one..look for free fall in the next 6 to 8 months

[NNN0LHI]

6. Value of mine has dropped about a third already

But my property taxes went up over $1200 this year.

Something is going to have to give.

Don

[Nye Bevan]

9. Good. Houses are still overpriced.

I hope prices continue to drop so that my kids have a better chance of one day owning homes of their own.

[tjwash]

11. So they are going back to before the 2005 bubble levels finally?

[bemildred]

12. Don't worry, it's going to level out someday. nt