Home Values Drop $2 Trillion in ‘08
By Alan Stewart Carl | Related entries in Economy, Housing
As we all know, no sector of the economy has been hit by the recession as hard as the housing market. Now, new numbers indicate that American home values have lost $2 trillion in value during the first three quarters of 2008. Around 11.4 million homeowners are now “underwater†on their homes, owing more than their homes are worth.
For financially sound homeowners who are not planning to move, a decline in home values is more of an annoyance than a crisis. Values will rise again eventually. But for homeowners who’ve lost jobs or bought too expensive of a home to begin with, being underwater in a home loan is a major problem. If you need to sell your home but can’t sell it at a price that will cover what you owe on the mortgage, you’re financially trapped.
Unfortunately, our housing market got caught in a cycle of rampant speculation which drove prices above sustainable levels. There is no simple solution for homeowners who bought at the top of that cycle and are now burdened with more debt than assets. But finding a solution will undoubtedly be a focus for the new administration.
This entry was posted on Monday, December 15th, 2008 and is filed under Economy, Housing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
December 15th, 2008 at 12:48 pm
“For financially sound homeowners who are not planning to move, a decline in home values is more of an annoyance than a crisis.”
Well, this homeowner just got his property tax bill and found it had dropped $80.
I’m ok with that.
December 22nd, 2008 at 1:18 pm
I think we have to get a 2nd loan and then drop the first one. That’s one way for getting better conditions for the next 20 – 30 yrs…