Disappearing now: $6 trillion in housing wealth

uscitizen

uscitizen

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L.A. Land: latimes.com

Disappearing now: $6 trillion in housing wealth
Washington think tank is warning that housing prices are falling at an accelerating level, destroying wealth at a pace that will cost the average homeowner $85,000 in lost wealth this year alone.

The projections by the Center for Economic and Policy Research are based on the numbers in Tuesday's Case-Shiller home price index, which showed accelerating price declines in most big cities.

The annual rate of price decline over the last quarter was 24.9% in the 20-city index and 25.8% in the 10-city index," the center said in its Housing Market Monitor today. "At this rate of price decline, the excesses of the housing bubble will have largely disappeared by the end of the year. At the same time, the price decline implies an incredibly rapid loss of wealth. In real terms, the rate of price decline in the 20-city index would imply a loss of almost $6 trillion in real housing wealth over the course of the year, an average of $85,000 per homeowner."

http://latimesblogs.latimes.com/laland/2008/04/disappearing-no.html
 
The wealth was created in the bubble, it was phoney and now prices are coming back to what supply and demand allow. It will go lower than real values at the bottom but will stabilize and be back to real values around 2010. Sure I "doubled" my housing wealth in 02-06 the same way we're "losing" 6 trillion or whatever now.
 
yeah pretty much except that many had used their home equity as a credit card....
I wonder if property tax rates are dropping accordingly ?
 
uscitizen said:
I wonder if property tax rates are dropping accordingly ?
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No they will go up, these cities made worse bets than the builders and developers and have these grand schemes planned they were to pay for out of property taxes and permit fees. Now those projections are WAY off and how do you think thet'll foot the bill?
 
Obfuscate said:
The wealth was created in the bubble, it was phoney and now prices are coming back to what supply and demand allow. It will go lower than real values at the bottom but will stabilize and be back to real values around 2010. Sure I "doubled" my housing wealth in 02-06 the same way we're "losing" 6 trillion or whatever now.
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Thank you! I was gonna say the same thing. The housing market was overvalued and these people are simply losing what they thought was the potential value of their home less the actual value of their home. They're losing potential value if anything, but to suggest they've lost any real money is wrong. They shoulda sold their property if they wanted to profit. I know I did. I made 35K on a 110K home and I might have been able to make 50K had I sold it 6 months earlier.

Can I write off my loss?
Nope. It never existed
 
Dems love the woe is me card from a slight downturn. Problem is the big picture doesn't interest them. So they proceed to make assinine economic statements.
 
uscitizen said:
For individuals it is not a loss but it is for businesses.
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I can see how a large corporation that holds a bunch of real estate that it intends to sell might have to take a loss when estimating the value of it's holdings, but what other business would be able to claim a loss? Just wondering. Maybe insurance companies that were obligated to fix homes that were no longer worth the replacement value? Can't really think of too many others
 
Can you, they keep the real estate on their books at the price they paid. So both of you are wrong. But he would have been funnier.
 
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