U.S. Property Owners Lost $3.3 Trillion in Home Value Last Year

U.S. Property Owners Lost $3.3 Trillion in Home Value Last Year

http://www.bloomberg.com/apps/news?pid=20601087&sid=aE29HSrxA4rI&refer=home

By Dan Levy

Feb. 3 (Bloomberg) -- The U.S. housing market lost $3.3 trillion in value last year and almost one in six owners with mortgages owed more than their homes were worth as the economy went into recession, Zillow.com said.

The median estimated home price declined 11.6 percent in 2008 to $192,119 and homeowners lost $1.4 trillion in value in the fourth quarter alone, the Seattle-based real estate data service said in a report today.

“It’s like a runaway train gaining momentum,” Stan Humphries, Zillow’s vice president of data and analytics, said in an interview. “It’s difficult to say when we’ll see a bottom to the housing market.”

Is it any wonder no one wants to spend $ nowadays?

And the one in six in negative equity are either recent victims of the false value inflation or suckers of the equity loan scams. At some point you have to recognize that the underlying value of a house is the cost of the land, the cost of the materials, and the cost of labor. How an acre of land, 35k in materials, and six weeks of labor by perhaps four workmen per day was equated to a quarter million dollars escapes me. My home is worth in reality perhaps twice what I bought it for in foreclosure and damaged in 1996 but never had near the 4x valuation it still holds for tax valuation purposes.

And how they expect there will ever be purchasers for any homes when the safest jobs left are near minimum wage and in the "service" industry escapes me. Median price 192K??? It is to weep.

My wife and I would love to buy a house, but we live in San Diego and the median price, approx 350K or so is still beyond our means. As far as I'm concerned, let the price of home ownership drop. drop and then drop some more.