Nearly 30 percent of US homeowners now “underwater”

Home prices in the US dropped 2.6 percent in the final quarter of 2010, the largest drop since the first three months of 2009, according to Zillow Inc’s quarterly real estate survey. Year over year, home values were down 5.9 percent nationally, and have fallen 27 percent since their peak in June 2006.

The total value of US single-family homes fell a staggering $798 billion in 2010’s fourth quarter, and for the entire year, more than $2 trillion...

The number of US homeowners “underwater,” i.e., owing more than their homes were worth, at the end of 2010, reports Zillow, jumped to 27 percent, up from 23.2 percent in the third quarter.

Furthermore, the report notes, “The rate of homes selling for a loss reached a new peak in December, with more than one-third (34.1 percent) selling for a loss. The rate of homes sold for a loss has increased steadily for the past six months.”

http://www.wsws.org/articles/2011/feb2011/hous-f10.shtml

Even though the destruction of family income has led to this dreadful loss of assets, as ephemeral as they are ...

Then I saw how they are thinking of capping funds to Fannie and Freddie. I don't know how the housing market is supposed to do well without them. Looks like I won't be buying soon.

Before you sign the contract find a record of how the property taxes have been tracking on the house you are considering buying. This is essential. Didn't used to be. But it is now.

When I bought this house over 20 years ago the taxes were $1200 a year. I assumed even if the property taxes doubled I would still be alright with the house after it was paid for.

I assumed wrong.

The property taxes have already just about quadrupled to $4700 a year. At the rate they are going the property taxes alone will add up to more than my original entire mortgage payment which included principal, interest, property taxes and insurance. The reason this happened is because we have lost our industrial base here in Illinois and the jobs that came with them and now those workers who used to pay into our state tax coffers are either unemployed or making less than they were a few years ago. So to make up for the loss of income from those withheld taxes the state is now trying to make up for it by increasing our property taxes.

So now after this house is paid for in a few years we won't be able to live here because of the property taxes. Pretty tough to pay and take good care of a home and then after you get it paid for and you become retired you can't afford to live there any more.

Don

Let the banks eat the value destruction they are responsible for.

As a side benefit if enough people do this it would detonate all the TBTF banks, as has long been deserved.

Just curious.....

Ignoring the fact that Zillow really doesn't have the data to make this type of determination, there's still the larger problem that the headline above doesn't even reflect what the report says.

This is the number of those who have a mortgage who they estimate are bellow water. Most people would be shocked at the percentage of homeowners who don't even have a mortgage.

It's also instructive to consider where Zillow gets their numbers and how well their sample represents the rest of the market.

my house dropped $4,000 last month. And I live in a very working class neighborhood. Not a McMansion within 10 miles from here. How the HELL does a house drop $4,000 in ONE MONTH?

what is the point?

Guessin you underwater people be screwed!