While it's a good time to buy a home, it's a brutal time to sell. So it may pay to make your home look its best. One way to do that is via staging…
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In a surprising twist, some of the best housing numbers in eight months came out recently. We checked with Editor in Chief of AOL Real Estate Laura Goldstein. She cautioned against getting too excited, too quickly. Underlying the numbers might be a seasonal uptick and stalled foreclosures, which tend to suppress prices.
We'll continue to stay on the story, but she suspects we won't know anytime soon whether the favorable numbers will become a trend. In the meantime, it's a welcome aberration, though not one enjoyed in all metro markets.
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As new indicators on the languishing national housing market continue to stream in it remains apparent that the crisis brought about by the bursting of the housing bubble is far from over. Newly released figures reveal that the prices of houses declined with greater speed during the opening quarter of this year than at any point since the most severe consequences of the crisis became evident. This is based on information released in the Real Estate Market Report which has been made available by Zillow.
It has been predicted that the lowest point in the housing market decline will not be reached until 2012 at the earliest. If that's the case, the process of full recovery will take a period of quite a few years. Zillow's Home Value Index decreased to just under $170K, a drop of 3% compared to the 4th quarter of 2009. The company's index explains the average valuation for a designated geographic location on a designated day. It incorporates the value of all condominiums, cooperatives and single-family homes. Information relevant to mortgages and home loans are generally noted in each county and is publicly accessible via a county recorder's office.
To better understand the magnitude of the decline in the housing market, consider this: The prices of homes have, on average, decreased by just slightly less than 30 percent from the height of the peak in June 2006. That figure represents a massive hit for most homeowners in America.
Given the fact that the decline has shown no signs of slowing down during the first quarter of the year, it is overly optimistic to expect any stabilization in home prices by the end of this year. Only a small number of markets did not experience home value decreases this past quarter. The overwhelming majority of housing markets in the study (ninety-seven percent) faced decreasing values.
In light of this kind of news, it becomes increasingly clear that many Americans will require honest and authoritative assistance with loan modifications in the next few years. The burden that many are under in the present economic climate makes it simply impossible to meet existing mortgage obligations.
Home values are way down since the housing market hit its peak in 2006. The S&P/Case-Shiller Price Index, which is a measure of the home values in 20 metropolitan statistical areas is down by nearly a third since the market peaked. Although home prices were briefly buoyed by the 2009 and 2010 home buyer tax credits, they have now hit double dip territory, at least according to Case-Shiller. Different measures of home prices have yet to show a double dip, but they are all trending downward.
Since 2001, the average home equity has declined from 61 percent to 38 percent as of the first quarter of 2011. A recent report from Harvard showed that home equity went from $14.9 trillion in the first quarter of 2006 to $6.3 trillion in the fourth quarter of 2010. Home equity is now at the lowest level since World War II according to a new study from the Federal Reserve. By any measurement, this is pretty much an utter disaster.
A CoreLogic report released recently showed that 10.9 million American homeowners with mortgages are underwater (owe more on their mortgage than their home is worth). This accounts for 22.7 percent of all residential homes with mortgages. An additional 2.4 million more borrowers had less than five percent home equity.
Although price declines are not evenly spread, many people won’t recover their home equity for years, if at all. This problem is especially acute for many baby boomers who are approaching retirement age. Some people planned to fund their retirement with home equity and may have to delay those plans due to declining home values.
We'd love to hear your feedback on this situation. Will declining home values delay or change any retirement plans you had made? Are you, or someone you know, currently dealing with an underwater mortgage? Use the comment link below to sound off about the housing situation and how it's affected you or your family. Your email address will never appear on our site along with your comments.
