US Housing Market Reaches Depression-Era Milestone

A new report from Zillow research predicts a further decline in home prices because of increased foreclosures and high inventory. More than 1.17 out of every 1,000 homes in the U.S. were liquidated in September, the highest number since 1996. Furthermore, the high level of foreclosures is expected to remain elevated as the number of homes with negative equity increased to 23.2%, up from 22.5% in the second quarter. This surge in distressed sales has taken its toll on Zillow's Home Value Index, which dropped 0.4% from August to September and 4.3% from September 2009. The firm expects the decline to continue into 2011 with a potential bottom sometime in the first half at the earliest. The firm noted:
With home values 25% below their peak and 51 consecutive months of declines, the length and severity of the current downturn is fast approaching the length and depth of the Depression-era housing declines. From the end of 1928 to the end of 1933 (60 months), nominal home values fell 25.9% according to Robert Shiller’s reconstruction of long-term home price appreciation in the United States.


 
 
 
 
 
 
 
 
 
 
 
 
 
 
Black Swan Insights

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2 comments:

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    1. The housing market will tale ten years to recover fully..

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