Housing prices still falling

Home prices in 20 markets fell 2.2% in March and were down 18.7% in the past year. Can you say OUCH! How about UNDER WATER? Perhaps you'd prefer YIKES.

With interest rates at historical lows you'd think home prices would at least stabilize if not rise, but that news doesn't appear anywhere on the horizon.

The largest investment most families make is purchasing a home. There's no question - American families are poorer than they were last year or the year before. But how poor are they?

The value of US housing is around $20 trillion. That's nearly double the value of the GDP. It's a big number.

With housing prices down 18.7% in the last year Americans have lost $3.7 trillion. Since the peak in 2006 housing has lost nearly 40% of its value or $8 trillion. That's approximately $25,000 for every man, woman & child in the USA. If you're married with 3 kids then your share is 5 x $25,000 or $125,000.

With that much equity wiped out people have little incentive to stay in their homes.

Who knows how much further it can fall.

How low can it go?

I purchased a lot in a high end subdivision in 2005. I thought I was getting a deal since the people I purchased it from paid 50% more than I was paying. In fact, they had to bring money to the closing.

Figuring the worst of the subprime disaster was over I decided to see what the lot was worth. I checked on Zillow - good news it was actually worth more than I paid for it.

So I decided to proceed with my plans to list it. Now comes the interesting part. I googled realtors for the city and subdivision where the lot is located. There were a bunch of hits with beautiful web sites. (I'm easily taken in by a good looking website). But when I tried to contact these realtors I got no response - again and again. I can only believe that they've either gone out of business or real estate sales are now a part time / weekend thing for them and they have taken a job doing something else.

Finally I managed to get a live human being - although I'm not sure how dedicated he was to his profession. He suggested I list the lot for 50% of what I paid for it. I mentioned the Zillow estimate and he scoffed.

Thinking something must be wrong I decided to get a professional appraisal done. Sure enough it was within a few % of the Zillow estimate.

What has happened to the real estate 'profession'? They don't answer the phone, the don't return messages, they don't read email and they don't have a clue.

Real estate professionals - another victim of the subprime meltdown.