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How Much Equity Has Disappeared From U.S. Homes Since 2006?
Since 2007, U.S. commercial property owners have lost a staggering $1 trillion of equity. Residential homeowners have lost $5.9 trillion, according to research by Zillow.com. That comes out to about 11% of Americans’ total wealth. The net worth of U.S. households at the end of June fell 19 percent from two years earlier to $53.1 trillion, according to Federal Reserve data.
The steady cocktail of rising unemployment/underemployment, tightening credit, and increasing foreclosures prevents real estate from recovering anytime soon: Home foreclosure filings surpassed 300,000 for the eighth straight month in October, according to RealtyTrac Inc. More defaults and job losses “loom over any nascent housing recovery,” James Saccacio, chief executive officer of the Irvine, California-based seller of default data, said Nov. 12.
The value of U.S. housing today is about $24.7 trillion, down 19 percent from the market’s peak, according to Zillow. Homes declined $489 billion in the first 11 months of the year.
Since 20 months of shadow housing inventory still lurk in the shadows, the residential housing market cannot have hit bottom. Once these units come online, vacancy rates will necessarily climb, and rents will decrease, further impacting the beleaguered multifamily market.
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Check out what others are saying about this post...[...] homeowners continue to throw their keys to banks, they will only add to the twenty months of shadow housing inventory already accumulating. This will only increase vacancies, reduce average rent prices, and drive multifamily valuations [...]