Posted by 101livescan on 7/8/09 9:01am
Msg #294970

Where Home Values Have Fallen the Most

This is a great survey of housing market and where values have slumped the most across the country.

http://realestate.yahoo.com/promo/americas-fastest-falling-neighborhoods.html;_ylc=X3oDMTFiMmk4Y3VyBF9TAzI3MTYxNDkEc2VjA2ZwLXRvZGF5BHNsawNmYXN0ZXN0LWZhbGxpbmc-

Reply by ME/NJ on 7/8/09 9:14am
Msg #294974

My area of Jersey has taken a hit in values in the last 45 days or so. values have dropped 20% in last year and 5-6% in last month alone.

Reply by Glenn Strickler on 7/8/09 10:17am
Msg #294986

Not the whole picture

Exerpt from article:

"A neighborhood had to be within the city limits, have at least 10 sales, and prices had to be above $150,000. Otherwise, our list would be a rundown of markets barely on life support, such as Briggs, Detroit, where prices over the last year are off 96% to a median price of $2,500."


That really leaves out most of the country. We have areas here in CA where home values have dropped from $300k to $40-$60k. And these were nice homes for $300k.

Reply by MichiganAl on 7/8/09 3:45pm
Msg #295027

Re: Not the whole picture

Yeah, Detroit is so bad that it doesn't qualify for the survey. Why let the facts get in the way.

Reply by MW/VA on 7/8/09 1:49pm
Msg #295019

Thanks for posting this article--it is interesting. I have seen this kind of thing before, not as extreme as now though. In the late 80's it was because of high interest rates. The early 90's say foreclosures when people's ARM's adjusted & they walked away. IMO a foreclosure pulls down the value of the whole area. It baffles me & shouldn't be that way, but that's how the RE market works. We have a vested interest in what happens to our neighbors.

Reply by JanetK_CA on 7/8/09 8:38pm
Msg #295060

"It baffles me & shouldn't be that way, but that's how the RE market works."

It's as much about how our banking system works as it is about how the RE market works. What happens is that once the property is foreclosed, it's then owned by the bank which eventually sells off a bundle of these at huge discounts to get them off their books. The buyer is typically an investor who doesn't do anything with the property except flip it to another investor. This can happen multiple times, and each time the sale records it adds another very low purchase price to the local comps. As you said, that affects home values in the entire neighborhood. That means that someone who is trying to refinance an adjustable may now have trouble qualifying because, based on comps, they now don't have enough equity. That can eventually turn into another foreclosure, and the cycle continues.

There are solutions to this, but the banks are making stupid decisions that are perpetuating the problem and costing them more in the long run. We're going to see many more foreclosures over the next couple of years, sadly.