Home Values and Party Control

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The average American home is worth 21% less now than it did five years ago and the market is glutted with cheap foreclosed houses. This is terrible for people who need to sell their homes, but are carrying mortgages that are bigger than their houses are currently worth.

Mortgage rates are at historically low levels, which combined with low home values should help new home buyers to enter the market.

Unfortunately, since a lot of this housing demand will be soaking up cheap supply created by foreclosure, Zillow expects home values will continue to fall modestly in most markets, even while home sales are rising.

Source: http://www.zillow.com/blog/research/2012/02/08/home-value-declines-pick-up-in-fourth-quarter-but-zillow-forecasts-smaller-declines-in-2012/

H/t: itooktheredpill

6 Comments

Filed under Democrats, Economy, Republicans

6 responses to “Home Values and Party Control

  1. Ting

    I kept hearing during 2006 and 2007 that home values were probably about 20-30% too high. I sort of believed that, but I also knew how much it cost to build them properly, which was not necessarily the industry standard. If you built a house too last back then you could make a little money, but not a killing. Now I wouldn’t build a spec house if you put a gun to my head.

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  2. Violet

    We got a double-whammy in that our ‘hood was hit by a tornado last year, further eroding home prices. My house is now worth a third of the 2002 purchase price. It worked out okay for the H and me, though, because we were in foreclosure, and the sheriff’s sale bid was so low that we were able to redeem the property. Now we own our home 100% free and clear.

    How did we get into foreclosure? By trying to modify our loan under the Obama administration’s HAMP program. 2 years of timely ‘trial mod’ payments, and thousands of pages of paperwork later, the bank denied our mod and foreclosed. It would never have happened if we’d kept our original terms. HAMP was an absolute racket that has destroyed thousands of people’s credit, including ours, for the next decade, but taught us valuable lessons about where to place our trust (not in the bank or the government, and ESPECIALLY not when they are in collusion together).

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