How much more fictitious value will the U.S. real estate market lose?
At the beginning of this year, I pointed to Eric Janszen’s Harper’s cover story “The Next Bubble: Priming the Markets for Tomorrow’s Big Crash.” For the moment, I just want to visually quote one graph from the article:
Note the large blue shaded area, which represents the “fictitious value” (the portion of prices brought on by asset hyperinflation) that accumulated in the United States real estate market between 1990 and 2007.
This graph came to mind today when I encountered this sobering news item:
U.S. Home Values May Fall by $2 Trillion This Year, Zillow Says
This comes on top of a $1.24 trillion decline in home values during 2007. So if Zillow’s numbers are about right, that’s three-and-a-quarter trillion dollars of value lost just on the housing side of the real estate market in two years.
By nature I’m an optimist, but it’s numbers like these that convince me that the bumpy economic ride we’ve been having is going to last a good bit longer before it smoothes out.
~
Category: Economics, Finance & Real EstateIf you liked this post, please consider subscribing to the RSS feed so you can receive future articles delivered to your feed reader.
2 Comments so far
Leave A Comment
I firmly believe that while the real estate market might not be at it’s best, 2009-2016 will prove to show great value appreciation for all property in real estate, which will increase cash flow, generated income and capital growth for the entire American real estate market. And I’m no expert.
Love the real estate graph! I also track trends and have some serious value concerns for the next few years (minimum).