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April 30, 2008

Putting a dollar figure on the decline

Dean Baker, co-director of the Center for Economic and Policy Research, a Washington think tank, has an analysis today about the newest S&P/Case-Shiller home price figures. He notes:
The Case-Shiller data released yesterday indicate the rate of house price decline is accelerating. The 20-city index declined 12.7 percent over the last year, while the 10-city index fell 13.6 percent. However, the annual rate of price decline over the last quarter was 24.9 percent in the 20-city index and 25.8 percent in the 10-city index. At this rate of price decline, the excesses of the housing bubble will have largely disappeared by the end of the year. At the same time, the price decline implies an incredibly rapid loss of wealth. In real terms, the rate of price decline in the 20-city index would imply a loss of almost $6 trillion in real housing wealth over the course of the year, an average of $85,000 per homeowner.

In 2004, Baker was so convinced that a bust was coming that he sold his Washington home -- which had tripled in value in seven years -- and started renting.

Posted by Jamie Smith Hopkins at 1:20 PM | | Comments (2)
        

Comments

The index does not appear to include Baltimore (although DC is in there). Anyone know what the data is for Baltimore?

Baltimore isn't on the 20-metro-area list, alas. I suspect it would be if there were 25 metro areas.

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About Jamie Smith Hopkins
Jamie Smith Hopkins, a Baltimore Sun reporter since 1999, writes about the regional economy. Her reporting on the housing market has won national and local awards. Hopkins is a Columbia native and has lived in Maryland all her life, save for 10 months spent covering schools in Ames, Iowa.
She trained to become a wonk by spending large chunks of time as a geek and an insufferable know-it-all.
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