"It's clear we are at a unique point in history; we've had seven consecutive quarters of decline, and we expect that to continue until at least the middle of next year. Most markets are still seeing five-year annualized returns, but we will see more markets slip into flat or negative long-term change as the economy continues to suffer, factors like job losses begin to further affect foreclosure rates and home values continue to decline," he said.
Foreclosures made up almost one in five, or 18.6 percent, of all transactions in the past 12 months and areas with the highest foreclosure rates are the markets with some of the greatest home value declines. In California's Central Valley, 57.6 percent of transactions in Merced were foreclosures, and in Stockton, foreclosures made up 56.4 percent of transactions. The New York metro area continued to have the lowest rate of foreclosures, with only 3.5 percent of all transactions being foreclosures, the reports showed.
Whats a homes value.....? It's worth what someone will pay for it. People were on a feeding frenzy. Price went up much higher than they should have been and now many have got left holding the bag.
The cheap interest rates fueled the upswing in prices. That upswing was also fueled by bringing more people into the market...people who would never have normally been able to borrow money because of no credit, poor credit, or not enough income.
All of the above in combination with the high inflation rate we experienced in 2007 created aberrations in the market.
The collapse of values was exacerbated by defaults from those with so-called balloon mortgages (wherein you agree to take a temporary loan for a few years and the refinance the entire balance with a "regular" mortgage later). Those with balloon mortgages found themselves in a very peculiar and dicey situation...they still owed the lion's share of the original amount they borrowed, but now the home value had fallen below what they still owed.
It may be a great time to buy, but you'd better know why you are buying and for how long. The days of "flipping" homes may be over, at least for a while.
If you think about it, you could almost smell all this coming. All hard goods have a break point in pricing; once the price gets so high, the demand for the product simply lays down and dies a slow and painful death.
Please keep in mind though, that a decline in the resale value of your home does not change the mortgage payment.If you could afford your mortgage payment when you bought the place for X dollars, you can still afford the payment even if the resale value has declined to X minus Y dollars.
Of course this does affect people who have suffered a substantial decline in income, because, unable to afford the mortgage payment, they are forced into foreclosure instead of having the option to sell.
I don't have an ARM and the tax assessed value of my house has dropped about 5 to 10 percent. So, i am trying to figure out why my monthly mortgage payment has just went up $40
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"Shoot him again....his soul is still dancing"
I don't have an ARM and the tax assessed value of my house has dropped about 5 to 10 percent. So, i am trying to figure out why my monthly mortgage payment has just went up $40
Don't know about your situation, but we have a Constitutional provision here that bars them from increasing the real estate tax on your residence based on assessed valuation. They can only do a cost of living increase. So this year, in spite of the fact that assessed valuations have generally declined across the board, they increased our taxes by the cost of living increase. Government, dontcha love it? [:'(]
By the way, they can increase the tax based on assessed valuation when a home changes hands.So some buyers encounter a WHOPPING increase in the tax when they buy a home, especially if it has not changed hands for 20 years or so. Exciting eh?
I don't have an ARM and the tax assessed value of my house has dropped about 5 to 10 percent. So, i am trying to figure out why my monthly mortgage payment has just went up $40
Having seen your house I'm inclined to wonder exactly how onecantake 5 to 10 percent from zero. Hey, it's east Dayton, if it weren't for Jackass Flats it would be totally worthless...
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Kevin Haendiges
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Home Values Continue to Slide
