Not only are home prices down 42% in the last seven years, but equity in homes is at an all-time low of 38%. I guess people shouldn’t have extracted $3 trillion of equity from their homes and spent it on vacations, BMWs, igadgets, pools, HDTVs, facelifts, boob jobs, Rolexes, and smokes.
The good news is that we are closer to the bottom than the top. The bad news is that home prices are still falling. With a shadow inventory of 9 million homes and an avalanche of foreclosures ready to be unleashed due to the mortgage settlement, prices will fall at least another 10% to 15% in the next three years. Any moron lured into buying a house by Obama in the last three years is already underwater. Don’t believe the blather about housing recovery. It’s a false storyline.
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