Zillow, via The Big Picture, says so:
The U.S. housing market lost $3.3 trillion in value last year and almost one in six owners with mortgages owed more than their homes were worth as the economy went into recession, Zillow.com said.
I have previously posted about how illiquid the residential market is; only about 5% of homes trade in a year. In the current environment, distressed sales are a very significant percentage of the sales occurring. This post says 45% of sales in December were distressed, but I suspect the number of people selling because they have to is much higher than this – why would anyone voluntarily sell in this environment?
So, you take an inactively traded market, base your current value on distressed sales, extrapolate back to the entire market, and report a huge value loss. That approach is one way of looking at things, but the only owners who actually lost money are the 5% of owners who actually traded. Further, the amount they lost is limited to their investment, so a good share of the actual loss was picked up by their lenders (in some cases, all of it; remember those 0% down loans?).
Actual homeowner losses are much, much smaller than this number.
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