Wikinvest Wire

Speaking of housing deflation...

Friday, August 24, 2007

This story from Reuters points to the growing realization amongst the common folk that home prices don't go up forever and there is no substitute for good old fashioned, traditional "savings".

More homeowners say house value declines: survey
NEW YORK (Reuters) - Homeowners across America were more likely to report declines in their home values than at any time since 1992, according to the The Reuters/University of Michigan Surveys of Consumers for August released on Friday.

Nearly one-in-four consumers in the August survey reported that the value of their home had declined during the past year, said Richard Curtin, director of the Reuters/University of Michigan Surveys of Consumers in a statement.
...
The data indicated housing wealth will provide less support for consumer spending as tighter lending standards and higher borrowing costs curtail cash-out refinancing during the year ahead. Though the survey indicates a significant slowdown in consumer spending, it will stop short of a recessionary downturn, Curtin said.

Among homeowners in the West, 33 percent reported in the August survey that the value of their home declined. That compared with 23 percent of homeowners in the Northeast, 18 percent in the Midwest reporting declines, and 15 percent in the South.

Some 21 percent of West and Northeast homeowners expected declines during the year ahead, with just 10 percent of Southerners expecting a decline in value.
As seen in many political polls, the tide of public opinion turns slowly, but once the change is set in motion, it's hard to stop - keep an eye on this chart going forward.

In case you are having trouble making out the color coding, from top-to-bottom on the rightmost side of the chart, the order is Miami, Los Angeles, Washington DC, San Diego, Las Vegas, Tampa, Phoenix, New York, San Francisco, Seattle, Portland, Boston, Minneapolis, Chicago, Denver, Atlanta, Charlotte, Dallas, Cleveland, Detroit.

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3 comments:

Anonymous said...

Very good graph. Only problem, I can't correlate the legend to the graph colors. Can it be improved with patterns or something?

Ryan said...

"The data indicated housing wealth will provide less support for consumer spending..."

Good grief. There's no such thing as "housing wealth" to support consumer spending. It's all just debt. People are no longer able to accumulate more debt, and this is somehow a bad thing.

Tim said...

I just added some help for the legend.

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