Home Prices Continue To Decrease And May Be Worse Than The Great Depression’s Real Estate Downturn

A recent report released by Zillow.com indicated that the average price of a house in the US has decreased by about 25 percent in value over the last five years, likening the current downturn in the US real estate market to the housing market downturn that followed the Great Depression, in which US homes lost a similar percentage in value over a similar period. The report went on to highlight the fact that on average, homes across the United States have decreased in value for 17 consecutive quarters.

Dr. Stan Humphries, the Chief Economist at Zillow.com issued the following statement regarding the current situation with regards to the US housing market: “While not unexpected, the unceasing declines in home values signal that we’re in for a long, bleak winter of continued troubles for the housing market. The length and depth of the current housing recession is rivaling the Great Depression’s real estate downturn, and, with encouraging signs fading, will easily eclipse it in the coming months. The high percentage of homeowners in negative equity continues to be troubling, in that it represents a huge number of people who are not only more vulnerable to foreclosure, but who are essentially trapped in their current homes and are prevented from selling and buying a new home. This has profound implications for future demand and will be a millstone around the neck of the housing market.”