A report released on December 15th shows that $2 trillion in the value of American homes evaporated in 2008. A report released by the National Association of Home Builders in June of this year showed $500 billion lost in home values at that time. But now, 11.7 million home owners are carrying mortgages considered “underwater” because they owe more on their homes than they are worth. The combination of negative equity and a continuing surge of foreclosures flooding the market have caused the loss of home values in the U.S. to accelerate by a factor of 3X in the last six months.
Home values have been declining for eight consecutive quarters and with projections of foreclosures and continuing declines in equity “with no end in sight”; there is no projection yet for when the market will begin to turn around. The problem is that the real estate market is already flooded with undervalued and foreclosed homes and there are many more to come in the months ahead. Compounding this problem is the ongoing struggles on Wall Street and increasing numbers of unemployed.
Seniors and their families that are counting on the sale of their home and/or their savings invested for the future are being hit particularly hard by this culmination of negative factors. When money from the sale of a home or income from investments can not be counted on; seniors and their families must educate themselves about financial alternatives to pay for senior housing and care.