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article imageUS home values keep falling, equal ‘darkest days’ of recession

By Lynn Herrmann     May 12, 2011 in Lifestyle
Washington - Home prices across the country continue a downward skid, with first quarter values this year dropping by three percent in virtually every metro area, the largest quarterly drop since 2008, and experts suggest the trend will continue well into 2012.
Although many government officials, industry experts, and media outlets continue reporting the country’s worst economic crisis since the Great Depression “officially” ended in June 2009, the housing market shows no signs of recovery, and likely will not for some time to come.
“Home value declines are currently equal to those we experienced during the darkest days of the housing recession,” said Stan Humphries, chief economist with Zillow, an industry data provider. “With accelerating declines during the first quarter, it is unreasonable to expect home values to return to stability by the end of 2011,” he added, according to Huffington Post.
Zillow data shows that five years after a peak in home prices, they are still on a downward spiral, with home values nationwide down 29.5 percent since 2006. This year’s first quarter numbers are down 8.2 percent compared to the same period a year ago.
Even more aggravating for homeowners, the downward trend leads to more home loans going underwater, meaning their home equity or value is less than their mortgages. Zillow reports that 28.4 percent of all mortgage-backed single-family homes in the last quarter are now underwater.
As these home figures continue falling, a cruel cycle has been created. Foreclosure properties tend to depress values of properties around them, placing those homes at risk to the same fate.
RealtyTrac earlier reported that In 2010, almost 2.9 million homes received foreclosure filings, up slightly from 2009 figures that show more than 2.8 million homes received one. Projections show this year’s numbers could set a new record for foreclosure filings.
These staggering foreclosure numbers led to another blight in the housing market, as numerous lawsuits have been filed by homeowners and property investors alleging banks faked or misplaced vital mortgage documents. It has been revealed that companies processing foreclosure notices signed thousands of documents each day, without even reading them. This possible law violation led some of the nation’s largest banks to place a temporary halt on their foreclosure activities last autumn.
The matter is still in the courts, with all 50 state attorneys general scrambling with the Obama administration to reach a settlement involving the nation’s five largest mortgage companies. At stake are upwards of $30 billion in fines.
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