Housing Market Crisis Celebrates Five Year Anniversary

by Simon Lindsay on Foreclosure Crisis

You know the story by now: Housing prices started to rise in the 1980’s and, with the exception of a few down periods, continued to rise faster and faster through the 1990’s and early part of this century until June, 2006 – the date most experts agree the housing market crisis began in earnest.

Since then, median home values have plummeted in some places up to 40%, and there seems to be no bottom in sight for the slide that has sent millions into foreclosure and short sales and countless others facing that prospect.

The recovery could take a very long time for some hard-hit areas. In the Tampa-St. Petersburg-Clearwater, Florida metro area, for example, prices have fallen by 41% overall since June, 2006, and it could be 2025 before the median home values that were around in the area in 2006 return again.

Adding fuel to the fire is the fact that certain agencies – such as Moody’s – expect considerable losses to continue before a bottom is reached. In other words, we’re not there yet – and it is unlikely that we will see those values again for some time, if ever, due to the bubble nature of the home.

Due to this, it is more important now than ever to understand the importance of getting into the market at the right time. For those who own a home, it may seem daunting, but for those looking to invest or buy, there are plenty of reasons to consider moving in. Even if home values decline further – in some areas, they won’t – potential homebuyers have historically low interest rates plus a plethora of foreclosures, short sales, REOs, and other distressed properties to purchase at terrific discounts.

In other words, the housing crisis may not be over yet, but as long as it continues, there will still be plenty of opportunities to take advantage of this historic event.