Free Falling.. Housing Prices Are...Free Falling

Well another week, another horrifying story about the housing market.  An AP Report on the housing market stated that the latest Standard & Poor's index showed housing prices at their lowest since 2006.  I am not surprised one bit by this news.  In my law practice I see hundreds of title reports each month for houses destined for eventual foreclosure.  Most of these are in metro areas like Cincinnati, Cleveland, Toledo, Akron and Columbus.   It makes sense because how can you sell an existing house for anything close to value when the banks have hundreds of foreclosed homes on the market at discounts of 20%, 30% or even 50% in some cases?   Previously released numbers boasting that home sales were steadying or even rising in the area look only at volumes of sales, not price.  The truth is, that many of these sales are being done at huge discounts which drives these indexes down.

 
This problem is only going to be compounded by the fact that thousands of foreclosures have been delayed by the largest lenders due to the "robo-signing" scandal and lawsuits by Attorney's General seeking to halt foreclosures.  Once those matters are settled - oh maybe this year sometime - the foreclosure floodgates will open and even more homes will be added to the glut of REO properties.  

In the meantime, maybe you're "lucky" enough to pay your mortgage down so that you have equity in your home.  Otherwise, join the growing mob and see if you can get yourself a HAMP Mortgage modification and prepare to stay where you are for the next 5 - 10 years until your house is no longer underwater!