According to my back of the envelope estimate, the total value all the homes in California has fallen by $1 trillion dollars in a little over a year (see the chart above for my calculations). That’s a HUGE number. It means that a LOT of upside down homeowners are going to turn their keys over to the banks, who, among many others, facilitated and profited from this mess. This is going to make the “S&L crisis” look like child’s play. Seriously.
PS: Yes, it’s true that the number of households does not equal the number of homes, but this is just a quick and dirty chart, remember. If someone wants to pull those figures and post them in the comments (with link), I’ll update the chart. Thanks.
California home prices drop nearly 15 percent
Plummeting median cost in December during a 20-year record sales falloff
updated 6:08 p.m. ET Jan. 17, 2008
LOS ANGELES – The median price of a home in California tumbled nearly 15 percent amid a steep drop in sales in December, a real estate research firm said Thursday.
The median home price hit $402,000 last month, down 14.8 percent from $472,000 in the year-ago period, according to DataQuick Information Systems.
The state’s median home price peaked last spring at $484,000.