Upside Down Housing

This is a crippling thing for any economy. Billions of dollars of home equity has disappeared in a puff of proverbial smoke. Millions of Americans owe more on their homes than they are worth.

In San Diego just one year ago, homes were selling on average for nearly $500,000. Today the values have dropped on average by over 25%. Home prices have dropped similarly across the country. According to Bloomberg, one in four households, about 25 million families, risk owing more on their homes than the homes are worth. In the last year over one million families have lost their homes to foreclosure. Millions more are at risk.

This is the equivalent of scores of hurricanes and earthquakes ravaging the nation. By any reckoning it is a national disaster.

The photo, by the way, is of a real building in Poland.