Why Your Home Will Lose 13% Of Its Value In 2010

(This is a guest post by Michael White, editor of newobservations.net and a mortgage broker.)

The New Observations quarterly forecast of property values estimates a loss in values this year of 13 per cent – a slight uptick from the 12% loss forecast at the beginning of the year.

The average of four major nationwide indexes measuring prices also continues to suggest we hover right around a middle point of the total loss expected. Our current loss by the average of four indexes from the peak in 2006/2007 is 20 per cent. The total loss forecast by the blend of indexes is 33 per cent.

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The losses for this year projected in the four indexes vary widely and range between 3 per cent and 24 per cent. The indexes predicting large losses this year are biased by quicker and deeper losses which they registered following the peak. The variance between the indexes is demonstrated by a tally of current losses: It is only nine per cent according to the Federal Housing Finance Agency (FHFA), but it is 30 per cent at Case Shiller.

A chart of all four data sets follows.

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mdw 13%

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