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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: ChanceIs who wrote (71361)	2/3/2007 4:10:11 PM
From: jimmg	Read Replies (1) \| Respond to of 306849

Here are the numbers according to the latest z1: Since 2001 to q3 2006: 1. Household real estate assets have gone from $12.5 trillion to $20.5 trillion (page 110). 2. Household sector mortgages have gone from $5.4 trillion to $9.7 trillion (page 100). 3. Therefore real estate equity has gone from $7.2 trillion to $10.8 trillion (56.8% to 52.7%). So yes, equity as a % of market value has declined but that is slightly misleading. Over 5 years, real estate equity has increased 50% ($3.7 trillion) on an $8 trillion increase in real estate value compared to a $4.3 trillion increase in mortgage debt. In other words it would take an approx. 16% decline in real estate values from q3 2006 to wipe out all of the increase in equity built up since 2001. A 50% drop in real estate values would wipe out all equity in real estate.