For those of you interested in burst housing bubble.... The S&P/Case-Shiller U.S. National Home Price Index was explained by a finance expert:
"The indices give you a way to track the change in the typical home value over time. Typically, there is an anchor at 100 at some point. When the index value is 140, it means that at that point in time, the value of a typical house was 140/100 = 1.4 times what it was in the period that the value of the index was 100. If the index falls to 80, that would mean that the value of a typical home is only 80% of what it was when the index value was 100.
"Obviously, you can do the math at any point in time also (meaning that you don't have to reference back to 100). For instance, if the index value today is 105 for a home in your area, and it was 135 two years ago, that would mean that the typical home has fallen by 105/135 - 1 = -22.22% (or in other words, it is worth 105/135 = 77.78% of what it was worth two years ago."
Take an average house in Cleveland, for instance, which had an index of 102.89 in January 2009, which represents the same value as in August 2000. From January 1987 to January 2009, the average house in Cleveland has nearly doubled in value. But the average price has come down 16.7% since the all-time high in July 2006. Obviously, people who have had the same house for 20 years aren't as affected. Until 2008, generally house prices had only increased. The people who bought a home in the last few years are the ones really hurting.
Phoenix (down 48.5% from its high), San Diego (-40.8%), San Francisco (-43.1%), LA (-39.2%), Las Vegas (-46.5%), Tampa (-37.3%), Miami (-43.4%) and Detroit (-39%) have been hit particularly hard, which is probably not news to people who live there.
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