84% of the us ‘in decline’?

A new report has illustrated the true extent of the US housing downturn…

According to a report by economic and financial analysis firm Global Insight, Inc, single-family home prices dropped by 6.7% in the first-quarter of 2008, the third straight quarterly decline in housing prices. The report also revealed that:

 - Nationwide, 262 housing markets out of 330 in the study — the overwhelming majority of the nation’s housing markets — experienced declines.

- This accounted for 84 percent of all housing units and 89 percent of real estate value.

- California, Florida and Michigan experienced the steepest losses, and contained 45 of the 50 worst performing metropolitan areas for this period.

- Only eight housing markets — down from a peak of 53 in 2006 — were determined to be overvalued by Global Insight’s analysis, representing only 1 percent of the U.S.

A long time to recover?

Jeannine Cataldi, senior economist and manager of Global Insight’s regional real estate service, observed: California and Florida have been among the most overvalued states for the past several years, and Michigan is reeling from the impact of a slumping economy. Other housing markets in the bottom 50 during the first quarter included Las Vegas and Reno, Nevada and Bend, Oregon.

“The housing market will take some time to recover as consumers are constrained not only by tighter credit standards, but rising costs in other areas of the economy. There is also excess supply that needs to be absorbed, plus the rate of foreclosures entering the market needs to slow before housing can begin to pull out of its current downward trend.”