Where has all the equity gone?

The hardest thing for some of us to get our minds around has been that there exists no Law of Conservation of Equity: if it’s reduced at Point A, there is no Point B at which it must therefore increase. There’s still a lot of it out there — $6.2 trillion, said the Federal Reserve at the end of June — but six years ago there was over $13 trillion. That’s one hell of a vanishing act.

Still, not everybody is underwater yet:

Roughly one of every three homes is mortgage-free, according to federal and industry estimates.

Among owners who have mortgages, according to CoreLogic, 48.5 percent of them have at least 25 percent equity stakes in their properties. Roughly a quarter of owners with mortgages — 24.6 percent — have more than 50 percent equity.

At the other end of the spectrum, 22.5 percent of owners are in negative equity positions, burdened with houses worth less than their mortgage balances.

According to the county assessor, the value of the palatial estate at Surlywood dropped by a percentage point this year, but the amount due on the mortgage went down more than that, so technically my equity position has improved by a smidgen: about 27 percent, putting me pretty close to the 50th percentile. Property-tax rates won’t be released until later this month, but I anticipate about a 1-percent increase — which would leave my tax bill for this year at pretty much where it was last year. Then again, my mad prediction skillz have been fairly questionable of late.


  1. fillyjonk »

    2 October 2011 · 8:59 pm

    I guess, “We’re not really as screwed as people might think” makes for poor news headlines. (I will observe with some gratitude that I’m part of that 1/3.)

  2. CGHill »

    2 October 2011 · 9:12 pm

    Some of the places most deeply screwed happen to be the places most highly populated with people who write on topics like this.

  3. nightfly »

    3 October 2011 · 11:29 am

    They said that too many people had too much money, and they would do their damndest to remedy it. Too bad nobody took them at their word three years ago.

  4. Charles Pergiel »

    4 October 2011 · 12:20 am

    Problem with all those numbers is that they are just guesses. You never know how much a house is worth until you actually sell it. Everything before that is just somebody’s guess. What if everybody decided that they would rather live in their car? How much would all those houses be worth then? I am comfortable in my house, but geez Louise, it sure is a big pain in rear having to take care of it.

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