Hard times may get even harder. This could easily reduce spending for years as a large group of the population is worried about their future.
The Center for Economic and Policy Research in Washington, which released the report last month, estimated that 30 percent of homeowners aged 45 to 54 were in this predicament, known as being “under water.” (About 15 percent of older baby boomers, 55 to 64, fell into that category as well.)
So, if these people were forced to sell their homes now, they would have to bring cash to the closing....
Another factor that has led to a decline in personal wealth is what the report calls “the near zero level of savings nationally” from 2004 to 2009.
“As a result of the bubble-inflated values of their homes, tens of millions of families opted not to save during what would typically be their peak saving years,” the report said.
Mr. Baker said he suspected that fewer baby boomer homeowners were under water in the New York metropolitan region than in other parts of the country, particularly areas where prices have fallen sharply, like Florida, Arizona and Rust Belt states like Michigan and Ohio. But he said that because of the financial industry’s persistent woes, owners in the New York area could see more significant declines in home prices this year.
Indeed, many areas in the region are already suffering. According to a report this month by Integrated Asset Services, a Denver-based real estate consulting firm, prices in Fairfield County, Conn., have dropped 42 percent since their peak in 2006, while prices in Passaic County, N.J., have dropped 26 percent.
Saturday, March 14, 2009
What happens to the group of homeowners were planning to use their home to fund their retirements. Forget 401ks, IRAs or CDs. Home investment and equity was seen as a sure thing to fund ones golden years. Now many of these potential equity retirees are finding themselves underwater. The golden years are looking a lot less golden for many people, especially a large group of boomers. In an article from the New York Times titled Baby Boomers Underwater illustrates how bad the financial future looks for some. Lets take a look -