Reports put the value of his Washington DC home down $260,000; from $1.1 million to $840,000. That works out to a loss of 31%.A drop of 31% is similar to the markets I’m familiar with in the high desert and northeast.
Goldman Sachs had estimated mortgage losses to be $300 billion a month or so ago. Some people have been arguing that losses could be as high as $1 trillion. I have been stating for months that the losses will likely be around $3 trillion* (a 30% drop in residential real estate values equates to $6 trillion; half of which is owned by the bank; add commercial losses; add consumer credit; subtract people who choose to keep making payments on upside down homes).
The math is pretty straight forward. But then I’m not pushing an agenda.
* Qualification: 2006 dollars. The trashing of the dollar will reduce the number but not the impact. Deflating the savings of Americans will ease the pain of Wall Street.
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