Property in US cities to fall US$1.46 trillion this year

MIAMI: Property values in U.S. cities are expected to tumble by US$1.46 trillion in 2008 due to the housing downturn and subprime mortgage crisis that has pushed the U.S. economy to the brink of recession.

Cities, where some 85% of the 300 million Americans live, face weak economic growth and tepid job markets from the housing crisis and rising fuel and food prices, according to the study by private analysts Global Insight for the U.S. Conference of Mayors meeting in Miami last Friday.

Just eight months ago, researchers predicted property values would shrink by US$1.2 trillion this year, the study said.

"Metro areas are expected to suffer a US$1.46 trillion decline in property values in 2008," the study said. "The increased loss is a result of even greater deterioration in home markets and prices than anticipated."

The decline is the equivalent of US$21,277 per home, the study said.

By Reuters