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The “Bell Curve Of Doom” Is Ringing For Recent Home Purchasers

A friend forwarded me a copy of a report "The Bell Curve of Doom? - The Case - Shiller Price Index." I thought the following paragraph from this report did a great job of putting price declines in perspective:

According to the Case-Shiller Composite 20 (metro areas) index, the price of an existing home peaked in July 2006. From the July 2006 peak through January 2008, the price of a representative home has fallen 12.5%. To put this in perspective, if someone had purchased an existing home in July 2006 for $1 million with a downpayment of $125 thousand (12.5% of the purchase price), that someone’s equity in the house as of January 2008 would be approximately zero. Unless there was a radical reversal in the direction of home price changes in February, that July 2006 home purchaser was upside down – i.e., had negative equity in his or her home. The Case-Shiller home price index represents a bell curve of doom for recent home purchasers and home lenders….
Original Source: housingdoom.com