Today, MSNBC reports that housing prices and sales have continued their decline.

Sales of existing homes fell for the sixth straight month while median home prices declined by by nearly 5% from a year ago.  With the decline of the largest asset owned by working class Americans, what does this mean for our economy?

Cleveland Ohio, known as the home foreclosure epicenter of the United States, has taken legal action against twenty one banks.  A handful of local citizens are attempting to jump on the bandwagon too and seek financial restitution for the loss of their homes.  It’s good to see cities and previous homeowners demand answers and compensation for being duped.

The foreclosure flood that hit Cleveland has resulted in nearly 1,000 properties being sold for an average price of $2,321 (source).  Now if that does not drag down the value of surrounding houses and neighborhoods, I don’t know what will.

And if that was not bad enough, some of the remaining foreclosed homes are being sold “as is” to citizens that otherwise could not afford to own a home.  We’ve been down this road before with sub-prime loans, and now a new breed of companies have found creative ways to dupe citizens even further.  By the way, these new breed loans typically carry a 10%-12% interest rate which makes owning a home more of a nightmare then the American dream.  Fortunately some on Cleveland City Council have taken notice and are starting to ask questions.

The Cleveland Plain Dealer at times has some interesting comments regarding the housing problem and how to fix it.  But the underlying fact is that good paying jobs are leaving this country and are being replaced by low wage service sector jobs.  As the citizens income falls, so shall the value of our biggest investment - our homes.  Our homes are only worth as much as the market will bear, and I think the long term outlook for home values looks rather grim in my region.

The government can throw money at us in the form of tax rebates and this will make little difference to those facing foreclosure and the rest of us trying to protect our largest investment.  Lax laws, regulations, and greed are the reason why the housing market in the United States is going downhill.  And it does not help that so many good paying jobs left this country which were replaced by low wage positions in other sectors of our economy.  Instead of throwing money at the housing problem, we need swift solutions.

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