2007 - 2010 Survey of Consumer Finances

Following up on my earlier Balance of Power post there was a timely article regarding states that had the biggest drops in net worth.  Guess which state made the list  . . . Florida.

The very interesting underlying report* from the Federal Reserve can be found here.  The data and charts are fascinating.

• The decline in median income was most pronounced among more highly educated families, families headed by persons aged less than 55, and families living in the South and West regions.

Well that would be us, highly educated, less than 55 and in the South.  And, no my income has not recovered to 2008 levels.

• The decreases in family income over the 2007−10 period were substantially smaller than the declines in both median and mean net worth; overall, median net worth fell 38.8 percent, and the mean fell 14.7 percent.

So, that is the good news I guess.  Incomes didn't fall as hard as net worth.  Average net worth is now down to the level found in the early 1990s.  So almost two decades of progress was wiped out for average families.  

• Although declines in the values of financial assets or business were important factors for some families, the decreases in median net worth appear to have been driven most strongly by a broad collapse in house prices.  The decline in median net worth was especially large for families in groups where housing was a larger share of assets, such as families headed by someone 35 to 44 years old (median net worth fell 54.4 percent) and families in the West region (median net worth fell 55.3 percent).

Well, that would be us, for sure, we have lost almost $200,000 in our real estate investments (that doesn't include our primary home, which also lost value).  As mentioned in prior post, we were heavily weighted in real estate before the bubble popped so we have taken a major hit in our net worth due to the real estate collapse.

*I find the title of this survey to be ironic.  We are only consumers in the eye of the Federal Reserve.