Equity Losses Aren't Felt Evenly

The losses are highly concentrated. "The Fed's [equity decline] numbers for the country as a whole are really being dragged down disproportionately by the big drops in prices in California, Florida and a handful of other states," Brinkmann said. "Most markets haven't been hit anywhere near as hard."

The latest home price index report from the federal government's monitor of property value movements, the Office of Federal Housing Enterprise Oversight, backs up Brinkmann's point. It found that even in the depths of the current down cycle, 56 percent of the 292 metropolitan areas it surveyed showed positive -- though often small -- price gains during the first quarter of this year. OFHEO's data cover millions of houses financed and refinanced by Fannie Mae and Freddie Mac, but exclude jumbo loans above $417,000 and most subprime loans.

Some markets are appreciating strongly, such as Austin (up 7.7 percent in the past 12 months), Grand Junction, Colo. (up 9.1 percent), Charlotte (up 6.2 percent), and Provo, Utah (up 6.8 percent).

But even in areas with steep price declines, the five-year net equity gains are significant. If you bought a house at the peak of the cycle in dozens of high-froth local markets -- anytime between 2004 and 2006 -- "you probably have seen some significant declines" in your equity, said David M. Berson, chief economist for mortgage insurer PMI Group.

"But if you bought a few years earlier, you're still probably well ahead of the game."

Five-year data from OFHEO suggest that is correct. Houses in Naples, Fla., lost 18.7 percent last year, but are still up a net 61 percent over the past five years. In Riverside-San Bernadino, Calif., houses lost 13.8 percent last year, but are still up by a net 71.5 percent since 2003. In metropolitan Washington, houses lost an average 5.1 percent last year, but have gained a net 68 percent over the past five years.

Bottom line: National numbers -- especially on the downside -- get all the attention. But unless you bought at the peak of the boom in a highly volatile area using a toxic mortgage, things probably aren't anywhere near that bleak.

Kenneth R. Harney's e-mail address isKenHarney@earthlink.net.