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Old 05-06-2009, 12:21 PM
 
786 posts, read 2,269,316 times
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Grim news about housing in the US....
Almost a Quarter of U.S. Homeowners Are Underwater (Update1) - Bloomberg.com

May 6 (Bloomberg) -- A growing number of U.S. homeowners owe more than their properties are worth after prices extended their two-year decline in the first quarter, Zillow.com said.

About 21.8 percent of all owners were underwater as of March 31, the Seattle-based real estate data service said in a report today. At the end of the fourth quarter, 17.6 percent of homeowners owed more than their original mortgage, while 14.3 percent had negative equity three months earlier.

Property values dropped 14 percent from a year earlier in the first quarter, reducing the median value of U.S. single- family homes, condominiums and cooperatives to $182,378, Zillow said. The decline has left about 20.4 million of the U.S.’s 93 million houses, condos and co-ops with loans higher than the properties are worth. The gain in underwater homeowners will lead to more bank repossessions, Zillow said.

Many owners “would be more willing to bear the financial consequences of bankruptcy or foreclosure,” Stan Humphries, Zillow’s vice president of data and analytics, said in an interview. “You are going to continue to see home prices fall for the rest of this year and some portion of next year.”

The recession cut home values by $2.4 trillion last year, First American CoreLogic said in a March 4 report. More than 8.3 million U.S. mortgage holders owed more than their properties were worth and an additional 2.2 million borrowers will be underwater if prices decline another 5 percent, the Santa Ana, California-based seller of mortgage and economic data, said in the report.
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Old 05-06-2009, 12:41 PM
 
Location: New Jersey
1,610 posts, read 2,968,929 times
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oh, so now we are giving credence to what Zillow says ...?

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Old 05-06-2009, 12:49 PM
 
509 posts, read 803,235 times
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Quote:
Originally Posted by JG183 View Post
oh, so now we are giving credence to what Zillow says ...?

given the sources that you typically referenced on this board, you are hardly an authority to question the legitimacy of someone's source of news.
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Old 05-06-2009, 01:09 PM
 
9,124 posts, read 32,102,485 times
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Only 24%? I thought one of the media outlets said 55% a few weeks ago.....
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Old 05-06-2009, 01:11 PM
 
Location: Home
1,483 posts, read 2,691,707 times
Reputation: 621
Quote:
17.6 percent of homeowners owed more than their original mortgage
Um, what is this supposed to mean, exactly?

If you got a mortgage, and your property value dropped to 0, your debt would still be the same (you would not owe more than your original mortgage).

This sounds like they are mixing references..... They owe mor ethan their properties are worth, but not just because of the depreciation of their homes, 17.6% owe more because they borrowed more.

While this is not a good thing, it is misleading to say that 1/4 owe more than their properties are worth. That makes you think that that the value has decreased below the mortgage amount......
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Old 05-06-2009, 01:16 PM
 
Location: Home
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As a side note, the only way to resolve this is to find a way to put these foreclosures on hold. If they can get the banks to hold off on them, they will be supporting their own assets worth.

But ALL the banks have to refrain from forclosures to help stagnate the price drops. If they can get some limited income from the people to sustain their own corporate costs (reduced and lengthened loan terms) they will slow or halt the drop. This will in turn make house sales more valuable (although slower).

The problem we have is too many foreclosures dropping house values for everyone in an area, stagnating any actual sale of the foreclosed properties, a reduction in overall net worth of the seized property and a greater loss overall.

We need to start forcing these institutions to look beyond the next financial quarter if we are going to get out of this w/o losing a lot more....
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Old 05-06-2009, 01:18 PM
 
Location: Houston, Texas
10,425 posts, read 43,523,011 times
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Like Bob said, it is more like 55%. Depends on what news source you listen to. Some places like Southern California, Las Vegas, Pheonix and Miami the figures are more then 75% are under water. A better way to measure is those 4 places lead the nation in foreclosure. Last I read Las Vegas one in every 27 homes are in foreclosure.

Things are real bad out there and much worse then your govt is telling us.
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Old 05-06-2009, 01:21 PM
 
Location: Stewartsville, NJ
7,577 posts, read 19,975,663 times
Reputation: 1246
Quote:
Originally Posted by kalim2008 View Post
Grim news about housing in the US....
Almost a Quarter of U.S. Homeowners Are Underwater (Update1) - Bloomberg.com

May 6 (Bloomberg) -- A growing number of U.S. homeowners owe more than their properties are worth after prices extended their two-year decline in the first quarter, Zillow.com said.

About 21.8 percent of all owners were underwater as of March 31, the Seattle-based real estate data service said in a report today. At the end of the fourth quarter, 17.6 percent of homeowners owed more than their original mortgage, while 14.3 percent had negative equity three months earlier.

Property values dropped 14 percent from a year earlier in the first quarter, reducing the median value of U.S. single- family homes, condominiums and cooperatives to $182,378, Zillow said. The decline has left about 20.4 million of the U.S.’s 93 million houses, condos and co-ops with loans higher than the properties are worth. The gain in underwater homeowners will lead to more bank repossessions, Zillow said.

Many owners “would be more willing to bear the financial consequences of bankruptcy or foreclosure,” Stan Humphries, Zillow’s vice president of data and analytics, said in an interview. “You are going to continue to see home prices fall for the rest of this year and some portion of next year.”

The recession cut home values by $2.4 trillion last year, First American CoreLogic said in a March 4 report. More than 8.3 million U.S. mortgage holders owed more than their properties were worth and an additional 2.2 million borrowers will be underwater if prices decline another 5 percent, the Santa Ana, California-based seller of mortgage and economic data, said in the report.
The same thing happened back in the late 80's early 90's during the last republican presidential rcession ...ok, ok...no republican bashing. I saw homes, brand new construction homes, that sold for 750K drop to below 400K in less than 1 yr from date of purchase -and interest rates at 12 to 18%! People had no choice but to pay their mortgages until rates either dropped and home values increased. It's temporary and my advice, don't sell unless you absolutely have to. Values will go up again... 5, 10, 15 yrs from now perhaps
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Old 05-06-2009, 01:35 PM
 
1,340 posts, read 3,232,621 times
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[quote=Ninjahedge;8681526]As a side note, the only way to resolve this is to find a way to put these foreclosures on hold. If they can get the banks to hold off on them, they will be supporting their own assets worth.
[quote]

Supporting a false BUBBLE price market is NOT the way to resolved this and will just cause the problem to last longer and be more damaging.

Home prices SHOULD and NEED to be in line with incomes at the end of the day. People make $x/yr and a house should on average be 2.5 - 3 * $x/yr. 2006 prices were closer to 5-6x that number and trying to keep it near that insane number is WRONG!

Get things back to normal and move forward.
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Old 05-06-2009, 02:32 PM
 
Location: Home
1,483 posts, read 2,691,707 times
Reputation: 621
Quote:
Supporting a false BUBBLE price market is NOT the way to resolved this and will just cause the problem to last longer and be more damaging.
How will it be more damaging?

It will last longer only inthat we will be put on hold rather than a purging, but I ma not calling for a re-inflation, but kind of a bottom-bar level for all the over debtors to hit the floor on.

Are you saying that nothing should be done and these houses foreclosed and forced to sell at below the actual worth? I am not talking about price paid.

The other thing is that, prevention of foreclosure WILL stabalize prices in a lot of areas, it will not cause them to go up in any way, but it will prevent the free-fall of home values that localized slash-and-burn "recouping losses" has done in some neighborhoods.
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