[IYAS9YAS]

It only matters if you have to sell.

[ExtremeUnction]

It only matters if you have to sell.

But slowly, over time many of these folks will need to sell. Death, bankruptcy, divorce..all will cause a forced sale. These forced sales will continue to keep prices down..for a long time.

[lmr]

It only matters if you have to sell.

This is true, but many homeowners are discouraged by negative equity because it's basically like paying rent. If the value of the home has gone down considerably and there is no hope of positive equity for an extended period, many homeowners would rather give up and let the bank foreclose than have to pay up to twice as much in payments if they stayed than they would have to in rent if they chose instead to walk away. Compound this with a job loss, having more disposable income at the end of the month is preferable than paying the mortgage. Being able to eat in a warm rented house literally looks better than starving and freezing in a house with an underwater mortgage.