Posted on 05/17/2010 10:53:47 AM PDT by STARWISE
New RealtyTrac numbers show that in April there were well over 300,000 foreclosures and the figure in on track to be higher in 2010 than in 2009. Several research firms say that underwater mortgages have moved above 11 million.
The National Association of Realtors found that “in the first quarter, 91 out of 152 metropolitan statistical areas showed higher median existing single-family home prices in comparison with the first quarter of 2009.” But some cities posted double-digit drops for the period.
24/7 Wall St. reviewed the NAR data for the first quarter along with Bureau of Labor Statistics unemployment levels by city. The two databases should match one another very well. Each has municipalities defined by metropolitan statistics areas (SMA) as set by the US Office of Management and Budget in 2004.
City unemployment rates are compared to a 9.9% national rate for purposes of this article. Government numbers for joblessness do not include part-time workers looking for full-time jobs or people who have become “unattached” from the work force.
These additions would bring the national unemployment rate to 17.1%. That means that if a city has unemployment of 14%, joblessness could be closer to 21%
Home prices were based on NAR indexes for the first quarter of 2010 compared with the full-year 2007, near the top of the housing market.
There are some areas where housing prices have dropped but unemployment has improved, so home values may recover. Honolulu is an example of this. But, most cities with sharp drops in home values are also the hardest hit by the recession’s impact on employment.
These areas may take years to get back to “normal” unemployment rates of 5%. In the meantime, home prices will continue to stagnate, or worse, continue to fall because of a lack of buyers.
These are the thirteen cities where, based on home values in 2007 and current unemployment, housing will never return to the levels of three years ago:
HERE.
~~~
On the other hand, 12 Bubblicious Global Cities Where Luxury Real Estate Is Booming
Never is a long time. Who thinks of this B.S.? So 75 years from now the prices will still be flat?
My thoughts exactly. Apparently at the WSJ “never” is the same as “a fiscal year”.
I’m not sure what to think about this “underwater” concept of mortgages. Number one, you don’t buy a home with the idea it’s always going to increase in value. It will go up and down in value throughout the life of the mortgage and afterwards. So if you bought your dream home and it has lost market value, it’s still your dream home. It means absolutely nothing unless you are going to sell. The only time “underwater” really means anything is if you want to sell or take a loan on the property. If you are living in the home and making the payments it does not matter one bit.
I really think this “underwater” statistic was used to “make up” a crisis so the government could take over the mortgage and banking industries with Tarp. I think the reality is there is no crisis in the housing market. It’s a down market in some areas and this was very predictable for those areas involved.
That's the reality. However, the real estate industry has been pushing homes for the last two decades as an investment. Marketing - once again it has destroyed common sense.
Unfortunately, the -0 managed (trashed)
economy, the anxiety of private sector
small business to plan any expansion or
staff up with all the unknowns, the
remaining high unemployment (likely
indicative of more foreclosures), will
continue to have a substantial impact on
real estate values.
Teheran was not on the list...
.
That pic of Boise look nice!
” Fort Myers, FL. Housing prices are down 65% and unemployment is 14.2%”
Daaaamn! A 65% price reduction. That’s brutal.
Time to buy if you’ve got the money.
Sure does.
Oil blobs the size of canned hams washing up on the beaches won’t be helping FLA real estate any. Let’s hope the BP fixes work.
same thing was said of houston in the early 80’s.
Good point.
No, “underwater” is far from made up.
If someone bought a home in Sacramento for $500,000 with 10% down payment of $50,000, you have a mortgage of $450,000.
Today, that home is worth $260,000. The buyer lost all his down payment and the house is worth $190,000 less than the buyer owes. The contract says, don’t pay and we take your home. So he doesn’t pay and he loses his home.
5 years from now that home will be back to $275,00 to $300,000, his credit will be restored and putting 10% down he could buy it back have a loan of $270,000.
If he kept paying the original $450,000 loan, he would owe well north of %400,000.
You do the math. Walk away, cut your payment in half and owe $270,000 or stay and owe north of $400,000.
No, it is definitely not a made up phony thing. You sound like someone who bought many years before the bubble started and have no appreciation for owing twice what an object is worth. It makes no financial sense to keep paying on it.
Where the banks blew it, was allowing for no down payment loans so owners had no skin in the game. If everyone had to put down 20%, a lot less people would be underwater. A lot less people.
And the crisis in housing is very very very real. You need to study up about it to appreciate how very real this crisis is. You will be hearing more about it now that Fanny and Freddie own ALL of the mortgages and are bleeding bad loans profusely. A lot of your tax money will be going to keep Fanny and Freddie solvent.
Let me help.
Try loosing your job, having to take a job 400 miles away because it was the only one you could find in 6 months of looking, even if you have to take a 15% pay cut, not being able to sell your house because its value has dropped about 20%, so you either live in a camper while your family (with four kids) stays in the house with no hope of being reunited with your family within the next 5 years due to the crappy home market.
That's not a made up crisis. It's all too real.
Glad I could help.
Try loosing your job, having to take a job 400 miles away because it was the only one you could find in 6 months of looking, even if you have to take a 15% pay cut, not being able to sell your house because its value has dropped about 20%, so you either live in a camper while your family (with four kids) stays in the house with no hope of being reunited with your family within the next 5 years due to the crappy home market, or walk away form your house and destroy your credit.
I know people who are having to make choices they never would have made five years ago - these are hard times for so many... You’re in my prayers Jotmo
We've been living month to month with no idea how we'd make it through the next one.
But by God's grace, we've managed to make it through for almost a year. We've had to make some hard sacrifices, mostly me not being home, but we're keeping our heads above water...barely.
Once again, thanks for your thoughts and prayers.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.