Zillow.com is out with the firm’s latest report on “upside down” homeowners — those who owe more than their homes are worth. The real estate data company estimates that 21.8% of U.S. homeowners are now underwater on their mortgages, up from 17.6% in the fourth quarter of 2008. Zillow’s data covers 161 metropolitan areas. More data is available here.
Zillow.com: The ranks of the “upside down” grow
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Mike,
I’m beginning to see the big picture. Nobody cares about these statistics on underwaterness because nobody believes this condition will last very long. I’ll bet if you took a poll of all the homeowners who are underwater they would say, it doesn’t matter because I’m not moving anywhere and I don’t buy new houses for an investment. The company I work for just announced our profit picture just got better and they expect it to get even better and we are one of the largest transportation and logistics companies in the world. So, happy days are here again. There seems to be a disconnect with wall street and what’s happening on main street.
Mike:
So few people really know the extent of the lenders/banks efforts to hide their shadow foreclosure inventory. I have a friend who did a private 2nd mortgage for a gentleman and the 1st mortgage lender just served him notice that the 1st mortgage had not been paid for SIXTEEN MONTHS. This was a FNMA 1st mortgage, not a subprime 1st mortgage. They do not know that there were tons of Fannie/Freddie loans done for 580 plus credit score applicants at 95-100% LTV without reserves verified, income verified, and that the FNMA’s desktop originator often allowed debt ratios close to 70% of the gross monthly income.
Boy, do we have problems in housing! People have no idea of what’s coming. I’m glad you do and appreciate your work! By the way, the SRS (ultrashort real estate ETF) has been slaughtered from high of $295 to currently in the low 20’s. Could be a bargain at some point unless the truth is hidden forever – somehow………
James
Mike Larson Reply:
May 7th, 2009 at 4:47 PM
Keep in mind that SRS is designed to trade inversely to commercial, rather than residential real estate. Sometimes the underlying stocks trade in tandem, sometimes not.
If the economy starts to grow then no one cares about those stats. Of course, bailing out (as such) the likes of Chrysler doesn’t grow the economy.
Mike-Today you seemed to soften your view on housing moving into next year. I recently read that there are some potentially very large concerns brewing with FHA loans that are being issued with almost no money down and/or closing costs (sound familar?) to first time buyers (see below). Your comments would be greatly appreciated.
http://www.forexhound.com/article/Stocks/Stocks/WSJ_FHA_Loans_the_Next_Housing_Bust/132106
Mike Larson Reply:
May 8th, 2009 at 2:54 PM
FHA loans will definitely be the next big mortgage credit problem. That’s because FHA has become the “new subprime.” So expect to get your pocket picked as a taxpayer when we have to bail out the FHA down the road. But overall, yes, I have definitely softened my view on housing after being a raging (and right) bear for four years. Mind you, I’m not bullish on residential real estate. Just less negative/more flat. There are positives out there that are helping move the needle from “all bad” toward “neutral.”