Fifty percent of Houses to be Underwater by 2011

[Neubarth]

NY Times Advertisement

As for housing prices, Mr. Rosenberg expects further declines of 10 to 15 percent over the next few years. He pointed to the roughly nine million residential housing units available for sale across the country, a very high vacancy rate when judged against a total housing stock of 130 million units.

If his forecast is accurate, the numbers of borrowers who owe more than their homes are worth will rise significantly. Mr. Rosenberg estimates that fully half of the mortgage-holding population in the country could be underwater by 2011.

For now, these borrowers are getting little to no help from lenders — no surprise — or from the government. Indeed, the Obama administration’s loan modification program has more or less allowed banks that own second mortgages on troubled borrowers’ homes to continue to press for full repayment of these obligations.

 

[Neubarth]

If Mr. Rosenberg's projection is correct, the US economy is in for a world of hurt as more and more people default on loans. Deflation is a horrible thing for banks and farmers.

 

[Big Black Dog]

It's times like this that I am thankful that I owe nothing on the houses that I own. It's a good time to have your home paid off if at all possible.

 

[Neubarth]

It's times like this that I am thankful that I owe nothing on the houses that I own. It's a good time to have your home paid off if at all possible.

I am still paying on my house, but the monthly payment is less than a Thousand Dollars, and I can still itemize the Interest and taxes and so on. I will not have to pay taxes in retirement.

 

[RetiredGySgt]

As long as one can afford the payment I see no problem with the house being worth less due to the economy, unless you do not want to stay in it. I bought my house to live in, not sell.

My only problem is that if the market pays less for the property then the County should have to appraise it at the new lower rate.

 

[uscitizen]

The problem stemmed from housing becoming a piggy bank and an investment instead fo a home.

You contracted to pay XXX $ for it and you did. If the value goes down later and you whine....

 

[CrusaderFrank]

I thought this was another Global Warming thread

 

[uscitizen]

Yeah me too from the title

 

[Care4all]

It's times like this that I am thankful that I owe nothing on the houses that I own. It's a good time to have your home paid off if at all possible.

I guess Matt and me should take that approach, be happy we own our home outright with no mortgage....BUT, it still is killing us....we moved to maine in late 2006, bought our house in December of 2006....used our very hard to come by money and bought it....NOW, our house is worth anywhere from 30-40% LESS than the money we used to buy it..........

This is very disheartening and we want to buy another home and move from this one, but taking a 45k hit when we sell it is just a little hard to swallow.... my parents are getting old and we need to get down to Florida, where they are soon enough, and we just are finding it hard to do that....

And if the housing market is really going to continue to drop the price of our home, as this OP says, then we need to rethink our plans I suppose....and just take the major hit now....

 

[uscitizen]

But Care, The houses in FL will be underwater! Take your fins and snorkel.

 

[editec]

It's times like this that I am thankful that I owe nothing on the houses that I own. It's a good time to have your home paid off if at all possible.

True.

But tomorrow it could be a very good time to have enormous fixed interest rate debts that are being eaten up by inflation, too.

That's the thing about economics, ya know?

What was sage advice yesterday is foolish advise as circumstances change the economy.

People who INSIST that such and such is always the smart thing to do remind me of people who INSIST that we should aways wear a raincoat.

Times change and you'd best be prepared to change along with them.

 

[TheSuaveOne]

The housing crisis was a multifaceted failure. Between the government telling banks to give everyone a loan, the banks following through and giving loans to people who never should have gotten one, and the people who signed a mortgage before understanding what they were really doing...there is a lot of blame to pass out. With even more people lossing their jobs, there will be more people having to back out of their mortages.

One thing I would like to see happen is that people would learn that re-financing isn't the best idea for everyone. Back 20 - 30 years ago, the term re-financing didn't exist...it was called taking out a second or third mortage, and it was a bad thing. Somehow, that changed and people started financing their homes for 125%+ of their home values. Taking the equity they got and spending it.

To be honest, I wish our schools would spend more time on how to get our young people a little smarter on personal finances before they get out of high school.

-TSO

 

[JWBooth]

Another year and a half and our place will be paid off.
Locked in a fixed 7% and never borrowed against the equity, like soooooo many did. Sure I paid a little too much back when the variable rates were down in the 3 - 4% range, but I never had to worry about them climbing on the back end. As for dropping property values, its not a problem here, yet. Frankly, since we aren't looking to ever sell, falling values would be a bonus, because property taxes are tied to values.
Cars are paid off.

 

[Care4all]

But Care, The houses in FL will be underwater! Take your fins and snorkel.

Honestly uscit...we would stay in Maine forever if it were up to us....we love it here...

but my parents are going to be needing help, soon enough and we have to plan for this and figure out how to get down there and be in position to help...

I have tried to see if my sister could keep them in the winter, since she lives in florida, and we could take them in the summer and bring them up here....my parents are standing firm and balking on coming up here...the whole thing is a dysfunctional, family mess....and this horrible housing market is not making decisions any easier....

Yes, with the housing in florida, hurt more than us up here, i could probably buy a home fairly cheap down there at this point...

Ideally matt and I would like to keep this home AND have another home or condo in Florida...live winters there and summers here...

 

[uscitizen]

But Care, The houses in FL will be underwater! Take your fins and snorkel.

Honestly uscit...we would stay in Maine forever if it were up to us....we love it here...

but my parents are going to be needing help, soon enough and we have to plan for this and figure out how to get down there and be in position to help...

I have tried to see if my sister could keep them in the winter, since she lives in florida, and we could take them in the summer and bring them up here....my parents are standing firm and balking on coming up here...the whole thing is a dysfunctional, family mess....and this horrible housing market is not making decisions any easier....

Yes, with the housing in florida, hurt more than us up here, i could probably buy a home fairly cheap down there at this point...

Ideally matt and I would like to keep this home AND have another home or condo in Florida...live winters there and summers here...

the FL winters are nice, but the summers suck. I lived in Tampa for 7 years.

 

[xotoxi]

My only problem is that if the market pays less for the property then the County should have to appraise it at the new lower rate.

My property tax has never been linked to the market rate, but rather to the assessed rate...which is always lower.

 

[Truthmatters]

It's times like this that I am thankful that I owe nothing on the houses that I own. It's a good time to have your home paid off if at all possible.

I guess Matt and me should take that approach, be happy we own our home outright with no mortgage....BUT, it still is killing us....we moved to maine in late 2006, bought our house in December of 2006....used our very hard to come by money and bought it....NOW, our house is worth anywhere from 30-40% LESS than the money we used to buy it..........

This is very disheartening and we want to buy another home and move from this one, but taking a 45k hit when we sell it is just a little hard to swallow.... my parents are getting old and we need to get down to Florida, where they are soon enough, and we just are finding it hard to do that....

And if the housing market is really going to continue to drop the price of our home, as this OP says, then we need to rethink our plans I suppose....and just take the major hit now....

Rent it out Care , its really not as bad as people make it out to be.

 

[xotoxi]

It's times like this that I am thankful that I owe nothing on the houses that I own. It's a good time to have your home paid off if at all possible.

I guess Matt and me should take that approach, be happy we own our home outright with no mortgage....BUT, it still is killing us....we moved to maine in late 2006, bought our house in December of 2006....used our very hard to come by money and bought it....NOW, our house is worth anywhere from 30-40% LESS than the money we used to buy it..........

This is very disheartening and we want to buy another home and move from this one, but taking a 45k hit when we sell it is just a little hard to swallow.... my parents are getting old and we need to get down to Florida, where they are soon enough, and we just are finding it hard to do that....

And if the housing market is really going to continue to drop the price of our home, as this OP says, then we need to rethink our plans I suppose....and just take the major hit now....

If you lose $45K, that is less than ideal.

However, how much would you have spent on MONTHLY RENT if you'd been able to rent your property?

We all hope that real estate is an investment, but sometimes it is not.

 

[uscitizen]

To me a house was a home not an investment.

 

[Care4all]

But Care, The houses in FL will be underwater! Take your fins and snorkel.

Honestly uscit...we would stay in Maine forever if it were up to us....we love it here...

but my parents are going to be needing help, soon enough and we have to plan for this and figure out how to get down there and be in position to help...

I have tried to see if my sister could keep them in the winter, since she lives in florida, and we could take them in the summer and bring them up here....my parents are standing firm and balking on coming up here...the whole thing is a dysfunctional, family mess....and this horrible housing market is not making decisions any easier....

Yes, with the housing in florida, hurt more than us up here, i could probably buy a home fairly cheap down there at this point...

Ideally matt and I would like to keep this home AND have another home or condo in Florida...live winters there and summers here...

the FL winters are nice, but the summers suck. I lived in Tampa for 7 years.

I lived there 8 years, the hubby was born and bread there....before that I was in Miami for a near decade.

It is WAYYYYYYYYYYY TOO HOT THERE IN THE SUMMER, i AGREE!

When we moved from St Pete up to Massachusetts in september ...the Gulf water was 87 degrees....we have not seen the ocean water above 60 degrees since we have been up here in new england! OK, well maybe it did get in to the high 60's by end of summer...BUT STILL! Only my TOES have experienced it.