Foreclosures Grow in Housing Market's Top Tiers

[Joanne98]

Source: WSJ

New data suggest that foreclosures are rising in more expensive housing markets.

About 30% of foreclosures in June involved homes in the top third of local housing values, up from 16% when the foreclosure crisis began three years ago, according to new data from real-estate Web site Zillow.com. The bottom one-third of housing markets, by home value, now account for 35% of foreclosures, down from 55% in 2006.

The report shows that foreclosures, after declining earlier this year, began to accelerate in the late spring and that more expensive homes have more recently accounted for a growing share of all foreclosures. "The slope of that curve in recent months is much sharper than it was recently," said Stan Humphries, chief economist for Zillow. Rising foreclosures among more-expensive homes could create added pressure for a housing market that has shown signs of stabilizing in recent months as sales of lower-priced homes pick up.

The Zillow research compared homes against the median values for their local market and broke each market into three tiers by value. Zillow then looked at the share of monthly foreclosures in each tier over the past decade.


Read more: http://online.wsj.com/article/SB125530360128479161.html

[Newsjock]

1. They can live in the back of their Hummers

Until those also get repo'd, at least.

[LeftHander]

2. Here comes the GOP to the rescue....save the rich!!!....nt

[No Elephants]

13. Unless they are deliberately walking away, they probably aren't rich anymore.

[dixiegrrrrl]

3. Some people predicted this well over a year ago.

"Prime loans accounted for 58% of foreclosure starts in the second quarter, up from 44% last year, according to the Mortgage Bankers Association"

Denninger and others correctly foresaw that prime loans HAD to be in danger as housing values fell,and that commercial/business loans would also be part of a HUGE more severe 2nd wave of defaults.
Which, they said back then, added up to a serious Depression.

[AllentownJake]

5. Karl sure gets bashed around here by some

I spent a good 10 post arguing with someone about his latest post I copied on here. Their argument was that because the stock market was recovering, we are in a recovery.

[dixiegrrrrl]

6. Great..sell them stock....or a bridge..or something.

[Arctic Dave]

4. This a pretty informative sight someone posted a while back.

http://www.newyorkfed.org/mortgagemaps/

It gives a lot of info about the type of loans in your state and city.

[dixiegrrrrl]

9. Dave...that is a very helpful site.

Many thanks.:hi:

[Arctic Dave]

11. It is helpful and depressing all in one.

:hi:

[JuniperLea]

7. Many are suffering who never took risks...

Their neighborhoods are failing... their home values severely cut... squatters moving in, and values continue to plumet... gangsters and crack dealers squat... but you can't leave because you can't sell your home for enough to cover the principal mortgage.


This has gone waaaaaay beyond stupid people taking out horrifically risky loans... this has hurt a lot of us.

[dixiegrrrrl]

8. Another irony is that while home values have fallen

replacement values have risen. Thus I have to pay more for home insurance ( and it goes up every year)
to replace the house whilst I could buy a similar house, next door, for 40 K less than it was valued at 3 years ago.
And, the houses for sale in our neighborhood, are not selling, even at reduced prices.

[JuniperLea]

10. My principle mortgage amount is double the current value of my home...

Being as so many homes in the area are cut from the same cookie cutter, it's very easy to get a good "comp" on the value of recently sold homes. Two doors down, exact same home (size, condition, age) sold two months ago for half my mortgage principle amount.

How long do you figure it would take for my home to double in value so I can break even? And will it be before the crack squatters burn the block down?

I keep an eye on the local listings, and I rarely see homes sold on the first pricing. "Price Reduced!" and "Bank Owned" and "Short Sale" are on virtually every "For Sale" sign in the neighborhood that's been up for more than 30 days.

I wonder if there is a benefit to the banks/mortgage companies when people walk away from their homes... seems they end up taking a lot less for the homes, but aren't in a big hurry to help owners who want out. Seems it would be better to have someone there paying the lower amount, without a gap in payments while the home is empty. I keep hearing about people being turned down for Obama's mortgage modification program.

[No Elephants]

14. Depending upon the amount of the down payment and the age of the loan, walking away

from the home and its mortgage may make sense for some.

[XemaSab]

12. There are about 6 homes for sale in my neighborhood

(I'm counting as my immediate 'hood an area three blocks by five blocks.)

This is about 3 times more than there were this time last year.