Tuesday, 11 August 2009 20:00

The top five cities with the highest underwater rates all had underwater percentages above 80 percen

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From the Real Deal:

When a report emerged that nearly half of U.S. homeowners would be underwater by 2011, market analysts were, naturally, concerned. The report, released by Deutsche Bank's Karen Weaver, has drawn widespread attention, largely because few other firms have pursued the same data. "I think in fact not a lot of folks have tried to do this analysis," Weaver said to CNBC's Erin Burnett. By taking housing price data and seeing how that would affect negative equity, Weaver said, "it ends up with a pretty shocking statistic." In the first quarter the top five cities with the highest underwater rates all had underwater percentages above 80 percent. Click here to watch the video. 

If this is anywhere near accurate, it will drag on the economy for a LONG time. It also maintains the spectre of a fall BACK into recession with just the slightest blip of a problem. Remember, the home is the average American's largest lifetime investment.

The mounting and prospective losses that I have detailed in The Re-Release of the Open Source Mortgage Default Model and Green Shoots are Being Fertilized by Brown Turds in the Mortgage Markets outline (just in residential real estate lending, notwithstanding all other classes of lending) just how much more restrictive credit can get.

 

Read 2566 times Last modified on Wednesday, 12 August 2009 03:24
Reggie Middleton

Resident Contrarian Badass at BoomBustBlog (you can call me Editor-in-Chief)...

Disruptor-in-Chief at Veritaseum.com, where we're ushering the P2P Economy.

 

www.boombustblog.com
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