A story that has been getting alot of media attention lately is the impact on homeowners of owing more on there homes than the home is worth. Usually referred to as being "underwater", this financial situation is becoming a serious problem throughout the country.
It has led directly to the explosion of short sales and voluntary foreclosures and indirectly to the drop in consumer sentiment and a pull back in the American consumer's appetite for spending.
I was lucky enough to interviewed by Stephanie Dhue of Nightly Business Report yesterday and the segment ran yesterday on PBS nationwide. It is the second segment in this video.
Here are several stories regarding underwater mortgages.
The report from Deutsche Bank thatunderwater mortgages will hit 48%. This was quoted in the NBR report.
An in depth report on the effect of underwater mortgages and foreclosures by CoreLogic.
Report that currently 1 out of every 4 mortgages in America is underwater.
Great job on this story, Tony. The reporter's note at the end stopped me short: It takes an average of 10 years for real estate prices to recover, following a bubble. That's shocking, I would say.
Posted by: Craig Colgan | August 26, 2009 at 02:08 PM
Thanks Craig. Yeah, the time it takes to recover after a bubble is very long. If you think about the current bubble that peaked at the end of 2005, beginning of 2006, we are already 3+ years in and prices are 35-40% down. It will take at least 7 years to get back to 2006 price levels, if not longer. Very sobering.
Posted by: Tony Arko | August 26, 2009 at 02:12 PM