Comments on: Misery loves company: negative equity edition http://curiouscapitalist.blogs.time.com/2008/10/31/misery-loves-company-negative-equity-edition/ Commentary on the economy, the markets, and business Sat, 05 Dec 2009 05:18:44 +0000 http://wordpress.com/ hourly 1 By: Writing Frontier http://curiouscapitalist.blogs.time.com/2008/10/31/misery-loves-company-negative-equity-edition/comment-page-1/#comment-5278 Writing Frontier Sun, 02 Nov 2008 02:03:03 +0000 http://timecuriouscapitalist.wordpress.com/?p=1352#comment-5278 Great. Now that we know that one half of Nevadan's are underwater, here's a piece that describes what's going to happen to the other half. Enjoy. See http://writingfrontier.com/2008/10/31/home-sweet-home/ Great. Now that we know that one half of Nevadan's are underwater, here's a piece that describes what's going to happen to the other half. Enjoy. See

http://writingfrontier.com/2008/10/31/home-sweet-home/

]]> By: Donna Thompson http://curiouscapitalist.blogs.time.com/2008/10/31/misery-loves-company-negative-equity-edition/comment-page-1/#comment-5272 Donna Thompson Sat, 01 Nov 2008 17:37:31 +0000 http://timecuriouscapitalist.wordpress.com/?p=1352#comment-5272 I think that there was a lot of building in the sun belt areas for the expected demand from retiring baby boomers. There was a lot of speculation by people flipping condos and driving up the price. Some of the places were purchased by retirees and some were still held by speculators who could not sell them as prices fell and the foreclosure rate increased. I think that there was a lot of building in the sun belt areas for the expected demand from retiring baby boomers. There was a lot of speculation by people flipping condos and driving up the price. Some of the places were purchased by retirees and some were still held by speculators who could not sell them as prices fell and the foreclosure rate increased.

]]> By: paul lukasiak http://curiouscapitalist.blogs.time.com/2008/10/31/misery-loves-company-negative-equity-edition/comment-page-1/#comment-5257 paul lukasiak Sat, 01 Nov 2008 08:50:01 +0000 http://timecuriouscapitalist.wordpress.com/?p=1352#comment-5257 I noticed a lot of states that people retire to on the list -- are there a lot of older people who bought homes in places like Florida and Nevada among those who are "underwater"? I noticed a lot of states that people retire to on the list -- are there a lot of older people who bought homes in places like Florida and Nevada among those who are "underwater"?

]]> By: donthelibertariandemocrat http://curiouscapitalist.blogs.time.com/2008/10/31/misery-loves-company-negative-equity-edition/comment-page-1/#comment-5247 donthelibertariandemocrat Sat, 01 Nov 2008 04:34:59 +0000 http://timecuriouscapitalist.wordpress.com/?p=1352#comment-5247 "Basically what that means is if you want to sell your house, you've got to write a check to the bank on the day you close." Not if you had a credit default swap. "Basically what that means is if you want to sell your house, you've got to write a check to the bank on the day you close."

Not if you had a credit default swap.

]]> By: Barbara Kiviat http://curiouscapitalist.blogs.time.com/2008/10/31/misery-loves-company-negative-equity-edition/comment-page-1/#comment-5236 Barbara Kiviat Fri, 31 Oct 2008 22:36:44 +0000 http://timecuriouscapitalist.wordpress.com/?p=1352#comment-5236 Well, folks, I managed to do some reporting (okay, I managed to do some emailing), and here's what Mark Fleming, First American CoreLogic's chief economist, had to say: "New Hampshire we currently estimate to have an annualized price decline rate of just over 8%, 12th fastest state in the nation... Declining prices equals rising negative equity." Why would house prices in New Hampshire be dropping so drastically? I think Curmudgeon hit the nail on the head. If you consider (at least part of) the New Hampshire real estate market to be an extension of the once-frothy Boston-area, then it all comes together. The Warren Group, a Boston-based real estate data tracker, reported in September that the median home price in Massachusetts dropped 15.6% from a year earlier. Well, folks, I managed to do some reporting (okay, I managed to do some emailing), and here's what Mark Fleming, First American CoreLogic's chief economist, had to say: "New Hampshire we currently estimate to have an annualized price decline rate of just over 8%, 12th fastest state in the nation... Declining prices equals rising negative equity."

Why would house prices in New Hampshire be dropping so drastically? I think Curmudgeon hit the nail on the head. If you consider (at least part of) the New Hampshire real estate market to be an extension of the once-frothy Boston-area, then it all comes together. The Warren Group, a Boston-based real estate data tracker, reported in September that the median home price in Massachusetts dropped 15.6% from a year earlier.

]]> By: Sam Spaiser http://curiouscapitalist.blogs.time.com/2008/10/31/misery-loves-company-negative-equity-edition/comment-page-1/#comment-5232 Sam Spaiser Fri, 31 Oct 2008 21:05:38 +0000 http://timecuriouscapitalist.wordpress.com/?p=1352#comment-5232 Hi Barbara, I was reading a CNN Money article http://money.cnn.com/2008/10/30/real_estate/underwater_borrowers/index.htm?cnn=yes and it suggested that maybe New Hampshire could have experienced the underwater loans because of large immigration influx. Its numbers seemed to be in the ball park as other states with this problem, but far away geographically so I'm not sure. "The third group of states where many borrowers owe more on their homes than they are worth are in trouble mainly because, according to Fleming, they've experienced a large influx of immigration. Newcomers in states like Texas (16.5%), Georgia (23.2%), Arkansas (16.3%), and Tennessee (15%) bought homes recently and simply didn't have much time to build up equity before prices started to fall he says." What do you think? Sam Spaiser Hi Barbara,

I was reading a CNN Money article

http://money.cnn.com/2008/10/30/real_estate/underwater_borrowers/index.htm?cnn=yes

and it suggested that maybe New Hampshire could have experienced the underwater loans because of large immigration influx. Its numbers seemed to be in the ball park as other states with this problem, but far away geographically so I'm not sure.

"The third group of states where many borrowers owe more on their homes than they are worth are in trouble mainly because, according to Fleming, they've experienced a large influx of immigration.

Newcomers in states like Texas (16.5%), Georgia (23.2%), Arkansas (16.3%), and Tennessee (15%) bought homes recently and simply didn't have much time to build up equity before prices started to fall he says."

What do you think?

Sam Spaiser

]]> By: bryanfromhouston http://curiouscapitalist.blogs.time.com/2008/10/31/misery-loves-company-negative-equity-edition/comment-page-1/#comment-5229 bryanfromhouston Fri, 31 Oct 2008 20:21:00 +0000 http://timecuriouscapitalist.wordpress.com/?p=1352#comment-5229 Curm, I think you are indeed correct. As the McMansions become exposed for the overreaching palacial luxuries that they are, we are seeing the fall of that subset of the housing asset class. That is precisely why I was able to buy a new Tundra for what I had paid a few years ago for a used Tacoma truck. Supply and consumption can be fooled some of the time, but it can't be fooled all of the time. Curm,
I think you are indeed correct. As the McMansions become exposed for the overreaching palacial luxuries that they are, we are seeing the fall of that subset of the housing asset class. That is precisely why I was able to buy a new Tundra for what I had paid a few years ago for a used Tacoma truck. Supply and consumption can be fooled some of the time, but it can't be fooled all of the time.

]]> By: Curmudgeon http://curiouscapitalist.blogs.time.com/2008/10/31/misery-loves-company-negative-equity-edition/comment-page-1/#comment-5226 Curmudgeon Fri, 31 Oct 2008 20:02:00 +0000 http://timecuriouscapitalist.wordpress.com/?p=1352#comment-5226 @Barbara: As a longtime New Hampshire resident, I'll admit I'm a bit stumped too. I'll offer a guess that New Hampshire is another one of the states with a heavy influx of people over the last several years, although I don't have population figures handy. But the southern tier of the state has always been a bedroom community for the Boston area, and as home prices in eastern Massachusetts have grown, perhaps this trend accelerated over the last few years. And I confess that the McMansion species seems to have become popular in new construction in the area, which has perhaps led to new residents overreaching. @Barbara: As a longtime New Hampshire resident, I'll admit I'm a bit stumped too. I'll offer a guess that New Hampshire is another one of the states with a heavy influx of people over the last several years, although I don't have population figures handy. But the southern tier of the state has always been a bedroom community for the Boston area, and as home prices in eastern Massachusetts have grown, perhaps this trend accelerated over the last few years. And I confess that the McMansion species seems to have become popular in new construction in the area, which has perhaps led to new residents overreaching.

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