From my Realtor email newsletter today:
Nearly 20 percent of home owners owe more on their homes than their properties are worth, finds a new study by First American CoreLogic. About 8.31 million properties were underwater at the end of 2008, up 9 percent from 7.63 million at the end of September. Corelogic predicts about 2.16 million properties will be underwater if home prices fall another 5 percent. The problem is the worst in Arizona, California, Florida, Georgia, Michigan, Nevada, and Ohio.
Nationwide, 68 percent of U.S. adults own their own homes, and about two-thirds have mortgages.
Source: Reuters News (03/04/2009)
So what? Being underwater is not the same as not being able to make the payment. You know, we keep hearing politicians and talking heads and consumer advocates using the term “under water”, as if this is something new and to be avoided.
The truth is, most people are under water on just about everything in life, and there has never been the sort of outcry about it that we now hear. Under water on their new car 2 minutes after they drive it off the lot. Under water on just about everything they purchase, including new furniture, clothing, boats, vehicles, computers, TVs, video games, etc. – all loaded up on the credit card.
Where is the bailout plan to cram down those 7 year auto loans so people are not “under water” on the car? Hmm?