What can we do to protect our home values in Riverside?
November 24, 2009
Homes for Sale 79 with a median price of $399,000
Foreclosures 51 $300,000 -16.7%
Sept 14, 2009
Homes for Sale 77 with a median price of $399,000
Foreclosures 37 with a median value of $354,750
June 15, 2009
Homes for Sale 63 with a median price of $429,900
Foreclosures 43 with a median value of $307,575
For zip 60546 Trulia lists 202 homes/condos for sale and currently 55 foreclosures - but if you count bank sales and all the other categories it's over 100. I looked at a couple listings for homes I'm familiar with that have been for sale for literally years One was at $799K at one time and is now down to $549., with almost that amount owed. It's common to see price reductions of $50K or more posted. It will be worse next year...
What can we do? Lower taxes, especially on small business. Create real jobs that create wealth, not just public sector/government jobs. insist that something is done about the public pensions, and especially government unions. Do not allow the health care bill, as proposed, be approved and then signed. Stop buying crap from China and other countries, become a manufacturing country not just a service economy. Be smart about government contracts (the waste collection, for example. our costs should have gone down, not up.) Spend money if you have it. Help out our neighbors--if you know they are struggling, drop a gift card for heat or electric or food in their mailboxes. yes, anonymously is fine. do unto others....pray for a recovery. call your local elected officials and tell them that you are sick of the corruption and to stop it. yes, this means you, mr/ms elected official. do not allow nepotism in any government capacity, including the local schools. if you need work done on your house, now is a great time to do it. hire local tradesmen and suppliers.
From CNN -
Would you walk away?
With 1 in 4 homeowners underwater, many pundits predict a flood of people walking away from their homes. 5 readers discuss why they are - and are not - sticking around.
1 of 6
Fewer walking away than you thinkThe Foretich house in Mississippi
• 1 in 4 mortgages underwater
Almost 25% of homeowners, or 10.7 million borrowers, were "underwater" on their mortgages during the third quarter, according to First American CoreLogic. Another 2.3 million are near that drowning point, where you owe more on your loan than your home is worth.A basic cost-benefit analysis predicts that these people will abandon their homes and accept foreclosure. But there is little data measuring whether that logic holds true. In fact, Eric Johnson, a business professor at Columbia University, believes it doesn't. After years of studying behavioral economics - essentially the economics of choice - he argues that people will simply not make such rational decisions.
"There are two effects that suggest [walk aways] won't happen so easily," he says. "The first is the endowment effect. People tend to value their own house above its market price. Owners don't want to sell at a loss. They have what we call a loss aversion."
The second is that people weigh the importance of immediate outcomes more heavily than long-term effects. Walking away involves upfront expenditures of time, money and effort, while the benefits of walking away are back-loaded.
"People are impatient and weight present costs and benefits more, so they will walk away less often than we might think," Johnson says.
In the following pages are some homeowners who have thought hard about the costs and benefits of walking away from their mortgages.
Les Christie, CNNMoney.com staff writer
http://money.cnn.com/galleries/2009/real_estate/0903/gallery.walking_away/index.html
are there any statistics on the homeless? where are all the people going, if they are kicked out of their homes?
Here's an article/chart of increases in the Case-Schiller index for 20 metro areas.
http://blogs.wsj.com/economics/2009/11/24/a-look-at-case-shiller-by-metro-area-november-update/
A sample comment:
"TWstroud wrote:
Read their lips:” no area in the 20-city index posted a year-over-year price gain”. The only thing that has increased is the weighted average. There has been no improvement. It is just more houses in better off areas are now going on the discounted sales block. This is more smoke a mirrors reporting."
The front page WSJ today shows that almost one in four mortgages is under water:
By RUTH SIMON and JAMES R. HAGERTY
The proportion of U.S. homeowners who owe more on their mortgages than the properties are worth has swelled to about 23%, threatening prospects for a sustained housing recovery.
Nearly 10.7 million households had negative equity in their homes in the third quarter, according to First American CoreLogic, a real-estate information company based in Santa Ana, Calif.
Underwater Mortgages
State-by-state details on underwater home loans
More interactive graphics and photos
Developments: So You're Underwater, What's Next?
These so-called underwater mortgages pose a roadblock to a housing recovery because the properties are more likely to fall into bank foreclosure and get dumped into an already saturated market. Economists from J.P. Morgan Chase & Co. said Monday they didn't expect U.S. home prices to hit bottom until early 2011, citing the prospect of oversupply.
Home prices have fallen so far that 5.3 million U.S. households are tied to mortgages that are at least 20% higher than their home's value, the First American report said. More than 520,000 of these borrowers have received a notice of default, according to First American.
Most U.S. homeowners still have some equity, and nearly 24 million owner-occupied homes don't have any mortgage, according to the Census Bureau.
But negative equity "is an outstanding risk hanging over the mortgage market," said Mark Fleming, chief economist of First American Core Logic. "It lowers homeowners' mobility because they can't sell, even if they want to move to get a new job." Borrowers who owe more than 120% of their home's value, he said, were more likely to default.
AM Report: Millions Underwater in Mortgage Crisis
10:06
Even home buyers who thought they were getting a bargain are now finding themselves underwater. The News Hub panel discusses a mortgage crisis that has left millions owing more than their homes are worth.
Journal Community
Discuss: How much of your home's value do you owe on your mortgage?
Mortgage troubles are not limited to the unemployed. About 588,000 borrowers defaulted on mortgages last year even though they could afford to pay -- more than double the number in 2007, according to a study by Experian and consulting firm Oliver Wyman. "The American consumer has had a long-held taboo against walking away from the home, and this crisis seems to be eroding that," the study said.
Just months after showing signs of leveling off, the housing market has thrown off conflicting signals in recent weeks. Jittery home builders and bad weather led to a 10.6% drop in new home starts in October, and applications for home-purchase mortgages have dropped sharply in recent weeks.
These same falling prices have boosted home sales from the depressed levels of last year. The National Association of Realtors reported Monday that sales of previously occupied homes in October jumped 10.1% from September to a seasonally adjusted annual rate of 6.1 million, the highest since February 2007.
The bump in sales was ahead of forecasts, spurred by falling prices, low mortgage rates and a federal tax credits for buyers. Congress recently expanded and extended the tax credits.
The latest First American data aren't comparable to previous estimates because the company revised its methodology. First American now accounts for payments made by homeowners that reduce principal, and it no longer assumes that home-equity lines of credit have been completely drawn down.
The changes reduced the total number of borrowers under water -- although both old and new methodology show increases from the previous quarter. Using the old methodology, the portion of underwater borrowers would have increased to 33.8% in the third quarter.
Reuters
Homeowners in Nevada, Arizona, Florida and California are more likely to be deeply under water, according to the analysis. In Nevada, for example, nearly 30% of borrowers owe 50% or more on their mortgage than their home is worth, said First American.
More than 40% of borrowers who took out a mortgage in 2006 -- when home prices peaked -- are under water. Prices have dropped so much in some parts of the U.S. that some borrowers who took out loans more than five years ago owe more than their home's value.
Journal CommunityDISCUSS
“If you can't afford it, you shouldn't have bought it, you don't deserve it, walk away. And greedy bank that holds it can take the hit. They may not have been the one that sold it to you but there isn't a financial institution that is innocent in this mess. ”
— Tim Caputo
Even recent bargain hunters have been hit: 11% of borrowers who took out mortgages in 2009 already owe more than their home's value.
Andrew Lunsford put 20% down when he bought his home in Las Vegas for $530,000 in 2004. Now, he said, his home was worth less than $300,000.
"I'm to the point where I feel I will never get my head above water," said Mr. Lunsford, a retired state trooper who works for an insurance company. He said his bank won't modify his loan because he can afford his payments, and he's unwilling to walk away, he said: "We're too honest."
Borrowers with negative equity are more likely to default if they live in a state where the bank can't pursue their assets in court, according to a study by the Federal Reserve Bank of Richmond.
But borrowers who are less than 20% under water are likely to maintain their mortgage if their loan is modified and the payments reduced, said Sanjiv Das, head of Citigroup's mortgage unit. "Beyond 120%, the most effective modification is a complete loan restructuring, including a principal reduction."
Mortgage companies have been reluctant to reduce mortgage principal over worries about "moral contagion, with people not paying their mortgage or redefaulting because they believed the bank would reduce their principal," Mr. Das said.
I did the blockquotes for the last part but they don't show up. Help!
I saw these stats today: Foreclosures in 60546: 2005/25, 2006/27, 2007/44, 2008/63. Anybody want to guess the number for 2009. Or over/under 100?
The Tribune printed a special section yesterday on the upcoming scavenger sale, for Cook county homes delinquent on real estate taxes for two or more years. If I searched it correctly, none in Riverside.
Look at trulia.com and zip 60546 - select category foreclosure/repo/short sale, etc.
That was in The Landmark this week as well. There were a couple in Riverside. It was page 24, after the sports and the insert in the middle.
Take a look at the tax years. The tax years were really weird. I thought the county had to sell the properties for back taxes after two years of delinquency, but there are taxes they are trying to recover from '89 and '90. And the amounts were small, like the incorrect amount was being paid, or there was some error on someone's part. Take a look. It seemed odd.
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