Supply's chain of pain, where underwater is overwhelming

Source: Calculated Risk

The importance of the ties between negative equity rates and magnitudes and trends in house prices is huge. Assumptions that house prices have hit or neared bottom and begun to stabilize are based on beliefs that negative equity will not translate into more than actuarial tables of default and eventual foreclosure. But this is uncharted territory, and the count of strategic defaults has just begun. Pessimistic analysts draw dire conclusions about how people who are underwater will default in droves and increase the glut of excess supply in the market. Less pessimistic ones believe that jobs, income stabilization, and even a slowly improving broader economy will re-commit many borderline home-borrowers to their tenuous hold on the American Dream. Calculated Risk's Bill McBride writes that the " graph shows the break down of negative equity by state. Note: Data not available for Louisiana, Maine, Mississippi, South Dakota, Vermont, West Virginia and Wyoming. 'Nevada had the highest negative equity percentage with 63 percent of all mortgaged properties underwater, followed by Arizona (50 percent), Florida (46 percent), Michigan (36 percent) and California (31 percent). ... Las Vegas led the nation with a 66 percent negative equity share, followed by Stockton (56 percent), Phoenix (55 percent), Modesto (55 percent) and Reno (54 percent).'"

URL to original article: http://www.builderonline.com/builder-pulse/supplys-chain-of-pain-where-underwater-is-overwhelming.aspx?cid=NWBD110608002

For further information on Fresno Real Estate check: http://www.londonproperties.com