An article that ran today in the Union Tribune - Underwater households resufacing? It Depends looks at many of the statements from media across the County regarding homeowners being underwater of their mortgages compared to market value.
On Aug. 5, Deutsche Bank raised eyebrows across the country when it said 48 percent of all Americans holding mortgages — 25 million households — could be underwater by early 2011. The San Diego metro area was projected to hit the 51 percent underwater mark.
Another:
In mid-February, locally based MDA DataQuick estimated that 25 percent of San Diego County households are underwater.
And yet another First American CoreLogic says:
But First American CoreLogic said last week that the problem is improving, not worsening, nationally. The proportion of properties likely to be underwater dropped from 32.5 percent in March to 32.2 percent in June.
Of course all of these estimates are based on theoretical home values rather than actual prices. The majority of the real estate market right now in lower quartile properties which are typically bank owned or short sales. The above $500,000 market has been much slower as Seller’s hold on to their homes, not wishing to sell in today’s climate.
Norm Miller, a real estate professor at the University of San Diego, believes Deutsche Bank has exaggerated forecasts of further price declines. The bank thinks San Diego prices will drop an additional 8.7 percent from the first-quarter median house price reported by the National Association of Realtors, $323,200.
First American estimates of underwater properties are probably correct, but they don’t imply that homeowners will abandon their homes, Miller said.
Many don’t believe the numbers and want to hang on until values rise, he said. Others simply don’t want to move unless they have to. Besides, signs are growing of a stabilizing market in which foreclosures may grow and prices will bottom out in the next nine months.
“Things are probably flat or just slightly declining,” Miller said. “We’re probably near the peak of the underwater (problem).”
The San Diego-area figure was placed at 42.6 percent, 39th-highest among 207 metro areas studied and 12th among the 51 areas in the study with population over 1 million people.
Kind of like predicting the bottom of the real estate market, these predictions are based on lots of moving parts and speculations. As previously stated in many past posts, statistics will point and give us the actual numbers and shifts long after the actual change.
My guess is lower prices are not sinking, but rising slightly. Keep a watch on upper level pricing until sellers & buyers return to these markets. Want more visit market predictions.
