From sddt.com:
In the San Diego-Carlsbad-San Marcos residential market, the level of underwater mortgages leveled off in the second quarter, according to a real estate services company.
CoreLogic reported 165,650 of all residential properties with a mortgage (28.1 percent) were in negative equity, in the San Diego County market. In the first quarter, the level was 28.2 percent, or 165,582 properties, according to the new analysis.
Also in the San Diego market, an additional 4.8 percent — or 28,352 residential properties — were in near negative equity for second quarter 2012 compared to 4.9 percent, or 28,889, in first quarter 2012.
Negative equity, often referred to as “underwater” or “upside down,” means that borrowers owe more on their mortgages than their homes are worth. Negative equity can occur because of a decline in value, an increase in mortgage debt or a combination.
JtR: Including homeowners without a mortgage, those underwater are fewer than 20%.
There have been 9,410 San Diego short-sales and REO listings closed this year, or 6% of 165,650.
http://www.latimes.com/business/money/la-fi-mo-fannie-freddie-20120912,0,5058953.story
On the MLS there isn’t a search parameter for flippers, so let’s estimate.
If we are resolving about 1,000 underwaters per month via short sales and REOs, let’s guess that another 1,000 are flippers and loan mods.
Let’s also say that only half of the underwaters are going to need resolution, because it has been shocking how few have taken action so far. If they have made this long, many will hold out.
165,650/2 = 82,825 to be resolved.
82,825/2,000 per month = 41 more months.
We are on a recession pace too. Barring any unforeseen events like depressions, earthquakes, nuclear-plant meltdowns, droughts, or politicians gone wild and we should get through this in 3-4 years.
Its different in s cal. I wonder what percent of the properties are new construction every year? Do you think like maybe 1% of new homes are added to the total home supply every year? Seems like it is getting harder to build every year. At some point people will have to start buying a home together as CA cannot keep up with the demand of people wanting a home.
If they are not underwater; then why aren’t they selling?