Tuesday, May 6, 2008

96% of Stockton, CA homeowners who purchased in 2006 are under water

My thoughts: The bottom in housing may not be here yet, and will probably take longer to achieve than most expect. But news like this means we are getting closer....

You bought at the peak of the market. You put next to nothing down. (Maybe you even took out one of those 105% LTV loans to cover closing costs.) Now prices are falling, falling, falling, and you are underwater on your mortgage.

If it’s any comfort, you are not alone. Here’s what Zillow.com, the real estate website, says:

“Of homeowners nationwide who purchased when U.S. home values peaked in 2006, one out of every two (51.6%) now owes more on their mortgage than their home is currently worth.”

Las Vegas may look dry, but from the point of view of homeowners, it’s deep underwater. Zillow says that buyers in 2006 posted a median downpayment of just 2%, and since then, home values have fallen 25 percent year-over-year, so 89.9% of homeowners now owe more than their home is worth.

Stockton, Calif., is worse: 95.8%. No wonder it’s known (unofficially of course) as the Foreclosure Capital of the U.S.A.

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