• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

66% Of Las Vegas Mortgages Are Underwater, 27.7% Of Total US Housing Debt Has Negative And Near-Negative Equity

Tyler Durden's picture

Your rating: None

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Tue, 06/07/2011 - 09:37 | 1346555 FOC 1183
FOC 1183's picture


Tue, 06/07/2011 - 09:38 | 1346556 FreeNewEnergy
FreeNewEnergy's picture

Got houses, bitchez?

Tue, 06/07/2011 - 10:11 | 1346643 Josh Randall
Josh Randall's picture

Deflationary death spiral -- unsold inventory will be stripped for copper, wiring, appliances, salvageable fixtures, toilets, etc. and then 'burried at sea' to keep any semblance of a market going through 2015

Tue, 06/07/2011 - 10:25 | 1346689 snowball777
snowball777's picture

Bad bank. Bad bad bank. Sit. Roll-over. Play dead!

Tue, 06/07/2011 - 14:01 | 1347516 RichardP
RichardP's picture


Tue, 06/07/2011 - 15:23 | 1347887 smlbizman
smlbizman's picture

fuck'n maryland, were in the game....were going to win this thing.....i have at least 1 mill. ft of warehouse being built and at lease 2,000 condos and residential units going up within 1/2 mile ...this does not count the 3 mill. vacnt warehouse ft....we will be number 1.....21220 area rt. 43...wampler road..look it up...

Tue, 06/07/2011 - 09:38 | 1346557 apberusdisvet
apberusdisvet's picture

The bottom, which we are no way near, IMO will be when the median home price drops to $125K, or 2.5 times median household income.  BTW, most mini-macmansions will wind up being demolished.  Disclosure:  long bulldozers.

Tue, 06/07/2011 - 09:46 | 1346579 Alcoholic Nativ...
Alcoholic Native American's picture

yea, the only people popping out enough kids to fill those 5 bedroom Mcmansions live in the the ghetto or the  trailor park.  And they can't afford them.


Death to Suburbia!

Tue, 06/07/2011 - 10:52 | 1346771 Pegasus Muse
Pegasus Muse's picture

Some of the slack will be taken up by multigenerational families living under the same roof; boarders renting out rooms; or as in the case of poor southwestern states, extended families moving in together whose homes are easily identified by the 10 cars parked out front, most of which have bigger monthly lease payments than the house payment (Escalades & STS's), parked all caddywhompus up on what used to be a lawn before they moved in, and intermixed with junkers cars and trucks up on cinder blocks.  An ever more common site these days, even in what used to pass for upper middle class neighborhoods.  

Tue, 06/07/2011 - 11:38 | 1346979 MachoMan
MachoMan's picture

Of course, given that all of these people presumably have houses of their own, there will be multiple vacant residences from this scenario...  And, ultimately, the aggregate notes, I suspect, would be smaller (hence more affordable per debtor). 


Tue, 06/07/2011 - 09:49 | 1346598 flattrader
flattrader's picture

It will have to go lower than that.  Young people/couples--the ones who might produce genuine demand--are not making anywhere near median income with newly minted degrees burdened with student loan debt.

Tue, 06/07/2011 - 09:57 | 1346628 johnnynaps
johnnynaps's picture

oh it's a vicious cycle! Glad I robbed Peter (MC, Visa) to pay Paul (University)! I see it as an unfortunate job market that crapped on me.....and I at least was able to crap on someone else! I feel bad for my best friend who used Peter for too many Spring break trips and was locked into paying Paul with his student loans! He's finishing 4 years in Afghanistan to pay Paul back!

Tue, 06/07/2011 - 09:35 | 1346560 Dexter Morgan
Dexter Morgan's picture

I will not buy my next house until everybody thinks I am a loon for buying real estate.  They already think I'm a loon anyway but this will cement the idea.

Tue, 06/07/2011 - 19:16 | 1348888 Trimmed Hedge
Trimmed Hedge's picture

This is the correct motorcycle....

Tue, 06/07/2011 - 09:40 | 1346570 Jimmy Bora
Jimmy Bora's picture



At 23th minute, Marine Le Pen speaks about the end of EURO when she becomes president in 2012.


Maybe interest to report this, Tyler?

Tue, 06/07/2011 - 10:37 | 1346754 s0lspot
s0lspot's picture

She says she believes in april/may 2012 (next french presidentials) the puto €uro will have disappeared so she won't even need to choose whether to quit it or not.


That being said she's a daddy's girl, very very populist ( think "Change we can believe in" ) and her party is full of very ignorant, racist bigots. I doubt she could assemble a sufficiently instructed team of individuals in order to make a government. Then again that goes for the conservatives & socialists. But french national party members are famous for their ignorance & dumbness...Every 1st of May in Paris they celebrate the ousting of the Brits (during the fucking 1400's!!!) by parading their ugly skinheads around a golden Jeanne d'Arc statue 100m away from poshy Place Vendôme (think bankster's buying heaven). They are retarded catholics living in the past for most of them, rural farmers and the petite bourgeoisie ( and many EU/Social democrats/globalization disillusioned communists and union workers, worth noting ) and they generally are perceived as usurping class-struggle ideology in order to gain more votes. But really they're the Nationalist Bourgeois's party.


She'll never win the elections, might get through the 2nd round seeing how fucked up UMPS parties are but then she'll be kicked out, just like her nazi dad in 2002 against Chirac.


That being said i do agree with her on Gold & monetary sovereignty. But she'd ruin France if ever she got elected.


The Euro will fail either by itself or because of a small country gone pitchfork-rogue, not through the big ones who have too much to loose bankster-wise and their populations have it good enough not to stir shit up.

Tue, 06/07/2011 - 09:42 | 1346578 MachoMan
MachoMan's picture

I hope this pig of a market holds up for a few more months so I can get out from under my house...  although, I'll be selling a property with net equity in it...  If I do purchase a property in the next 3-5 years, it will be multifamily and will be used to offset my rent.  If we are going to have any debt hanging over us, better for it to work for us rather than as a consumptive endeavor. 

Tue, 06/07/2011 - 09:47 | 1346592 snowball777
snowball777's picture

Hadn't thought about that configuration before, but it makes sense, especially when the crazy deals and goober-steps foreclosure deals will be rampant in that space.

Best of luck with finding a buyer!

Tue, 06/07/2011 - 10:32 | 1346726 MachoMan
MachoMan's picture

In my area, anything below 4x avg. household income is selling pretty quickly...  and very quickly with de minimis reduction.  We're actually growing and, don't hold me to it, but I think creating jobs...  Anything higher than this ($175k) can/will sit on the market for an indefinite period of time.

I still think it's hilarious that sellers cannot require earnest money of buyers ($500 tops, regardless of value of the home) because no one has it...  not sure how the hell they're still getting loans, but they are...  I guess they just like eating PMI (scam).

Not sure if it's the same everywhere else, but single family residential on the lower end of the spectrum is being mercilessly bid up...  a couple explanations: (a) easy money for indigent families, tops out about where these properties are bid up to; (b) money on the sidelines chasing more return than CDs are giving (grandpa and grandma); and (c) down sizing.  As a potential investor, I wouldn't touch this stuff with a ten foot pole.  For whatever reason though, multifamily hasn't had the same appreciation and, relatively speaking, is a vastly better deal... 

Buy the multifamily, start a sinking fund, run it on 15 year amortization, pay it off in 5 years or less, use the income to offset the rent of your personal residence, when the single family market finally capitulates, go buy your dream house, but don't over extend, sell multifamily property if necessary...  obviously not a panacea, but a helluva lot better than holding your dick with a big note on a single family residence...  (for those places that haven't taken the plunge yet for sure)

Tue, 06/07/2011 - 11:26 | 1346936 Sgt.Sausage
Sgt.Sausage's picture

==> I'll be selling a property with net equity in it... 

Says you. Come back and report how much "equity" you realized after the sale.

Tue, 06/07/2011 - 11:42 | 1347003 MachoMan
MachoMan's picture

a comp house on my street (cookie cutter houses) sold within the last week (after a few days following a reduced price) for a price point that would give me 15%+ equity (at the price reduced to for sale).  Even factoring in closing costs, etc., I'm in the 15% ballpark...  at least...  while I recognize your sentiment (and certainly appreciate it, that's part of my reason for selling), if I was that worried I would have dumped it long ago...  we're talking about shitbird housing here (sub $150k), not some palace that will be difficult to move.

Tue, 06/07/2011 - 09:43 | 1346580 pasttense
pasttense's picture

So what percentage of new cars are underwater? Housing is a consumer good just like cars are.

Tue, 06/07/2011 - 09:47 | 1346591 Alcoholic Nativ...
Alcoholic Native American's picture

Good point.  ALL OF THEM.

The new normal is losing 50% of your homes value as soon as you sign the mortgage.

awwwwwwsome, simply awesome

Tue, 06/07/2011 - 10:32 | 1346718 ugly_avatar_Muir
ugly_avatar_Muir's picture

I do not know what planets you turkeys live in, but I've made money in RE and only in AmeriKa would a house be considered a disposable consumer item.

Tue, 06/07/2011 - 09:52 | 1346612 snowball777
snowball777's picture

We leave it as an exercise for the reader exactly how to repo a house and sell it one city down the road; liquidity is not to be underestimated.


Tue, 06/07/2011 - 09:44 | 1346583 Alcoholic Nativ...
Alcoholic Native American's picture




Tue, 06/07/2011 - 14:16 | 1347554 RichardP
RichardP's picture

I own, and I haven't failed.  Neither have my neighbors, who own.  But then, we bought our houses in the 1980's at the low end of the market.  And used the houses to live in and raise families.  When we die, we won't care what happens to the houses.

Tue, 06/07/2011 - 09:47 | 1346595 richard in norway
richard in norway's picture

"Not only was the decline in prices a clear force driving negative equity, but borrower equity extraction also significantly increased the risk of a negative equity position"


at the risk of appearing stupid, but are they saying that folk are so desperate that they are raising money on the declining value of their homes?

Tue, 06/07/2011 - 14:19 | 1347570 RichardP
RichardP's picture

They are making a point of logic.  Given two houses with the same market value, and given a decline in value that is the same for both houses - the house with a second mortgage on it will be under water faster than the house without a second mortgage.  Think it through.  It makes sense.

Tue, 06/07/2011 - 09:49 | 1346597 hedgeless_horseman
hedgeless_horseman's picture

Mr. Chairman: If we can just keep interest rates low, then this housing issue will be solved.

Mr. President:  How can we do that?

Mr. Chairman: The solution is called Quantitative Easing.

Mr. President:  Do you forsee any problems with this plan?

Mr. Chairman:  Not problems, per se.  We bankers like to think of the additional outcomes as features.  Trust us, you'll like it.

Tue, 06/07/2011 - 09:50 | 1346603 johnnynaps
johnnynaps's picture

Nj is reassessing property values and we all know that they aren't going to cut property tax! This number will be a lot worse next year when Uncle Sham raises taxes and more homeowners give up!

But then again, isn't this statistic like unemployment? I mean, after the bank forecloses, doesn't the homeowner fall off that chart into the same oblivion as the discouraged job seeker? If this is the case......we are in deeper shit than I thought!

Tue, 06/07/2011 - 09:51 | 1346604 SheepDog-One
SheepDog-One's picture

Hey did you hear the eCONomist yesterday who said the problem is we need to start building a shitload of new houses real fast? Wow and these people get paid for their opinions!

Tue, 06/07/2011 - 14:20 | 1347593 RichardP
RichardP's picture

If we put 10 million people to work for one year, and paid them each $50,000 for the work (regardless of what they are doing), do you think retail sales would pick up any?  The economist's logic is OK.  The question is, where would the money come from for the workers' paychecks.  If it comes from the government, why not just give the money straight to the "workers" and leave the uneeded houses unbuilt.

Tue, 06/07/2011 - 09:54 | 1346620 lizzy36
lizzy36's picture

But there is going to be a strong rebound in the 2nd half of 2011.

Plus there is going to be a housing shortage in 2012.

Time to average down.

I am currently taking orders for dow 20,000 hats (ZH logo on the back)......who wants in on the order?

Tue, 06/07/2011 - 10:48 | 1346804 Bam_Man
Bam_Man's picture

Are you married to Mark Zandi?

Tue, 06/07/2011 - 09:56 | 1346625 dick cheneys ghost
dick cheneys ghost's picture

some analysts are predicting another 8 million foreclosures ............giddy up.......

Tue, 06/07/2011 - 10:00 | 1346626 FreeNewEnergy
FreeNewEnergy's picture

I am proud to live in the Empire State:

New York borrowers were upside down by an average of $129,000, the highest average in the nation...


What the article does not point out is the fact that NY has, if not the highest, very close to the highest property tax rates in the nation. They are so high that the state has implemented a reduction plan - called STAR - that gives homeowners an automatic reduction in their prop. tax. The catch is that you have to pay on time to get the reduction.

Earlier this year, Tom Golisano, founder and CEO of PayChex, sued and won a property tax fight over a $6 million tax assessment. The court lowered it to $2.85 million.


Golisano set up a free seminar for people who wished to follow his lead, promising to give advice on how to fight and win property tax assessment cases. Limited to 500 attendees in Monroe County (Rochester, NY), the free seminar was completely booked within three hours.

I recently had my home assessment dropped from $124,000 to $82,000, a cut of more than a third. The town assessor said they would come by in the Fall (yeah, sure) to see if I had made improvements, the unspoken threat that they would again raise my assessment.

I felt like telling her that my plan was to demolish parts of the house, so to lower my assessment even further, but thought better of it.

With the average tax bill running well into the thousands of dollars, it would not surprise me one bit if NY counties began a cascading default in the not-too-distant future. Tax rates in NY have been too high for many years and the economy - what's left of our industrial base - in upstate, is moving underground, cash, trade, unreported, you name it.

We're fed up and are probably, as a group, the largest tax cheats in the nation.

Tue, 06/07/2011 - 10:00 | 1346629 equity_momo
equity_momo's picture

So if one had a modest sum of say 300k to buy outright , where would one look? Assuming quality of life was important , not just a cheap house.

Tue, 06/07/2011 - 10:17 | 1346672 SheepDog-One
SheepDog-One's picture


Tue, 06/07/2011 - 10:48 | 1346798 MachoMan
MachoMan's picture

South central/east united states...  lots and lots of retirees piling in to stretch their dollars (yankees)...

3/2 1600 sq ft newer build ~$135-145k all day...  some decent jobs...  and cheap as hell cost of living...  many streams/rivers/lakes and outdoor activities...  it ain't the riviera, but it'll do.

Tue, 06/07/2011 - 11:33 | 1346971 equity_momo
equity_momo's picture

thx for the response. as poor as the US economy is doing , real estate is "relatively" cheap on a western comparison.  i dont think anyone is going to escape this , so may aswell move to where money will go further.

Tue, 06/07/2011 - 10:45 | 1346774 johnnynaps
johnnynaps's picture

Costa Rica, but if you must stay in the US.....I figure Florida.

Tue, 06/07/2011 - 15:42 | 1347951 Stax Edwards
Stax Edwards's picture

Florida is much cheaper per SF generally speaking than CR right now.  There are exceptions in particular areas of course, but housing, food, fuel are all less expensive in FL than in CR right now.  Fuel is about half. 

Tue, 06/07/2011 - 10:55 | 1346825 Arnolds Love Child
Arnolds Love Child's picture

Patagonia Argentina

Tue, 06/07/2011 - 10:02 | 1346631 lizzy36
lizzy36's picture

But there is going to be a strong rebound in the 2nd half of 2011.

Plus there is going to be a housing shortage in 2012.

Time to average down.

I am currently taking orders for dow 20,000 hats (ZH logo on the back)......who wants in on the order?

Tue, 06/07/2011 - 10:08 | 1346637 FreeNewEnergy
FreeNewEnergy's picture


Tue, 06/07/2011 - 10:17 | 1346662 tawdzilla
tawdzilla's picture

And with 66% of homeowners underwater...they're still building new tract homes in Vegas:



Do NOT follow this link or you will be banned from the site!