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Two Thirds Of All Nevada Mortgages Are Underwater

Tyler Durden's picture





 

The latest quarterly report out of CoreLogic is as usual full of curious insights about the state of US housing. Key among them is the finding that "negative equity and near-negative equity mortgages accounted for 27.8 percent of all residential properties with a mortgage nationwide in the fourth quarter, up from 27.1 in the previous quarter. Nationally, the total mortgage debt outstanding on properties in negative equity increased from $2.7 trillion in the third quarter to $2.8 trillion in the fourth quarter." In other words, courtesy of no Mark To Market, there is at least $2.8 trillion in debt held by investors (read banks and GSEs) that is marked at par and should be impaired. And one wonders why Fannie lost $16.9 billion in 2011 (up from $14.0 billion in 2010), and needed another taxpayer injection of $4.6 billion in Q4: it is so banks can pretend reality exists, and in the process avoid evicting tenants who live in these underwater homes, and who can pretend they don't have to pay their bills, but can spend money on iGadgets instead. Yet the scariest data point is that if one is currently in Nevada and looks at three houses right this second, two of them are underwater, or said otherwise, have negative or near-negative equity.

Among the other findings:

  • Nevada had the highest negative equity percentage with 61 percent of all of its mortgaged properties underwater, followed by Arizona (48 percent), Florida (44 percent), Michigan (35 percent) and Georgia (33 percent). This is the second consecutive quarter that Georgia was in the top five, surpassing California (30 percent) which previously had been in the top five since tracking began in 2009. The top five states combined have an average negative equity share of 44.3 percent, while  the remaining states have a combined average negative equity share of 15.3 percent.
  • Of the 11.1 million upside-down borrowers, there are 6.7 million first liens without home equity loans. This group of borrowers has an average mortgage balance of$219,000 and is underwater by an average of $51,000 or an LTV ratio of 130 percent. For all first-lien-only borrowers negative equity share was 18 percent, while 41 percent of all first-lien-only borrowers had 80 percent LTV or higher.
  • The remaining 4.4 million upside-down borrowers had both first and second liens. Their average mortgage balance was $306,000 and they were upside down by anaverage of $84,000 or a combined LTV of 138 percent. The negative equity share for all first-lien borrowers with home equity loans was 39 percent, more than twice the share for all first-lien-only borrowers. Over 60 percent of borrowers with first liens and home equity loans had combined LTVs of 80 percent or higher.
  • Nearly 18 million borrowers were between 80 percent and 125 percent LTV and, purely from an LTV perspective, eligible for HARP 1.0. The removal of the 125 percent LTV cap via HARP 2.0 means that over 22 million borrowers are currently eligible for HARP 2.0 when just considering LTV alone.
  • The low end of the market is where the bulk of the negative equity is concentrated. For example, for low-to-mid value homes valued at less than $200,000, the negative equity share is 54 percent for borrowers with home equity loans, over twice the 26 percent for borrowers without home equity loans.
  • Of the total $717 billion in aggregate negative equity, first liens without home equity loans accounted for $342 billion aggregate negative equity, while first liens with home equity loans accounted for $375 billion. Over $230 billion in negative equity is from homes valued at $200,000 or less.
  • There were 8.8 million negative-equity conventional loans with an average balance of $269,000 that are underwater by an average of $70,000. There were 1.7  million underwater FHA loans with an average balance of $169,000 that are underwater by an average of $26,000.

Those curious what the LTV histogram of US housing looks like, here it is:

More in the full report.

 


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Thu, 03/01/2012 - 22:32 | Link to Comment Kaiser Sousa
Kaiser Sousa's picture

this is no doubt bullish...

dow 14,000.....

Thu, 03/01/2012 - 22:55 | Link to Comment ACP
ACP's picture

I see all these facetious "bullish" comments (I've made my share), and realized, it's probably right. These criminal jokers at the Fed have one goal, and that is to keep all the money where they believe it rightfully belongs, which is amongst themselves.

And there is only one piece of the economy that they can "fix" with direct injections of cash, and that is the stock market. Fuckers, all. Burn the world to the ground in order to save their little baby.

Thu, 03/01/2012 - 23:22 | Link to Comment Coke and Hookers
Coke and Hookers's picture

Underwater mortgages are bullish for debt (slavery) based economy. Increased debt is the only thing that moves markets upwards these days so it's obvious that underwater mortgages are bullish. The more the better.

Increased debt is in reality the transfer of wealth from the middle/working class to the ruling corporate class engineered through bubbles, inflation and public future debt (bank bailouts). Markets are mostly based on the value of the ruling class's corporate assets and fiat profits. The more debt there is, the more wealth transfer there is and therefore the greater the value of the corporate class - and by proxy the market. This is bullish all around and we can expect to see a massive bull market on all fronts until the last dollar of real wealth has been sucked from the American people. (Then the people themselves will become an asset which can be collateralized - pretty much like livestock.)

The next step is to speed up the equities bubble and fleece every single pension fund in the country along with private citizens stupid enough to own stock. I predict stock market crash of epic proportions in a few months where the rest of the wealth not already confiscated by the ruling class will be transferred to our benevolant 1percent rulers.

Fri, 03/02/2012 - 00:19 | Link to Comment J 457
J 457's picture

There needs to be a crash to justify another trillion dollar stimulus buying MBS.  I thought it was to happen last Oct and was wrong.  Now I think we're setting up for early April after the EU implodes end of March and prints several hundred billion more euros causing USD to surge.

Fri, 03/02/2012 - 01:11 | Link to Comment dark pools of soros
dark pools of soros's picture

not sure there will be a crash anymore, since Israel wouldn't dare to lose even their handout money back into the stock market.  So it must mean fiat is toast and Robot Trader creams his pants from now until the reset

Fri, 03/02/2012 - 01:30 | Link to Comment The Big Ching-aso
The Big Ching-aso's picture

 

 

Two turds is better than three turds.   I know this is a shitty thing to say.

Fri, 03/02/2012 - 02:20 | Link to Comment lunaticfringe
lunaticfringe's picture

LMAO!! Ching-aso you are a funny mf'er.

Fri, 03/02/2012 - 02:40 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

+ 1

Yes.  One year member of the Lunatic Fringe Batallion of the Tin Foil Hat Brigade salutes his (probable) superiors!

Fri, 03/02/2012 - 11:31 | Link to Comment TheSilverJournal
TheSilverJournal's picture

Nationally, the amount of underwater houses is closer to 50%. Remember to include 6% for Realtor's fees and a small amount for other selling fees when considering if a house is underwater because truly being underwater is if the homeowner has to bring money to the table at closing.

TheSilverJournal.com

Fri, 03/02/2012 - 02:22 | Link to Comment blunderdog
blunderdog's picture

I call bullshit. 

One turd, when yer talkin' the size of a football, is way worse than three turds, when yer talkin' the size of marbles.

Fri, 03/02/2012 - 02:15 | Link to Comment cranky-old-geezer
cranky-old-geezer's picture

 

 

I predict stock market crash of epic proportions in a few months where the rest of the wealth not already confiscated by the ruling class will be transferred to our benevolant 1percent rulers.

I don't believe they'll go the stock crash route. Stocks are their #1 illusion of a recovering economy.

I believe they'll go the indirect confiscation route via more currency printing and bailouts along with the direct confiscation route of stealing pension funds, 401k's, etc, then stealing brokerage accounts, bank accounts, etc under the banner of national emergency and / or national security.

Maybe a last step before it all collapses will be letting the stock market crash.  But then the game is over.  It's the end of the road for America.

Fri, 03/02/2012 - 10:11 | Link to Comment Green Leader
Green Leader's picture

"...under the banner of national emergency and / or national security."

Hedge accordingly.

Fri, 03/02/2012 - 09:19 | Link to Comment ltsgt1
ltsgt1's picture

I think the dumb money is not taking the bait this time. The volume goes down as the markets rally, the big boys have set the trap but hardly no one is testing the water.

Fri, 03/02/2012 - 07:29 | Link to Comment LongSoupLine
LongSoupLine's picture

Yes...blame the Fed. That is a no- brainer. However, getting deeper in thought, one must ask, where is the outrage from Nevada's "champion son"...Sen. Harry Reed?
Dig into ol' Harry boy's money trails and I'll bet my 1st born there's perfect reason why crickets are chirping in his camp.

Fri, 03/02/2012 - 08:27 | Link to Comment j0nx
j0nx's picture

Amen. Fuck Nevadans. They made their bed when they reelected Reid so I don't want to hear any bitching from them. The state can slide into the ocean along with California for all I care.

Fri, 03/02/2012 - 08:48 | Link to Comment Confused
Confused's picture

Hahahahahahaha.....yes, Harry Reed!

 

Thanks for reminding me about that asshole.

Fri, 03/02/2012 - 10:04 | Link to Comment sessinpo
sessinpo's picture

I thought I would give you nightmares for the rest of your life. How about Harry Reid and Nancy Pelosi having a child? I'm suicidal already.
>

Fri, 03/02/2012 - 11:23 | Link to Comment Taterboy
Taterboy's picture

They did have a child and he's living in a big white house in D.C.

Fri, 03/02/2012 - 11:39 | Link to Comment FeralSerf
FeralSerf's picture

Mormons are Blankfein wannabees.  Harry's a Mormon. Remember that when you're at the Republican primary.

Sun, 03/04/2012 - 04:06 | Link to Comment natty light
natty light's picture

The relationship between developers such as Harvey Whittemore and politicians such as Reid is especially close in Nevada, home to a small fraternity of movers and shakers, powerful demands of rapid population growth and a huge amount of federally owned land.

 

 

http://articles.latimes.com/2006/aug/20/business/fi-nevada20

Thu, 03/01/2012 - 23:15 | Link to Comment ArkansasAngie
ArkansasAngie's picture

Yes ... it is bullish for those getting candy from the Fed and the government.

It is horse manure for the rest of us.

This has really gone too far.

Mark to market and default.  That's the only transfer of wealth that has any validity.

Fri, 03/02/2012 - 00:20 | Link to Comment DaveyJones
DaveyJones's picture

I thought in Vegas, the house always wins

Oh...that house

Wait, that analogy works

Fri, 03/02/2012 - 02:06 | Link to Comment FrankDrakman
FrankDrakman's picture

I thought most of Nevada was a desert. Wouldn't having a lot of stuff underwater help with the drought and all?

Oh, and sorry, Davey, on your untimely death. Did you take the last train to Clarksville?

Thu, 03/01/2012 - 22:36 | Link to Comment bgilliam83
bgilliam83's picture

funny shit, somehow I have 2 properties in Nevada and neither are underwater.  I do give investment advice for free and right now it's buy everything not nailed to the ground, especially Nevada (even tho it is I guess?)

Thu, 03/01/2012 - 22:55 | Link to Comment spankthebernank
spankthebernank's picture

Amazing! Prepare to lose your ass buying that 'cheap' stuff, unnailed, floating whatever

Thu, 03/01/2012 - 23:16 | Link to Comment lincolnsteffens
lincolnsteffens's picture

It is not his ass he needs to worry about. It is his marbles. Maybe when his "cheap" properties are 50% underwater he will

have found his marbles. We are still only back to 12 year old prices, and that is in nominal dollars. When it is back to 1980

prices it might be a good time to start nosing around.

Fri, 03/02/2012 - 02:38 | Link to Comment Maos Dog
Maos Dog's picture

Sections of Broward County in Florida actually hit 1970 prices at one point last year. 

Fri, 03/02/2012 - 02:43 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

S. Florida MAY be on its way back, but, we'll see.  Caution!

Fri, 03/02/2012 - 02:56 | Link to Comment respect the cock
respect the cock's picture

My best friend has 60 properties in Las Vegas.  Paid cash for all of them.

He's fucking crushing it.

 

Thu, 03/01/2012 - 23:31 | Link to Comment Gromit
Gromit's picture

It's not hard to learn new ideas. But it's very hard to shed old prejudices. Just as the bull market thta started March 09 left me on the sidelines, so many will miss real estate oportunities now.

What part of 2.75% 15 year FHA do you not understand?

 

Thu, 03/01/2012 - 23:58 | Link to Comment Gromit
Gromit's picture

Why do i post this these opinions which I know to be unpopular? Because if I can free just one Zhedger from his carapace of ignorance and prejudice my good deed for the day will be done.

Fri, 03/02/2012 - 00:44 | Link to Comment tickhound
tickhound's picture

Free them?  You mean suck them back in. 

Banks earn nothing from you saving anymore.  No real capital creation.  When the banking system entices, because it relies, on only your borrowing, it can't sustain jack shit.  Just short term juice.

Now is when you reply, "but the infinite growth model clearly demonstrates..."

 Do me a favor and skip to the next thing.

Fri, 03/02/2012 - 01:54 | Link to Comment Oracle of Kypseli
Oracle of Kypseli's picture

You are not wrong, when one wants to buy a lower priced house that he/she can afford compared to rentals. The problem becomes when interest rates jump, your equity disappears. And again you may still be okay if you still have a job in the same area.

In most cases however, people will be lured to a much higher monthly mortgage and will be locked for life. The safe bet is to rent and buy physical gold and silver. You can buy a house when you retire and do gardening by using $5k gold. 

 

Fri, 03/02/2012 - 02:23 | Link to Comment blunderdog
blunderdog's picture

Who'd have thought Gromit would be so angsty?

Fri, 03/02/2012 - 10:07 | Link to Comment sessinpo
sessinpo's picture

Dude, you are popular. You're just hanging out with the wrong crowd. sarc

Fri, 03/02/2012 - 00:28 | Link to Comment J 457
J 457's picture

Solid markets simply don't have FHA or Homepath homes.  But the shit markets have thousands.  If you want a nice property in a nice neighborhood you'll have to pay a premium, even in a down housing market and economy.  If you want to move to Stockton Ca or Henderson NV, maybe you can get a Homepath property for 90k with 3% down and then deal with Sec 8 renters for a few hundred bucks positive cash flow a month. That is until your renters steal your water heater, cabinets, dishwasher and light fixtures to hock at the local swap meet and leave you three months unpaid rent and a mortgaged property that needs 25k to rehab.  No thanks, I'll pass.  If it sounds too easy and too good to be true..it probably is.

Fri, 03/02/2012 - 01:56 | Link to Comment Oracle of Kypseli
Oracle of Kypseli's picture

Well put!

Fri, 03/02/2012 - 03:07 | Link to Comment AustriAnnie
AustriAnnie's picture

This is happening.  Housing values further decline because neighborhoods are going downhill due to Sec 8 renters.  The sad part is that homeowners who already own their homes or are making their payments are forced to live in a neighborhood that is going downhill around them.  For this reason I would hesitate to buy a home.  I know people who have bought, then ended up with next door neighbors they would rather not have, noise, vandalism, theft, etc.

Fri, 03/02/2012 - 00:22 | Link to Comment J 457
J 457's picture

Use your gold credit card to buy a few Vegas homes..A cool 30k and your in.

Fri, 03/02/2012 - 00:52 | Link to Comment Larry Dallas
Larry Dallas's picture

And all your tenants have Glen Lerner on speed dial for the moment you file an eviction. Or Golightly, even worse...

Good luck. Your tenants will bankrupt themselves and so will you by proxy.

Fri, 03/02/2012 - 00:52 | Link to Comment Larry Dallas
Larry Dallas's picture

And all your tenants have Glen Lerner on speed dial for the moment you file an eviction. Or Golightly, even worse...

Good luck. Your tenants will bankrupt themselves and so will you by proxy.

Fri, 03/02/2012 - 05:52 | Link to Comment Grimbert
Grimbert's picture

Are houses in Nevada not nailed to the ground? If I bought a house there could I end up in Oz?

Fri, 03/02/2012 - 10:09 | Link to Comment sessinpo
sessinpo's picture

If you are referring to the Oswald State Correctional Facility, that would be very bad.

Thu, 03/01/2012 - 22:34 | Link to Comment RobD
RobD's picture

Underwater bitchezs! I'm one of those in Nevada drowning in my house and I didn't buy anywhere near the peak.

Thu, 03/01/2012 - 23:34 | Link to Comment palmereldritch
palmereldritch's picture

Las Beachez!

Fri, 03/02/2012 - 00:58 | Link to Comment J 457
J 457's picture

But at least maybe your neighbor got a HELOC and a new SeaDoo and Escalade.  Too bad it was at your expense once they stopped paying mortgage, house went REO, and was sold for half of what you paid.  The new comp was just set as your neighbor can now start anew and leave you holding the bag.  Many people in same situation.  It no longers pays to be "responsible."

Thu, 03/01/2012 - 22:34 | Link to Comment bgilliam83
bgilliam83's picture

By the way, Nevada is a HUGE buy right now.  It's not california, no state tax.  Comfortable life style and the gas is as cheap as it is in Oklahoma...

Thu, 03/01/2012 - 22:41 | Link to Comment maxmad
maxmad's picture

it has to stop at zero, right bgilliam?

Thu, 03/01/2012 - 22:45 | Link to Comment prains
prains's picture

love nevada's ersatz water

Thu, 03/01/2012 - 22:56 | Link to Comment Cursive
Cursive's picture

@prains

Word.  Why wouldn't anyone want to buy residential property in the dessert? (/sarc)

Thu, 03/01/2012 - 23:01 | Link to Comment prains
prains's picture

the brown grass makes such a great counterpoint to the terra cotta, it's a design thing

Thu, 03/01/2012 - 23:13 | Link to Comment kaiserhoff
kaiserhoff's picture

 Methinks the word thou art searching for is "mirage"  ;)

Fri, 03/02/2012 - 00:33 | Link to Comment J 457
J 457's picture

Ahh.  Fernley NV.  High society meets is equeal.

Thu, 03/01/2012 - 22:49 | Link to Comment centerline
centerline's picture

Gonna be great if the shit really hits the fan with all that fertile land for growing food, modest summer temperatures, etc.

/sarc

Thu, 03/01/2012 - 23:00 | Link to Comment Manthong
Manthong's picture

Lake Mead should be pretty interesting this summer considering the absence of snow upstream this winter.

Thu, 03/01/2012 - 23:42 | Link to Comment Harry Dong
Harry Dong's picture

For a voice from Michigan, I have to second your opinion. Best time to buy is right now. No need to wait for even lower prices. Inflation is charging down the pike like a bull and nothing will be underwater in a few more years. Average home price in 10 years? $500,000

Is this so hard to figure out? Saw this happen in the 70's man. Would have loved to have that uber low interest payment that my folks had back then. Send me so of those fiat dollars, I'll sink it in real estate and look forward to 2020.

Or gold, yeah, that's been another  no-brainer since 1972.

Casino economy for sure. Don't bet against the house, bet with the house.

Thu, 03/01/2012 - 23:59 | Link to Comment kridkrid
kridkrid's picture

Yup... this is just like the 70's... except for the whole monetary system that is about to collapse thingy-ma-jig.  Inflation in the things you need, deflation in the things you own.  Do you really think people are going to be looking to buy the houses you are trying to flip to them when a loaf of bread costs $100.  You don't know what you're talking about... save yourself and stick with your gold idea... your other one is shit.

Fri, 03/02/2012 - 00:07 | Link to Comment Gromit
Gromit's picture

You haven't thought it through your own conjecture..

If your $100 loaf happens....then you will wish you had bought a home with vanishing debt instead of paying $50,000 per month rent.

Fri, 03/02/2012 - 04:26 | Link to Comment quartshort
quartshort's picture

If it comes to that I will live in my 0% GM paid for by taxpayer inputs.
Realestate value is based on location wages and local job market. Anything else is speculative.

Fri, 03/02/2012 - 09:53 | Link to Comment kridkrid
kridkrid's picture

You're under the false impression that inflation acts uniformly across goods and services. But if someone has the means to pay cash for a property today (one with access to a water source) I say go for it. But as some sort of money producing investment, hahahahahaha)

Fri, 03/02/2012 - 00:04 | Link to Comment Blano
Blano's picture

This voice from Michigan profoundly disagrees.  Prices are still dropping in most areas.  Despite all the foreclosures and alleged recovery, look how high Michigan still ranks in underwater mortgages.  

 

If you're an investor/landlord, go for it and good luck.  If not, don't IMHO.

Fri, 03/02/2012 - 00:42 | Link to Comment J 457
J 457's picture

I follow housing very close.  Its not getting better.  Here we are five years into the housing downturn and there are still about 6mm homes in distress, same as 2009, and at least another 2 mm that are REO or GSE owned.  As we continue to allow short sales, which now are making up most of the transactions in the growth states, we drive down everyone else property values.  This results in more underwater mortagages and more deliquencies and more foreclosures- it is feeding upon itself.  Yes, there will be a bottom when it becomes favorable for investors to buy and hold.  We're close to there in SOME markets but not many.  Another 15-20% price decline into 2013-14 should be anticipated in harder hit markets (CA, FLA, NV, AZ, ID) and then we can start recovery.  Also bear in mind, the rental market is weak in some areas because many people instead of renting are living with relatives to save money and restore credit.  Don't think thatr just because you buy a home that you'll be able to quickly find a renter.  And you'll need deep pockets if you have to carry that mortgage payment for any length of time without renters. 

Fri, 03/02/2012 - 03:26 | Link to Comment AustriAnnie
AustriAnnie's picture

Also, its hard to rent a massive 3 bedroom home to retiring baby boomers whose fixed income cannot support the utility bills.  Especially if that home is in the suburbs (gas expense plus ageing population does not want to drive long distances.)  While aggregate housing might do one thing, there may be a shift in the preferences as far as square footage, location, etc.  To assume that buying a McMansion prior to inflation is always the right thing to do, is dangerous.  Also, if energy prices go up faster than the housing value, this is a problem.  Hard to make your mortgage payment when food and gas are 80% of your budget.

Lastly, housing might go up nominally, but that does not mean you are better off.  Right now I have to ask myself, is there an alternate investment that will preserve my wealth more than homeownership?  Maybe, maybe not.  But I can invest in real estate and other inflation hedges via other methods, why do I want to own ONE house on ONE specific block, in ONE market?  Maybe I'm better off renting, and investing in the commodities used to build houses or a REIT or something else, if I truly believe housing is coming back with a bang.  Less risk because more liquid.  And I stay mobile, in case I lose my job and have to move to find work.  The you-must-buy-a-house-to-escape-inflation robotic mantra that is engrained in the American mind, is there because it has been the past trend.  But demographics change, the government's willingness (or should I say "ability", since the willingness has always been there) to steal from the people has changed.  

A volatile world requires flexibility and quick response to change. 

Fri, 03/02/2012 - 14:23 | Link to Comment RichardP
RichardP's picture

So those nomads were on to something, living on their camels?

Fri, 03/02/2012 - 01:49 | Link to Comment FeralSerf
FeralSerf's picture

If you believe the Baron's philosophy that you should buy when the blood's running in the streets, then now's the time to buy.

However, if you worry about whose blood is going to do the running . . . .

Fri, 03/02/2012 - 07:42 | Link to Comment jcaz
jcaz's picture

LOL-  lot of realtors reading this site now......

It's so cute when people come on to this site to pimp their real estate like hot stocks........

Like an earlier poster noted,  opportunities are best where capital flows the most freely-  real estate?   Not so much.....

Oh by the way, how is the job market in Nevada?   Oh my.......

Thu, 03/01/2012 - 22:35 | Link to Comment Osmium
Osmium's picture

New slogan for Fannie:  No one can extend and pretend better than us Bitchez!

Thu, 03/01/2012 - 22:47 | Link to Comment francis_sawyer
francis_sawyer's picture

Harry Reid bitchez!

Thu, 03/01/2012 - 23:01 | Link to Comment surf0766
surf0766's picture

He will foreclose on them and convert to section 8

Thu, 03/01/2012 - 22:35 | Link to Comment bigwavedave
bigwavedave's picture

who does the home valuations?

Fri, 03/02/2012 - 01:21 | Link to Comment dark pools of soros
dark pools of soros's picture

Zillow...  give or take 30%

Fri, 03/02/2012 - 12:59 | Link to Comment Quonk
Quonk's picture

Zillow offers a decent snapshot of your property...

Case Schiller is good for the big-picture snapshot of major metropolitan areas...

but the true paragon of valuation accuracy and interpretation is the NAR.  Since the real estate wave crested mid-decade they have provided information that has been so encouraging.  A sharply dressed professional woman telling me that everything is going to be okay is just what I need for good decision making.  I feel a warm glow when I see their commercials. The fact that their data has been far less accurate and more misleading than even government sources makes no difference to me.   It's that doggone professionalism that gets me every time.

Thu, 03/01/2012 - 22:36 | Link to Comment Stuck on Zero
Stuck on Zero's picture

The only reason this chart doesn't look worse is that most home prices are still ridiculously too high.  That will change.

Thu, 03/01/2012 - 22:36 | Link to Comment The4thStooge
The4thStooge's picture

Must be raining pretty heavy in the desert these days...

Thu, 03/01/2012 - 22:37 | Link to Comment q99x2
q99x2's picture

Both Buffet and Trump say buy homes in bulk now. Guess those fools have finally run out of places to protect their wealth.

What happened in Japan to home prices?

What kind of recession did they have?

What kind of recession does the US have?

Fuck them. They deserve what they get.

Fri, 03/02/2012 - 10:43 | Link to Comment serog
serog's picture

I wonder what the owner of Home Services of America has to gain from pimping real estate.

Thu, 03/01/2012 - 22:40 | Link to Comment engineertheeconomy
engineertheeconomy's picture

what a place to live when gas gets to be $20 a gallon and the only jobs are at Mc Donalds. Depressionville

Thu, 03/01/2012 - 22:49 | Link to Comment francis_sawyer
francis_sawyer's picture

You live in a fucking desert!

http://www.youtube.com/watch?v=P0q4o58pKwA

Thu, 03/01/2012 - 23:01 | Link to Comment Osmium
Osmium's picture

What a funny SOB.  RIP Sam.

Thu, 03/01/2012 - 23:06 | Link to Comment Mark Wilson
Mark Wilson's picture

Lol! "We have deserts in America we just don't live in 'em, asshole!!!"

Lmfao!

Fri, 03/02/2012 - 00:10 | Link to Comment BeerBrewer09
BeerBrewer09's picture

See this here, this is sand. You know what it's gonna be 100 years from now? IT'S GONNA BE SAND!!!!

Fri, 03/02/2012 - 00:47 | Link to Comment Ness.
Ness.'s picture

“When I was growing up, we’d eat meat. When we did not have meat, we’d eat fowl. When there was no fowl, we’d eat crawdad, when there was no crawdad, we ate sand.”

 “You ate sand?

“We ate sand.”

“Sand?”

 

... “Sand!

Thu, 03/01/2012 - 22:42 | Link to Comment SwingForce
SwingForce's picture

Dude, 44% in Florida is alot more people than AZ & NV combined and doubled, and does NOT count condoes, yuk yuk.

Thu, 03/01/2012 - 22:43 | Link to Comment Cult_of_Reason
Cult_of_Reason's picture

Maybe foreign central banks should also start buying US houses in addition to US equities.

Thu, 03/01/2012 - 23:44 | Link to Comment AUD
AUD's picture

Ahh... they have been buying for years. Many central banks got caught holding the Fannie & Freddie bag in 2008.

That's why the Fed had to step in with its USD loans.

Thu, 03/01/2012 - 22:43 | Link to Comment tobinajwels
tobinajwels's picture

Tyler, you need some articles on Andrew Breitbart he was a really Good Guy! Rest in Peace Andrew!

Thu, 03/01/2012 - 22:57 | Link to Comment surf0766
surf0766's picture

Where is the video he spoke of. I cannot wait to see it.

Thu, 03/01/2012 - 23:08 | Link to Comment tobinajwels
tobinajwels's picture

He had some stuff on( Barry you know who!) and then he collapses and dies very strange! May he rest in peace my sypathy goes to his wife & family!

Fri, 03/02/2012 - 02:39 | Link to Comment blunderdog
blunderdog's picture

better troll, please

Thu, 03/01/2012 - 22:47 | Link to Comment blindman
blindman's picture

..stays in vegas. ...
.
http://jessescrossroadscafe.blogspot.com/2012/03/james-koutoulas-mf-glob...
01 March 2012
James Koutoulas: MF Global Financial Collapse And the Shadow Banking System

Here is James Koutoulas of Typhoon Capital Management, and the founder of the Commodity Customer Coalition, discussing what happened with MF Global on Russia Today. As an aside, I would be more than pleased to present an informative interview with Mr. Koutoulas on US or British television, but there do not appear to be any.

What could be alarming is that the conditions that led to the loss of customers' funds at MF Global have not been corrected, and it could be happening again at some other firm even now. We just may not realize it because the losses have not yet been publicly disclosed.

As in the case of MF Global, the insiders and powerful customers learn about the impending loss first, and take steps to secure their accounts before the collapse and downfall occurs.

Thu, 03/01/2012 - 23:06 | Link to Comment goforgin
goforgin's picture

This is awful; but, the silver lining is that people should stop expecting to earn income from Ponzi investment games. The game is rigged.

Thu, 03/01/2012 - 22:48 | Link to Comment max2205
max2205's picture

Why is this story still making the rounds after 6 YEARS!

Thu, 03/01/2012 - 22:49 | Link to Comment Cursive
Cursive's picture

Neither Louisiana nor Mississippi, two states that are a consistently at the bottom of every list and constantly derided as backwards by the MSM, are on that chart.  Never give in to peer pressure.

Thu, 03/01/2012 - 22:52 | Link to Comment centerline
centerline's picture

Nah.  The just have been ignored for being shitholes.  But, then again Florida is a banana republic (we actually have bananas too).  LOL.

Thu, 03/01/2012 - 23:01 | Link to Comment Cursive
Cursive's picture

@centerline

Florida is fine, almost moved their some years back, but I'd take my shithole over the sinkholes and mostly vacant, overbuilt subdivisions filled with errant snowbirds.

Thu, 03/01/2012 - 23:10 | Link to Comment rufusbird
rufusbird's picture

"consistently at the bottom of every list"

Not completely true. I read once that they rank very high in internet port site hits...

Thu, 03/01/2012 - 22:52 | Link to Comment whoopsing
whoopsing's picture

I'm surprised NY is on the tail end,

Thu, 03/01/2012 - 22:54 | Link to Comment centerline
centerline's picture

Manhattan cash still bouying that market!

Thu, 03/01/2012 - 22:55 | Link to Comment whoopsing
whoopsing's picture

Not in my 'hood

Thu, 03/01/2012 - 22:52 | Link to Comment Mark Wilson
Mark Wilson's picture

Well I guess if you wanted to sell your house, being underwater on your mortgage would be a concern. You must like (and want to live in) the house or you wouldn't have bought it in the first place. Not bashing gold but, unlike gold, you can actually use a house no matter what it's worth.

Thu, 03/01/2012 - 22:55 | Link to Comment non_anon
non_anon's picture

no big surprise, LV suburbs have been in the slumps for some years now

on another note, LV was carved out of a desert with no water, look up the water wars

Fri, 03/02/2012 - 01:53 | Link to Comment FeralSerf
FeralSerf's picture

Bugsy said the Colorado River have more than enough for everyone.  Golf courses too.

Fri, 03/02/2012 - 11:26 | Link to Comment Taterboy
Taterboy's picture

So I guess the remaining third is lakefront property?

Thu, 03/01/2012 - 23:02 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

i'll double-down for the other third, dealer!Foreclosure Homes Hit 24% of U.S. Purchases Bloomberg

Thu, 03/01/2012 - 23:04 | Link to Comment fuu
fuu's picture

So what's in going on Louisiana, Mississippi, North Dakota, South Dakota, Vermont, West Virginia, and Wyoming?

Thu, 03/01/2012 - 23:15 | Link to Comment non_anon
non_anon's picture

i place my bet with either north or south dakota

Thu, 03/01/2012 - 23:59 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

what's goin on, marvin?

BBQ, beer, and babes, BiCheZ!

Fri, 03/02/2012 - 12:19 | Link to Comment fuu
fuu's picture

Just curious why they aren't on the chart. Is it safe to assume that they have less than 10% underwater mortgages?

Trying to get my house sitter security service for underwater home owners up and running.

Thu, 03/01/2012 - 23:11 | Link to Comment TrustWho
TrustWho's picture

How much of this negative equity is setting on the Fed balance sheet? In QE3, how much more will they purchase? This is theft, but what did they steal?

Thu, 03/01/2012 - 23:16 | Link to Comment whoopsing
whoopsing's picture

Peoples souls?

Fri, 03/02/2012 - 18:25 | Link to Comment TrustWho
TrustWho's picture

An excellent answer....I like the metaphor "our mothers' milk" because our children's future has been sucked until all the milk is gone.  

Thu, 03/01/2012 - 23:15 | Link to Comment palmereldritch
palmereldritch's picture

That's a lot of water. 

Which way to the Nevada beachez?

Thu, 03/01/2012 - 23:21 | Link to Comment Rogier
Rogier's picture

Shame on you Tyler for publishing this hoax. The rating agency's models clearly demonstrate that housing prices rise by 4% ad infinitum.

Fri, 03/02/2012 - 06:07 | Link to Comment SanOvaBeach
SanOvaBeach's picture

But that's an opinion.  That worked in Fed court w/ the 1st amend. defense.  I know, I know, your being sarcastic!  So am I....

Thu, 03/01/2012 - 23:25 | Link to Comment azzhatter
azzhatter's picture

transitory, the great recovery will take care of this. 

Thu, 03/01/2012 - 23:25 | Link to Comment rsnoble
rsnoble's picture

Maybe they can frack everyones backyard.  People need to realize it's not their fault and stop walking away from foreclosures! You want this house bitch?  Here it is..........a pile of fucking dust and 20 dead cops surrounding it.

Thu, 03/01/2012 - 23:28 | Link to Comment LasVegasDave
LasVegasDave's picture

The Nevada Homeowner experience; coming soon to a state near you.

What happens in Vegas spreads over the rest of the country.

Thu, 03/01/2012 - 23:42 | Link to Comment Rogier
Rogier's picture

Mosty certainly not. What happens in Vegas stays in Vegas.

Thu, 03/01/2012 - 23:41 | Link to Comment monopoly
monopoly's picture

Buy property in Nevada? I don't think so. 25 years ago we should have started to diversify. We had gambling, and then we had more gambling and finally they opened up more casinos for millions upon millions of confetti and we then had even more gambling. When the first Indian casino went up in CA. it was touted as no big deal. The people will still come to Nevada. For what. Reno is a cheap trick. The only lure in Northern Nevada is Lake Tahoe, which is in a recession all by itself. 

Don't get me wrong. I love living here. Been in Northern Nevada for 35 years. But we have zilch for growth. OK, yes, we built a ton of homes both here and Vegas, lots of banking, real estate agents running around in Escalades showing property. Yup, Harry Reid was proud. So lets see, gambling, housing, banking, real estate. We sure did a good job here. And you see how that worked out for us. 

The writing was on the wall over 20 years ago but the Casino Moguls would not go for change. So Harry did nothing. Harry is nothing.

Now in this country we still have a long way to go before property bottoms, much less starts higher. Shadow inventory will be forthcoming in large amounts since our state governments settled with the broken squids at pennies on the dollar. And as usual not one is indicted. So that will keep prices down nationwide. And at some point interest rates will rise, we all know that. Damn, sheeples cannot even qualify for a loan at 3.5%. And you are going to need 20% down soon from all lenders. Remember that you older guys here. That was the way it was for over 50 years. I remember about a year ago there were a lot of investors in Phoenix buying "cheap" houses, because they knew the bottom was in and it was a sure investment. Prices still going down, so that is a bust.

And we talk about this because it is just getting worse, not better. Of course there are some areas where housing is good and prices firm, but that is the exception, not the rule.

So, you need a cave. 1 house if you can afford it and feel secure about your job. 1. Housing as an investment is Dead. Over. The tech mania is dead, the internet mania is dead, and now the housing mania is dead. And at some point the funding crisis begins. And this current insanity will also end. Just keep pumping it in Benny, just keep it up. The piper will be paid.

Fri, 03/02/2012 - 00:23 | Link to Comment steve from virginia
steve from virginia's picture

 

Detroit now is Las Vegas in ten years. Without the water ...

Fri, 03/02/2012 - 07:39 | Link to Comment Optimusprime
Optimusprime's picture

Are you expecting a large immigration of African Americans into Las Vegas?  Look at the total picture.

Fri, 03/02/2012 - 00:37 | Link to Comment FeralSerf
FeralSerf's picture

I lived at Lake Tahoe (Nevada) for 20 years -- sold in 2006 fortunately. I love it there. The weather's perfect for about 8 months of the year.

I'd like to move back there. I'm still waiting for the prices of houses to get back to reasonable. It seems most of them are still owned by the banks and the asking prices are still over $200 a sq. ft.

Fri, 03/02/2012 - 00:50 | Link to Comment J 457
J 457's picture

Check South Lake, prices have cooled off in last six months.  Seeing decent deals on the CA side in Tahoe Keyes area.  North Lake and Truckee still holding value. 

Fri, 03/02/2012 - 01:29 | Link to Comment FeralSerf
FeralSerf's picture

It still seems pretty trashy and/or expensive to me in SLT. And there's also some concern about whether those idiots in charge there will be able to survive without a municipal BK.

There's also Calif. taxes. This place has no jobs. It should be cheaper than places like Stockton and Sacto. It used to be when the economy went into the shitter. And it's seriously in the shitter now. The casinos at Stateline are not very crowded. Parking is easy.

I prefer the east shore.

Fri, 03/02/2012 - 06:28 | Link to Comment SanOvaBeach
SanOvaBeach's picture

The view from the Heavenly ski lift looking at the lake and desert bottom is unbelievably unreal.  Hope u get back..........

Fri, 03/02/2012 - 00:41 | Link to Comment Schmuck Raker
Schmuck Raker's picture

When I think about real estate in Nevada I think of Sam Kinison. [No offense Monopoly]

Talk about 'unsustainable'.

Nevadans should be praying for Cali to drop into the sea, so they can fish for their dinners.

Fri, 03/02/2012 - 01:02 | Link to Comment Larry Dallas
Larry Dallas's picture

This guy says it well:
www.theendofrei.com

"welcome neuvo rich"...

Fri, 03/02/2012 - 02:51 | Link to Comment cranky-old-geezer
cranky-old-geezer's picture

 

 

Housing as an investment is Dead. Over. The tech mania is dead, the internet mania is dead, and now the housing mania is dead.

Yep, seems like all the bubbles have run their course.

No bubbles left now except stocks. All they can do now is print currency and pump stocks up.  That's pretty much it. 

But pumping stocks up isn't free.  All that currency printing is killing the dollar.

When the dollar collapses, that's it, game over.

Fri, 03/02/2012 - 06:23 | Link to Comment SanOvaBeach
SanOvaBeach's picture

Guess the FIRE economy did'nt work out for yea. Funding, Insurance, Real Estate.................damm "G"...............Gambling......fuck, where do I fit that in....FIREG..........FRIGE'ing.........Damm, almost forgot ....................................Prostitution......FIREGP.......GPFIRE.........................................................................

FRIG-PEEE economy did'nt work out for the Great State of Neveda

Sorry, best I can do

Thu, 03/01/2012 - 23:44 | Link to Comment JohnKozac
JohnKozac's picture
Ritz-Carlton to close 5-diamond Las Vegas hotel (Reuters)

 

http://www.reuters.com/article/2010/02/09/us-ritzcarlton-idUSTRE61850J20...

Thu, 03/01/2012 - 23:55 | Link to Comment kito
kito's picture

Despite all the Feds plastic surgery, this saggy bottom keeps dropping....

Fri, 03/02/2012 - 00:10 | Link to Comment pelican
pelican's picture

People still pay mortgages?

Fri, 03/02/2012 - 01:48 | Link to Comment putaipan
putaipan's picture

that's what i was just thinking..... i didn't see a chart saying how many

of these were no longer being paid on and the morgatage money being

spent into the economy.

Fri, 03/02/2012 - 00:31 | Link to Comment Pancho Villa
Pancho Villa's picture

Funny that two of the driest states have the most underwater mortgages. If they could only find some way to use all the water covering those mortgages for irrigation, they could make the desert bloom.

Florida I can understand. A lot of the state is just barely above sea level anyway.

Fri, 03/02/2012 - 00:39 | Link to Comment oddjob
oddjob's picture

Nevada produced about 5.5 million ounces of Gold last year. 7% of World production

Fri, 03/02/2012 - 00:53 | Link to Comment J 457
J 457's picture

Winamucca and Elko.  It doesn't get much better....for gold mining.

Fri, 03/02/2012 - 01:14 | Link to Comment FeralSerf
FeralSerf's picture

Good place for sheep too.

Fri, 03/02/2012 - 00:59 | Link to Comment cranky-old-geezer
cranky-old-geezer's picture

 

 

In other words, courtesy of no Mark To Market, there is at least $2.8 trillion in debt held by investors (read banks and GSEs) that is marked at par and should be impaired.

This is the biggest bottleneck in the housing market (other than MERS lost chain-of-title). 

Banks (and Fannie Mae and MBS trusts) are living in a fantasy world where the '08 collapse never occurred, refusing to write down the value of notes on foreclosed homes consistent with drastic drop in home values since 2007, preventing foreclosed homes from being sold at current market price.

Holding notes on their books at original par value so they don't have to book losses (and curtail huge bonuses) is one more proof structural problems in the financial system will not be fixed.

Mark-to-Myth accounting is keeping the financial sector going but it's killing the home market and preventing people from buying a home they can afford.

Bankers couldn't care less about the economy.  

All they care about is a good-looking balance sheet ...regardless how fraudulent it is.

Fraud is the life blood of the financial system these days.

Take fraud away and the whole system collapses.

Fri, 03/02/2012 - 01:14 | Link to Comment James T. Kirk
James T. Kirk's picture

If fraud is the lifeblood of the financial system, the worldwide system of fiat money is the lifeblood of fraud.

Fri, 03/02/2012 - 01:22 | Link to Comment rosiescenario
rosiescenario's picture

And it isnot just the low end that is in trouble. The foreclosure and short sales in Marin Co. CA (one of the wealthiest in the stae) have gone way up. Million plus homes whose "owners" have taken a hike are coming on the market in increasing numbers. (article in today's market Watch...soryy no link).

 

If the banks accelerate foreclosures and put those homes up for sale, then more homes will be underwater and their owners will either go for a short sale or go the foreclosure route.

 

Not to sound too over the top doomsday, but very few folks in CA bother with earthquake insurance.....many have figured out that the deuctible is so high that only if the 'big one' hit would they meet it and if that were to happen, the insurance companies would be bust. All we need now in CA is for a major quake and you'll really see a collapse in housing and the banks with it. We are overdue for a big one since the last Loma Prieta quake in 1989.

 

While we all focus on the next black swan coming from the ME, it could be something such as a quake.

Fri, 03/02/2012 - 01:36 | Link to Comment FeralSerf
FeralSerf's picture

EQ insurance is way overpriced for the risk:reward. If the EQ destroys the house, move and let the bank have it. Marin Co. has/had way too many very ordinary houses that people thought were worth a million plus. They never were, really. Times change.

Vineyards in Napa and Sonoma Co. are a bit cheaper, but not much yet.

Fri, 03/02/2012 - 04:04 | Link to Comment SAT 800
SAT 800's picture

Give it another year or year and a half. I remember being mind-boggled at the "valuations" people gave me for Napa Valley land. Turns out I was right. It was BS. At one time, one block in downtown Tokyo was worth as much as Manhattan Island; you think? No.

Fri, 03/02/2012 - 04:06 | Link to Comment SAT 800
SAT 800's picture

We don't need a Quake; "We have met the enemy, and he is us"---Pogo.

Fri, 03/02/2012 - 07:34 | Link to Comment SanOvaBeach
SanOvaBeach's picture

Be pro-active.  Have beach front property FOR SALE in Elko, NV.  Won't be beach front until the big one, but make an Invevtments for your children.  Will take Bit-Coins and/or old Enron stock certs. for payment.

Fri, 03/02/2012 - 01:47 | Link to Comment gridlocked
gridlocked's picture

I bet the U6 there is over 20%.

Fri, 03/02/2012 - 02:12 | Link to Comment haskelslocal
haskelslocal's picture

This report is sorely lacking previous quarters so readers can establish the trend. Is it getting better? By how much? At what rate? At least it mentions CA as getting better but no data.

Which demonstrates there's a bit of fear mongering here. Again and again this type of incomplete data in the MSM spreads nothing but blur. It'd be nice if ZH wouldn't condone such agregious and incomplete information. (Although I know ZH didn't prepair the report and is just passing info to us so thanks for that.)

Folks? $51k deep to a house at $219 and $84k to a $306k home is quite manageable and not dire.

 

Fri, 03/02/2012 - 02:24 | Link to Comment BigInJapan
BigInJapan's picture

Very close to 100% of Japanese mortgages are underwater. Get used to the future and stop thinking of a house as anything other than a place to live.

Fri, 03/02/2012 - 04:01 | Link to Comment SAT 800
SAT 800's picture

Very true. It takes awhile to adjust, however.

Fri, 03/02/2012 - 07:28 | Link to Comment Miss Expectations
Miss Expectations's picture

My friend owns a modest  older ranch house and she views it as a money pit.  She observed that "the pit" requires upgrades & repairs in $10,000 increments (based on actual estimates on scaled back upgrades):

New roof: $10,000

Upgrade 2 bathrooms: $10,000

Upgrade kitchen: $10,000

New driveway (she now has gravel): $10,000

Fri, 03/02/2012 - 07:42 | Link to Comment SanOvaBeach
SanOvaBeach's picture

Tell your friend, "Welcome to home ownership".  Must be her first one.  Poor girl.....................But she can brag to her friends, "I own a home".

Or, perhaps, the home "OWNS" her.................................bye

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