When you look at numbers stating that around 68 percent of all valley homeowners are “underwater” on their mortgages and that the number is expected to increase to as much as 78 percent before the housing market stabilizes, you’ll understand why I’m still concerned about the valley’s housing market.
However, information obtained by Wall Street’s Deutsche Bank Securities has Phoenix merely 20th on the list of cities with the largest number of homeowners currently underwater on their mortgages. On this list are several cities California and Florida; Las Vegas sits near the top of the list at number 4.
The information contained in the report is alarming. The report states that there are currently around 14 million homeowners in the United States that are underwater on their mortgages. According to Deutsche Bank’s research, that number will increase to around 25 million before the housing market begins to stabilize and that is estimated to happen in the first months of 2011. If we do hit numbers as high as 25 million, nearly 1/2 of all the nation’s mortgages will be underwater; by then, most of those mortgages will be backed by taxpayer funds.
The Phoenix metropolitan area has had price drops nearly equal to as much as half the homes value, which as has led to the negative equity problem in the area. The foreclosure rate in the valley has risen steeply because homeowners trying to sell their homes are not selling them for an amount that will cover the amount of the mortgage and other borrowers are just giving up and walking away. Some lenders are helping with this problem by making it possible for homeowners that are in over their head to modify their loans through a home loan modification program.
One major reason why the valley is in better shape than those cities listed above us in Deutsche Bank’s report is because the median home price in the valley continues to rise. Home prices in the valley have continued to rise since the low point in March of this year.
Source:
Valley Homeowners Fare Better than Some in U.S. – www.azcentral.com
