janelane wrote: Four states — Arizona, California, Florida and Nevada — accounted for about 89 percent of the foreclosures, a disproportionately high amount of the newly reported figures. Those regions have suffered the sharpest price drops.
That makes more sense. Before, the article says that 1 in 10 homeowners is foreclosing or delinquent on their payments, and I couldn't believe that about Georgia. -janelane
Hrm... Article says 39% but you quote as 89%. Lots of foreclosures in Atlanta. Real Estate is local but lending is global. There are lots of people in this town who have purchased homes that they can't afford on the presumption that appreciation will generate enough equity to cover their interest rate resets. Now people like that can't get those loans anymore, and so there are fewer buyers, which caused prices to drop, which screwed the assumptions built into other loans, which reset and went into foreclosure, which is causing further price decreases, which is what is going on everywhere. There hasn't been the kind of speculation that other markets saw... There were people flipping houses but not as many of them and not as aggressively. (And home prices in California were already GaGa before the real speculation started.) So Atlanta hasn't seen the kind of price increases that other areas have seen. Furthermore, Atlanta is growing (and due to oil price increases likely to become more dense) and that has some real updraft on real estate prices other than in the exurbs. But things are certainly out of whack in general in this town and prices are correcting down right now. There has also been a lot of investment by builders, particularly in luxury condos and all those "from the low 800's" townhome developments. That stuff bothers me. It remains to be seen whether there is going to be enough demand from baby boomer empty nesters looking to downsize to actually fill up all of this inventory. Certainly, a lot of developments are on hold or are having trouble obtaining financing. The bottom line is that there are problems and risks in Atlanta. Of course, I just bought. I have a complex set of considerations for that, but chief among them is that I needed a place to live, and I bought way less house than the real estate industry says I can afford (closer to 2x income rather than 3-4x), and so I should be able to continue saving money in spite of having a mortgage. I would certainly recommend that people exercise extreme caution in regard to buying in this market. I am concerned that devaluation will eat away at my principal and create a financial liability that is difficult to recover. At best I think I've set up a liability that I can manage. If I make money, then thats a bonus. I do not consider it an expectation. This is another case where the normal financial opportunities for people our age have been squandered by the irresponsible behavior of our next elders. This won't be the last... RE: Nearly 1 in 10 Homeowners Face Loan Problems - NYTimes.com | 
