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Moody's: 15.4 Million Homeowners Are Under Water

By
Real Estate Broker/Owner

According to Moody's, 15.4 million homeowners are currently under water; this number is up from an estimated 13.6 million at the end of 2008 and it appears that the number will continue to rise over the next couple of years.

Contrary to CNBC's Jim Cramer and Larry Kudlow, the housing market is not nearing a bottom, in fact, nationally speaking the housing market is no closer to a bottom than it was last year.  What this means is that based on the ongoing supply and demand imbalance for housing due to rising foreclosure rates caused by a deteriorating job market and weak demand, there is every indication that the national housing market could continue to lose 8-12% in value per year over the next two to three years.

In the absence of a meaningful housing stimulus plan, the number of zombie homeowners will only escalate, further complicating any efforts towards a housing recovery.

 

 

 

 

Comments(5)

John Mulkey
TheHousingGuru.com - Waleska, GA
Housing Guru

Sounds like good news to me, Mark. All they need to add is that the number is lower than expected and it should help stimulate a rally on Wall Street : )

May 17, 2009 05:41 AM
Mark MacKenzie
Phoenix, AZ

John:  That is hilarious - and it so so true!

May 17, 2009 05:48 AM
Elizabeth Benefield
Montana Country Real Estate - Libby, MT

Interesting Blog we will see what happens . How does any one really know. A year ago what is going on right now wasn't foreseen as much . Especially the job loss. It make you wonder what they were thinking allowing out sourcing of the jobs.

May 17, 2009 06:00 AM
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

That's an amazing amount of homeowners who are underwater.  I'd like to think we are close to the bottom, but I just don't see it.

Jul 01, 2009 04:37 PM
Brian Griffis
Realty Choice - Springfield, MO

I am surprised that number is so LOW.  I mean, I would have thought there were that many in California alone.  I guess it is like any other estimates.  Moody's has no idea how much people owe on their houses vs. what they actually owe to the bank.  These are just estimates.  Another problem with estimates is that the values of these properties are estimated based on what has actually sold.  One has to consider that most homes aren't for sale and it is not a liquid market, so estimates are far from accurate.  I would have to estimate based on the number of home equity refinances and low down loans made over the last 10 years, that the number is probably closer to double that.  Scary to think about. 

Jul 06, 2009 05:48 AM