By Emerson Drake
Studies are showing that nationwide more than 32% of all mortgaged properties are underwater meaning owners owed more than the property was worth. The numbers are expected to increase to 48% by the first quarter of 2011. Unfortunately the national numbers don’t reflect the true picture regarding Modesto.
Here today, our percentage of underwater mortgaged property stands at 84%. That's an almost unbelievable number for most of us. Only Merced and El Centro have higher numbers in the entire country and they stand at 85% underwater.
The Home building industry which would include developers, builders, appraisers, loan institutions. and Real Estate businesses helped drive a market in which overpriced homes became the norm and a market which in the long run would become unsustainable..The serious delinquency rate here in Modesto is 18.99% meaning the combined percentage of mortgages more than 90 days delinquent or in foreclosure.
According to reports, homes available for sale are being withheld from the market to create a false market price.A recent story in the local McClatchy Bee stopped short of describing the deep concerns and machinations taking place in our local real estate market.
With our unemployment rate being around 16.2% depending on how you rate it and it doesn’t appear that is going to improve until the summer of next year at best.At a time when strategic default would seem very reasonable it's a wonder why more people aren't doing it.
Here's a link I suggest that anyone upside down in their mortgage read and understand. And if you don't have mortgage problems you may want to read this to fully understand the problems your neighbors are having.
http://www.sacbee.com/static/weblogs/real_estate/SSRN-id1494467.pdf
