Wednesday, October 8, 2008

Under Water

A story in today's Wall Street Journal says that the slide in home prices have left one in six American homeowners owing more on their mortgage than what their home is worth. The news especially bad for those homeowners who have bought in the last five years or so.

With the overall mortgage crisis, prices are back to 2004 levels in Las Vegas, Los Angeles, San Francisco, Fort Lauderdale, and Minneapolis.

From the story:

"Stephanie and Jason Kirschenman thought they were being prudent when they agreed in late 2004 to buy a new four-bedroom home in Lodi, Calif., for $458,000. They put a substantial 20% down and chose a loan with a fixed interest rate for the first 10 years. Two years later, they took out a second mortgage to pay off some bills.

At the time, the home was appraised for about $550,000. But a mortgage broker recently estimated its value at well below the $380,000 the family owes on it, says Ms. Kirschenman."

The story included a handy-dandy map, on which you might notice Memphis is a nice shade of rose, meaning that between 20 to 40 percent of people who bought their homes in the past five years now owe more than the estimated value. (That's if I decoded the color correctly, which I think I did. Judge for yourself.)

From the Wall Street Journal.

But at least it's not magenta.

And in a separate note, if I made this map, I might have used completely different colors to avoid confusion, but I guess this way you can easily see the hot spots.

1 comment:

jccvi said...

I'm interested in some of the places that aren't on here. What insulates Birmingham, Louisville, Jackson, Kansas City, and Indianapolis?