“Moody’s Economy.com estimates that 8.8 million homeowners, or about 10.3 percent of homes, will have zero or negative equity by the end of the month. Even more disturbing, about 13.8 million households, or 15.9 percent, will be “upside down” if prices fall 20 percent from their peak.”
San Diego is down 19+% from it’s Nov 2005 peak. I’m guessing we’ll see more ‘mortgage walkers’ as prices continue to fall and people have less incentive to pay heafty payments on a home that isn’t worth the loan amount. I have friends who overpaid in Murietta in mid-2007 with 95% financing (despite my advice not to) that are now about $150-200k underwater. What incentive do they have to keep paying the mortgage? A foreclosure on your credit is not going to be quite as taboo when all this works itself out.
