Patience, patience. The FBs are doubling down their bets with borrowed money. Comment #43 from this post over on SoCalMtgGuy’s website reports that many people carrying I/O loans refinanced last year and took cash out. They probably believe they can use that money to ride out the storm. $200K can float a big spender a loooooooong time, especially if they still have some other income coming in.
This is going to take a long time, and the declines may only be in the single digit percentages each year. Speaking of which, cawireman posted this great excel template that lets you compare renting vs. buying. Plug in some negative appreciation numbers (even 1-2% is enough) to get a real feel for just how screwed these people are.
