Thanks for posting that – very interesting reading.
They do have some local figures for CA, where in fact it seems that there are less people with negative (or little) equity than other areas in the country due to the large amount that bought pre-2003 and experienced massive increases.
The author argues and concludes that there is not a problem for the lending business or nationally economy as a whole because the amount of risky (teaser, or high rate) adjustable loans that also have minimal equity is fairly small as a percentage of the overall financing of residential housing.
He doesn’t extend the analysis to say “how many foreclosures is enough to drive down prices in an area?”. I imagine that he’ll leave that to other real-estate folks to analyze – he seems like a numbers guy and the analysis is on the amount of default loss that may be incurred, and not on the subsequent effect on the housing market.
I thoroughly recommend reading this. Lots of interesting facts and figures…
