We developed luxury homes during the boom in country clubs, coast, etc in the $3mm-$6mm range.
One of the differences with they type of pain/foreclosure for this is the type of loans used to buy the homes. Because of the size of the individual loans they were not part of the fannie/freddie/gov cabal and are typically left on the books of the lender or whoever bought them.
Additionally, most 1st TD’s were apx $1mm to enjoy the tax write off then they would supplement the 1st with 2nds and leverage their stock portfolio to make up the balance. Thus, the first is not automatically underwater but the balance of the debt is. Additonally, a high portion of these loans are done by local banks, not the big banks, thus watch the local lenders sink under the wieght but that won’t make the headlines.
Foreclosures will happen, however, the are often done quietly and under wraps as a deed in lieu etc to avoid the ‘shame’. its an insiders market/sneaky shadow market.
