You can lump me in with the cheerleaders, I like cheerleaders, especially the NBA and NFL ones. But that’s not what I do here even if it may seem so. The OP referenced my hood, one that I am arrogant enough to think I know and understand. Not the nation or the state or San Diego, but my neck of the woods, that I learned enough about in my 20 years here and my 4 years as an amatuer real estate research junkie. The anectdotal evidence of knowing people who aren’t paying needs to be put in perspective, that’s all I did. The eye of the storm came through here already, we won’t see recovery but we are at prices pushing against a fundamental floor. The bulk of the risk is gone, most houses are selling for less than the loss taken by the previous owner, therefore it is impossible to lose the same amount because houses will not go below zero. When $200 a square goes for $80 a square, the former owner (bank, taxpayer, et. al.) took a $120 a square hit, you can’t lose that much, the most you can lose is $80 but it is unlikely you will. Unlike stocks, houses rarely go to 0. At $200 a square all economic indicators were great, at $80 they are horrible but I still believe it is at $80 when you look past the news and should have ignored it at $200.
My anectdotal perspective. On my street of ten houses, everyone paid about 600k, all of them have been in distress for the last year. Myself and another guy recently bought repos for less than half, two more are in escrow for similar prices, another is about list for a similar price. One person paid cash I believe, possibly a second one, and one more is falling behind and about to be foreclosed on or sell short, they are trying a loan mod right now. Within a few months we should have 6 post implosion buyers and two outright owners, so there are two left to fall but I don’t them yet and don’t know their situation, but neither have a nod on file. This second wave of buyers have mortgages between 1k and 2k. So there are two more left to fall, to be reset with buyers in the new world of 20% down fixed mortgages at prices on par with rent, people that had to prove they qualified. So this does not keep me awake at night, there are fewer brown lawns (actually almost none because of the weather) but every week or two another one in the neighborhood gets bought and I see a sod truck drop off a a new lawn. With each new lawn I feel better. With more than half of the “cleansing” behind us, I have no fear about my hood, they aren’t all going to leave tomorrow because they just got here. a year or two ago, my new neighborhood was featured on local and national news because half the lawns were brown, many of those shows were linked on posts here, which is exactly why I started to look at it. But that’s just my view, which is an impressive view of the whole valley that I didn’t have to pay extra for, courtesy of the tsuinami.
