Many U.S. Homeowners Owe More Than House Is Worth, Zillow Says

Here's another source for you, Steve:

http://www.amazon.com/Worlds-End-2009-Philip-Dunn/dp/1585422843

Keep in mind the power of denial, discussed at length in another thread. It doesn't really matter that a homeowner is underwater as long as he doesn't need to sell and thinks his property is worth holding on to.

West81st- "It doesn't really matter that a homeowner is underwater as long as he doesn't need to sell and thinks his property is worth holding on to".

I disagree. I believe it does matter. If a home owner knows his home is worth less then he owes, he/she will fell their over all wealth diminish and be much more reluctant to spend. This of course adds to the "death of the consumer". It's much like if a person is worried about losing their job. If a person feels that their job is in jeopardy they will delay spending and shift to conservation of personal funds for a rainy day. It all effects the economy in a negative way.

Its so nice to have these forums so I can re-read what I read on Bloomberg

Thanks for that, Will. A book on the Bible. How'd you know I'm a literalist?

Here's a book for you:

http://www.amazon.com/Real-Estate-Boom-Will-Bust/dp/B0012SMGME/ref=sr_1_1?ie=UTF8&s=books&qid=1218544921&sr=1-1

"Why the Real Estate Boom Will Not Bust - And How You Can Profit from It: How to Build Wealth in Today's Expanding Real Estate Market"

Yup.

"Its so nice to have these forums so I can re-read what I read on Bloomberg"

You re-post it on your site, so I assume you're used to it.

difference between using a reputable source as a backup for an argument, and simply pasting a link or an entire article on a site. Why dont you change it up a bit, and show your knowledge (which I know you have) and make an argument as to why the article is either right or wrong, and how things may roll out in the future?

Im just saying Steve that you have a reputation of placing a bloomberg link, or an entire bloomberg article to start a thread. And at the end, you say, 'no effect on manhattan' or 'the foreigners are moving in', or 'of course this doesnt affect Manhattan'.

Slightly different format.

dco: True. I just meant that underwater homeowners don't necessarily affect the market. It's clear that the market affects them (by putting them underwater), but the opposite doesn't necessarily hold. And if an owner is in denial about his paper loss, there isn't even a significant wealth effect.

I don't know how widespread that kind of denial is. But I think it's amusing to see posted - on the same board and in rapid succession - stories that say (a) that owners are underwater and (b) that they're in denial. If they're in denial, it doesn't matter much that they're underwater, at least not until they wake up.

urbandigs, the reason that sometimes I don't give an argument is really that it's tiring to say the same thing over and over again (though I do!) and get the same answers back: you need to count the tax benefit using a ratio that doesn't count the tax benefit, it's worth twice the price to own because you can pick out your own appliances, your landlord is going to raise your rent 20% every year from now to eternity.

The purpose of this link is to provide just one more piece of evidence in my long-standing argument that everyone is familiar with. Things are bad out there.

Thanks for the tip, Steve. Where do you think I get my crazy ideas from?

steve - send me an email

West81st- Got ya. I was not trying to show you up. Actually, I feel your post to be both neutral and knowledgeable in regards to markets. I have learned many new things from people like you on this site.

"Things are bad out there." What are you talking about, Steve??

Yeah, the overall national economy is very sluggish, no doubt the banks are hurting. Not to mention global warming and the War in Iraq.

But Manhattan real estate is holding up. Yeah, they could go down a little bit. But "things are bad out there?"

You really are a Gloomy Gus.

West81st - I also find your posts to be balanced and informative. But I somewhat disagree with your point on denial. It can (and often does) postpone the downturn, but it can't avert it. That's the whole capitulation point everyone has seen here and elsewhere, and exactly why many housing downturns take a long time to play out.

Yeah, that was one of my dumber posts.

I don't see how homeowners in Manhattan can be upside down. Unlike the rest of the country, you have to put moeny down here. There is no 100% financing!

urbandigs, did streeteasy ask you to limit steve's posts because their servers are filling up with data readily available on the internet? My guess is that steve is the most widely ignored user on this site and without a doubt, the highest cost user for streeteasy. steve = cost reduction opportunity.

True, residential housing downturns take a long time to play out, and it's barely started in NY. But when it does, it's the 2-year sublet rule that most Manhattan coops have that triggers the big nosedive. And of course that pulls condos and houses down with the coops.

1987 . . . 1990.

alpine292, did you see my latest example on the "...market movement with comps" thread? Sorry to harp on it, I know it was just mentioned on another thread. Two buyers in a new dev condo in the East Village are down 15% because the developer can't move an identical unit and had to chop the price dramatically. If they put down 10%, that's it, they're upside down. Any new condo with units dropping 10% or more in value may have this happening.

new development is risky, and magnified in a marginal area like the east village

has anyone figured out that EddieWilson and Stevejhx are the identical person?

Same positions
Same style of posting a negative article as worthy of its own discussion topic
Same argument style
Same style of rebuttal, interspersing the original quote and his response
Same claim to have worked at an investment bank, but seemingly not in the investment banking group itself
Same language style and pedantry related to language
Same self-corrections of their own posting
Same imperfect ability to do math
Same level of anger
Same reference to "they" and "them" as out to get people who don't think real estate is going up

what else is the same ... anyone care to point it out?