Home Values Likely Headed Down to New Lows

[mEDITate-OR:

One of the true puzzlements of our time is how many ARM resets really ARE left out there. Is your ARM reset graph what was then, or what is left now?

Take these numbers, for example:

The report also found that an estimated 2.5 million foreclosures were completed between 2007 and the end of 2009.

This is roughly one in every 20 mortgages outstanding at the time of the crisis.

More than eight in 10 of these foreclosures were on owner-occupied homes with mortgage originated between 2005 and 2008.

An estimated 5.7 additional foreclosures are imminent.

See, here is The Problem:

MOST of the mortgages originated between 05 & 08 were sand state ARMS and subprimes. According to another Alpha article that was US$ 2.5 Trillion NON-agency securitized packaged RE loans between 04 and 08.

The sand states have MOST of the underwater RE loans, MOST of the foreclosures, MOST of the strategic defaults, AND had MOST of the ARMs.

So, how many sand state ARM re-sets ARE there still left out there? Who, in Hell, like those of U.S. in Arid-Zone-Ah, really knows?

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Eric, permit me to focus/clarify.

IF there really are 5.7 imminent foreclosures, are you not also aware that MOST of the pending foreclosures and short sales are IN the same sand states?

See, here is The Other Problem:

The sand state ARM re-set problem and the imminent foreclosure problem may not be two problems, but the same one looked at from a different direction. And, if THAT is true, as we suspect that it is, then to say that the "re-set" problem no longer exists, or went away, probably is wrong.

And that does not factor in the "negative amp ARM's" - where a low current interest rate will not necessarily save them, much, from the new larger monthly payments. Nor the "liar loans", where they never did have the income to make the payments.

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Home Values Likely Headed Down to New Lows
http://seekingalpha.com/article/210753-home-values-likely-headed-down-to-new-lows?source=dashboard_macro-view#comment_update_link
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Tack, the replacement cost vs existing mortgages may NOT be inaccurate, depending on where you live.

In two recent article in the AZRep they report that fully developed building lots are being scooped up at a fraction of peak costs/values; and that builders, using less expensive employees and cost of materials, are able to BUILD and sell a new home at 40 to 50% less than at peak costs. What this suggests to U.S. is that IN the sand states where all Hell is broke (pun) loose, not only are there most of the ARM resets, and underwater current owners, BUT, and it is a big butt, the replacement cost for inexpensive homes AND your McMansions HAS dropped precipitously.

Add to that the continued lack of Jumbo RE loan sources, and massive loss in incomes/jobs/businesses, even for the rich and moderately so, and there is extreme downward pressure.

There really are two totally different RE worlds out there affecting U.S.!
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Tack, permit me to clarify.

In AZ we now have a "normal" supply of inexpensive homes - 4 to 6 month. However, we also have a multi-YEAR supply of expensive homes. The McMansions simply are not selling, at any price.

Second, which "replacement cost" are we - apberusdisvet, you and U.S. - taking about. Peak market then vs sand state now?

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