This is a great site for underwater folks. I have spent the last few days reviewing relevent threads so I can evaluate my options. Thanks especially for Prof Shay for his tireless work.
You know I was a gnat's hair away from using my HELOC checks in 12/07 and am I relieved to learn here that if I had used them, my 2nd loan would have lost the non-recourse status in CA.
Year bought: mid 2007
Purchase price: 480K
Current Zillow: 325K
Loans: 1st = 375K
2nd = 70K
Type: purchase money, no re-fi
Monthly PITIA = 4000
As you can see. I am underwater by over 100K not counting down payment. There is no end to the pain in sight in Natomas, a suburb of Sac. If anything, my checking of foreclosures and pre-FC just in 95835 is alarming. This baby is ready to blow!
The next wave to hit is going to be Alt-A and OptnARM.
This could be huge, may last a couple of years minimum.
House prices in these parts of crash-centers of CA cannot stabilize until the excess inventory is worked off.
My view is as follows. Minimum of 2 years to stabilize. Stay flat for 2-3 years. Then housing may slowly rise due to market forces and inflation kicking-in.
So that would make it about 5+ years before there is any first stage of recovery. Maybe 8-10 years before my house resurface at the purchase price. But wait, even if it did, it is worth a lot less than today as inflation would have ravaged the net-present-value. Thats a lot of years of being a debt-slave.
My question to you folks, what do you think of my analysis?
Do you think I am an optimist, realist or pessimist?
Lets hear your view through the looking glass.