Yahoo! has an interesting piece today on foreclosures in high rent districts in the U.S. “Rich Neighborhood Riddled with Foreclosures,” provided by Forbes, lists properties over $1 million lingering on the market.
“About 7.7% of all mortgages nationwide are in trouble, either seriously delinquent or already in foreclosure,” reporter Morgan Brennan says, and the ritzy neighborhoods are not immune. One high-value area in Florida has a 20.5% foreclosure rate.
Frequent readers of Dr. Housing Bubble will know that already, even though the good doctor only covers SoCal.
If you are into schadenfreude, you can search for your area. We looked, and while some of the troubled neighborhoods pictured look gorgeous enough to make us wish we could live there, most are back East, except Malibu, CA, and some of the homes look tacky and derivative.
The article is misleading, too, since they claim you can see “the full list” od 100 high-income neighborhoods, but only show RE pix of 16 places. So, our schadenfreude was unsatisfied.
The term “strategic default” comes up here.
…analysts say they’re seeing a rise in the number of well-off property owners who stop paying their mortgages for calculated financial reasons. “Strategic defaults can be an even bigger issue with higher-end homes, where if you’re 25% underwater that could mean hundreds of thousands of dollars or more, because the borrowers may be more financially shrewd and consider it a financial decision to walk away from the home,” explains Daren Blomquist of RealtyTrac.
Investment lesson: The Rich have just as many financial headaches as the rest of us, but there are more zeroes on the balance sheet.