The most expensive house to be lost to foreclosure in the past three years in Jacksonville, Florida, for example, sold for $1.5 million Wednesday – $1.4 million below its county property appraised market value. The nine bedroom, 11 bathroom, 10,000-square-foot, bank-owned Queen’s Harbour mansion, built in 2005, has its market value at $2.95 million set by the property appraiser’s office.
With the sixth-most-expensive ZIP Code in the country, Beverly Hills revealed a 700 percent increase in foreclosures of homes valued at $2 million and higher over the last three years.
Home prices are down almost 32 percent from their 2006 peak nationwide, and many economists expect them to drop at least 5 percent more in 2011; some expect even steeper declines. Millions more homes still face foreclosure as the sputtering economy, uncertain- and under-employment, and government spending and attempts to relieve the situation struggle to overcome the inertia.
With tight lending standards, and almost one-quarter of homeowners with mortgages underwater, it will be a long, difficult road for them to move into better homes because they owe so much more than their current house is worth.
Of the over 70 million Americans who were born between 1945 and 1960, one-third (or approximately 212,000 people) have zero retirement savings. The only money they have is their equity in a house, so they must sell when they enter retirement age, which some have begun doing. This adds more houses to the market, further pressuring prices down.