According to data released by the Mortgage Bankers Association, as of June 30, 2007, 21 percent of prime mortgage defaults in California were non-owner occupied properties. In Arizona, this same figure was 26 percent of prime loan defaults. Additionally, Arizona and California are also among the states facing the fastest increases in delinquent loans in the country.
"Defaults are on the rise in most parts of the country, but it should be recognized that it is not always the case of a homeowner losing his or her home but is often the case of an investor gambling on a continued increase in home values and losing that gamble," said Doug Duncan, MBA Chief Economist and Senior Vice President of Research and Business Development. Mr. Duncan also said: "California, Nevada, Arizona and Florida were among the states with the fastest home price appreciation over the last five years. This rapid price appreciation attracted both speculators and home builders, a volatile combination that led to an over-supply of homes that was beyond the capacity of the local populations to support. When this over-supply became apparent and prices began to fall, many of these investors simply walked away from their mortgages."
Yes, in San Diego it is NOT the sub-prime loans, but the speculative real estate greed factor that seems to have played a dominate role in our housing decline,.
Other prior posts on this factor were:4 Sure Signs of A Real Estate Market Top and #1 Cause of San Diego Housing Value Decline.
