Friday, February 29, 2008

Market update Canadian Home Building

Multiples Prop Up Canadian Home Building
The Canadian home building sector warmed up again in January from a winter chill that slowed activity in December. Builders kicked off the New Year by pouring the foundations for 222,700 new housing units (annualized rate), an above-expected level and close to the average over the past year.

However, key details of the report raised some questions, as the entire monthly increase came from the typically volatile multi-unit segment (up 64%). Single-unit starts actually fell 4.8% to their lowest level in more than six years. While this likely reflects an ongoing shift towards multiples in the face of growing land constraints in densely populated areas of the country, it is bound to make starts quite bumpy going forward.

Regionally, gains were registered in Central and Western Canada in January. All provinces in Atlantic Canada posted declines.

The Bottom Line: Combined with strong employment numbers released earlier this morning, this report suggests that economic activity picked up in January after a short end-of-year break in Canada. Even so, housing construction is expected to slow moderately during 2008, which will restrain growth in coming quarters.

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Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate


Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987

( BUS 905-828-3434
mark@mississauga4sale.com
8 Website : Mississauga4Sale.com

Homes for Sale

Thursday, February 28, 2008

Current Mortgage Interest Rates

Here are the latest rates from one lender I deal with:

Prime "A" residential rates

Rates effective 26th February, 2008

TERM

Discount RATES

POSTED RATE

6 months

7.00

7.05

1 year

5.95

7.30

2 years

6.05

7.40

3 years

6.05

7.40

4 years

6.05

7.35

5 years

5.79

7.39

7 years

6.20

7.70

10 years

6.25

8.49

5 year VRM

5.25

Prime: 5.75%

Rates subject to approved credit. Rate holds 90-150 days.

Many Mortage companies offer:

  • 100% financing
  • Ex-bankrupts and bruised credit applicants welcome
  • Cash backs up to 4%
  • New immigrant programs (clients with 9 SINs too)
  • Pre-approvals and approvals within 4 to 6 hours
  • 1st ,2nd mortgages and secured lines of credit regardless of income or credit history.
  • BFS programs
  • Equity programs and debt consolidation
  • Commercial and construction financing

read more about Interest Rates

Search the MLS or read more about Interest Rates, Power of Sale Properties, Price Trends and more at my website. Homes for Sale

Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate


Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987

( BUS 905-828-3434
2
FAX 905-828-2829 ÈCELL 416-520-1577
E-MAIL : mark@mississauga4sale.com
8 Website : Mississauga4Sale.com

Wednesday, February 27, 2008

This was the advice that I recently received from my RBC Financial Planner, makes sense to me!

This was the advice that I recently received from my RBC Financial Planner, makes sense to me!



Investing/Financial Planning Focus on the long term to weather stormy markets



One of the fundamentals of successful long-term investing is monitoring the progress of your portfolio regularly to make sure it stays on track. Sometimes, however, focusing too closely on the wrong things can prompt overreactions to current market conditions. And this type of short-term view can lead to decisions that have a negative impact on your long-term plan.



For example, suppose there's a sudden drop in the S&P/TSX Composite Index. The media often stress the negative side of the story and, if your portfolio contains Canadian equities or equity mutual funds, its value may go down as well. Does that mean your strategy is off track and you need to immediately adjust your holdings? Clearly, the answer is no. Emotional reactions to short-term events are likely to result in selling when the market is low — the exact opposite of what you should do. So how can you prevent your emotions from influencing your investment decisions? The key is to keep perspective and focus on the long term.



When you have a plan in place, you can confidently remain committed to it, knowing that day-to-day market news is likely to have little impact on your longer-term objectives or on the investment strategy that's designed to get you there. The long-term trend Although equities will always fluctuate in value, they offer the best potential for higher returns over time. That's why they play such an important role in a well-diversified portfolio. And despite daily fluctuations, over the long term, equity markets have historically always moved up (see chart on next page).



In fact, $10,000 invested in the S&P/TSX Composite Total Return Index in 1957 would have been worth more than $1.1 million by the end of 2006. Year after year, things happen in the world and people think of reasons they should stay out of the market. But equity markets outperform virtually all other investment opportunities on a long-term basis.



Opportunity cost



During periods of market fluctuations, many people are hesitant to invest, saying they are waiting for "better times." The problem with this approach is that better times usually become visible only after markets have already risen. Investors who have been sitting on the sidelines have missed a valuable opportunity to participate. A far more effective approach than trying to time the market is to establish a proper asset allocation that will put you in the best position to achieve your long-term goals, and then invest on a regular basis. This will help you to establish discipline, take advantage of investment opportunities as they arise and keep your plan on track — no matter what the markets are doing.



Financial planning services and investment advice are provided by Royal Mutual Funds Inc. Royal Bank of Canada, Royal Mutual Funds Inc., RBC Asset Management Inc., Royal Trust Corporation of Canada and The Royal Trust Company are separate legal entities that are affiliated. RBC Funds are offered by RBC Asset Management Inc. and distributed by Royal Mutual Funds Inc. Royal Mutual Funds Inc. is licensed as a financial services firm in the province of Quebec.



The material in this report is intended as a general source of information only and should not be construed as offering specific tax or investment advice. Every effort has been made to ensure that the material is correct at the time of publication, but we cannot guarantee its accuracy or completeness. Individuals should consult with their personal tax advisor, accountant or legal professional before taking any action based upon the information contained in this report.



Please consult your advisor and read the prospectus before investing. There may be commissions, trailing commissions, management fees and expenses associated with mutual fund investments. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.



Financial planning and success in Real Estate


Search the MLS or read more about Interest Rates, Power of Sale Properties, Price Trends and more at my website. Homes for Sale


Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,


Mark


A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate


Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987

( BUS 905-828-3434
2
FAX 905-828-2829 ÈCELL 416-520-1577
E-MAIL : mark@mississauga4sale.com
8 Website : Mississauga4Sale.com


Tuesday, February 26, 2008

Downtown Toronto Taxes are highest in Country!

Downtown Toronto Taxes are highest in Country!

Even before Toronto announced its latest property tax hikes yesterday, Toronto took the dubious honour for having the highest property taxes in Canada, according to a detailed report issued by the city of Edmonton. Together with Ottawa, Brampton, Hamilton and London, Ontario municipalities take five of the top six spots on the list. This is something most homeowners in these cities know intuitively every time they pay their tax bill. Now they have it confirmed by an objective report that compared more than 30 municipalities across Canada.

Toronto ranked first with the highest taxes paid at $3,912, followed by Brampton at $3,826. Ottawa was third at $3,532; Hamilton and London were fifth and sixth at $3,305 and $3,078 respectively. St. John's, Newfoundland, deserves credit for taking last place with the lowest average tax at $1,540, and Surrey, BC was second last at $1,814.

This sad but helpful property tax news is timely as city councils across Ontario prepare their budgets. As well, Premier McGuinty's freeze on assessments for homes expired at the beginning of 2008. Not only will tax rates be going up, but for the first time in a few years homeowners will take a second hit if their home value reassessment shows an increase above the average increase. Assessment changes will take effect for 2009 property tax rates.

What is especially helpful about the Edmonton report is that it compares property taxes in a dollar value instead of as a percentage. Some mayors, like Toronto's Mayor Miller, try to defend high property taxes by hiding behind what appears to be a lower rate than other cities. This is hiding because the average value of a home is high in Toronto so the total taxes paid for a Toronto homeowner are higher. When paying taxes one cares less about the rate paid or the details of the complicated formula used. Instead, one cares about how much money is being taken year over year. That is the only comparison relevant to a taxpayer, not whether the rate is 0.82 in one city versus 1.15 in another city.

The main reason for high and growing property taxes in Ontario is that municipal spending is out of control. Municipalities have a spending problem, not a revenue problem. While mayors continue to clamour for more and more money from many sources, their appetites for spending grow unchecked.

Data from Statistics Canada shows that municipal revenue across Ontario has been running at three times the rate of inflation. In 2006 municipal revenue was up 6.3% while inflation was only at 2.0%; in 2005 revenue was up 7.2% and inflation was only 2.2%. Despite Ontario municipal revenues ballooning from higher taxes, more transfers from other levels of government, higher user fees and new taxes in Toronto; mayors continue to complain that they don't have enough.

It is interesting how mayors can work together cooperatively when it comes to demanding transfers from other levels of government or getting new taxing authority from the province. If that same energy were transferred to creating efficiencies and reducing costs, the report out of Edmonton might show a different -and welcome -conclusion.

Read more about prices http://www.mississauga4sale.com/TREBprice.htm

Search the MLS or read more about Interest Rates, Power of Sale Properties, Price Trends and more at my website. Homes for Sale

Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate


Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987

( BUS 905-828-3434
2
FAX 905-828-2829 ÈCELL 416-520-1577
E-MAIL : mark@mississauga4sale.com
8 Website : Mississauga4Sale.com

Sunday, February 24, 2008

Will Canadian Mortgage Interest Rates ease next week when the BofC meets?

Will the Mortgage rates ease when the Bank of Canada meets in early March?

Borrowing costs declined the last Friday in January as major Canadian lenders and banks cut their mortgage interest rates on several longer-term mortgages and loans.

Royal Bank, TD Canada Trust and Laurentian Bank all announced cuts ranging from 0.05 to 0.1 of a percentage point.

With the change, a posted five-year closed mortgage rate now ranges from 7.39 to 7.4 per cent.

The banks' posted 10-year mortgage rate was 8.05 per cent, down 0.1 of a percentage point.

Rates on one-year closed mortgages remained unchanged in a range from 7.25 to 7.35 per cent.

On the preceding Tuesday, the Bank of Canada cut its key overnight rate the target rate is sets for overnight loans between major banks by 0.25 of a percentage point, and signalled that more cuts will be likely to keep the Canadian economy on track.

The cut by the central bank led major banks to cut their lending costs on variable-rates mortgages.

Refreshing news, since it took two Bank of Canada reductions to get the banks to reduce their fixed rate mortgages, in case you weren't watching!

Let's see if the next meeting the Bank of Canada will reduce rates or not, only time will tell

Today's current mortgage rates

Search the MLS or read more about Interest Rates, Power of Sale Properties, Price Trends and more at my website. Homes for Sale

Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate


Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987

( BUS 905-828-3434
2
FAX 905-828-2829 ÈCELL 416-520-1577
E-MAIL : mark@mississauga4sale.com
8 Website : Mississauga4Sale.com

Saturday, February 23, 2008

Fraser Institute 2008 Report on Ontario's Elementary Schools is out



Fraser Institute 2008 Report on Ontario's Elementary Schools is out


The Report Card on Ontario's Elementary Schools: 2008 Edition collects a variety of relevant, objective indicators of school performance into one, easily accessible public document so that anyone can analyze and compare the performance of individual schools.


The Report Card assists parents when they choose a school for their children and encourages and assists all those seeking to improve their schools.


You can find all of the reports at this link



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Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,


Mark


A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate


Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987

( BUS 905-828-3434
mark@mississauga4sale.com
8 Website : Mississauga4Sale.com


Homes for Sale

Friday, February 22, 2008

REMAX reporting Canadian residential real estate market gains in last 10 years

Residential real estate markets across Canada post solid gains over past decade, says RE/MAX


Pent-up demand, population growth, tight nventory levels,
and the longest economic expansion since World War II
collectively fueled one of the best decades on record
for residential real estate in Canada, according to a
report released today by RE/MAX.
RE/MAX Decade in Review 1997 - 2007 found that major housing
centres across the country experienced strong consecutive
growth between 1997 and 2007. Average price spiraled
upward while unit sales climbed in tandem as more and
more Canadians bought into homeownership.
Nationally, average price almost doubled in the 10-year period, rising from $154,606 in 1997 to $307,265 in 2007, for a 7.1 per cent annually compounded rate of return.


Home sales across the country increased just over 57 per cent from 331,092 units in 1997 to more than half a million sales last year. Edmonton led the country in terms of percentage increase in average price. The city saw a 203 per cent upswing in housing values - or an 11.7 per cent increase annually - with average price rising from $111,587 a decade ago to $338,636 in 2007.

Prince Edward Island experienced the highest percentage increase in unit sales, with the number of homes sold up 119 per cent in the 10-year period. "Immigration and in-migration have played a serious role in jumpstarting residential housing markets, particularly in British Columbia, Alberta, and to some extent, Saskatchewan over the past decade," says Elton Ash, Executive Regional Vice President, RE/MAX of Western Canada. "At first, there was an influx of

American buyers, especially in Canada's coastal regions and recreational hot spots, as our southern neighbours took advantage of the almighty US greenback.

Then the European and Middle Eastern purchasers flooded the market, buying up real estate considered 'cheap' by international standards. In recent years, there have been a growing number of purchasers from Mainland China. From a global perspective, there's no question that Canadian real estate brings good value to the table."

Percentage increases in home sales varied across the country, with Prince Edward Island experiencing the greatest upswing over the past decade, followed by St. John's at 106 per cent, Kelowna at 84 per cent, and Saint John at 77 per cent. Most markets (12 of the 19 surveyed) reported increases between 40 and 60 per cent. Average price has also seen substantial escalation over the 10-year period, with posted gains ranging from a low of 54.4 per cent in London-St.Thomas to a high of 203 per cent in Edmonton. Appreciation in Western Canadian markets surpassed all others between 1997 and 2007, with Calgary ranking second in terms of price appreciation at 189 per cent, Kelowna at 179 per cent, Saskatoon at 137 per cent, Winnipeg at 118 per cent, Victoria at 114 per cent and Greater Vancouver at 99 per cent.

In 2006, homeownership rates in the country were the highest on record at 68.4 per cent. Population growth has contributed to heated market conditions - especially in Calgary (+31.4 per cent), Edmonton (+20 per cent), Toronto (+20 per cent), and Vancouver (+15 per cent) where percentage increases have hovered in the double-digit range. Overall, Canada's population rose to almost 33 million in the 2006 census, up approximately 10 per cent from 1996 figures.
"The non-cyclical nature of the decade comes as some surprise," says Michael Polzler, Executive Vice President and Regional Director, RE/MAX Ontario-Atlantic Canada. "Never before have we seen such a continuous run up in Canadian real estate.

Clearly, strength in all markets has been directly linked to solid growth in local, provincial and national economies. Low interest rates, job security, and consumer confidence have all served to further bolster home-buying activity across the nation."

Robust economic performance in Western Canada has also drawn job seekers from across the country, looking to capitalize on employment opportunities. As demand for housing increased across the country, the supply of homes listed for sale began to contract. Multiple offers were commonplace in many areas, some with sales-to-listings ratios as tight as 80 to 90 per cent.

Nationally, 1997 marked the first year since 1988 that the sales-to-listings ratio hit 50 per cent. The sales-to-listings ratio would remain above 60 per cent from 2001 onward - rising to as high as 68 per cent in 2002.

The decade was not without its obstacles - the high-tech meltdown, a US recession, 9/11, SARS, Mad Cow, a blackout that affected the entire Northeastern seaboard, natural disasters such as ice storms, hurricanes, and forest fires and more recently, the credit crunch south of the border.

Given the continuation of sound economic fundamentals, it's expected that residential real estate markets across the country will continue to experience healthy activity, albeit at a more moderate pace.

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Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate


Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987

( BUS 905-828-3434
mark@mississauga4sale.com
8 Website : Mississauga4Sale.com

Homes for Sale

Thursday, February 21, 2008

Canada's Housing Market Outlook for 2008

Canada's Housing Market

"What remains the greatest source of weakness in today's U.S. economy is a continued source of strength in Canada," says Warren Lovely of CIBC World Markets in a recent report. "While the U.S. housing market is mired in deep recession, Canada's own housing market has demonstrated extraordinary resilience."

This week the Canadian Real Estate Association (CREA) predicted that national home sales will rise to 8.1 per cent in 2007, setting an all-time sales record. Prices are also expected to go up by a whopping 10.4 per cent in 2007, with another 5.5 per cent increase in 2008.

"Resale housing activity was a juggernaut in the second quarter of 2007," says CREA's chief economist Gregory Klump. "Record breaking sales activity in the first and second quarters forced CREA to revise its forecast upward."

Although you'd expect the trade association to produce a rosy forecast, it's not much different that the latest prediction from the country's federal housing agency, Canada Mortgage and Housing Corp. (CMHC). It's also expecting a new sales record in 2007, an increase of 6.5 per cent compared to 2006. CMHC says prices will increase by 9.9 per cent this year and 5.2 per cent in 2008.

Why is the Canadian housing market still so strong? The economic fundamentals that have carried this housing boom for several years continue to be in place. They include record-high employment rates, rising incomes and strong consumer confidence.

In addition Subprime Mortgage Crisis Not Likely to Spread to Canada and Canadians do not have the same exposure in the subprime mortgage market that has come back to haunt U.S. home buyers.

However, the recent shocks to the stock market may change the Bank of Canada's plans to hike interest rates again in the near future. CMHC says that one, three and five-year posted mortgage rates will be in the 6 to 7, 6.25 to 7.25, and 6.50 to 7.50 per cent ranges respectively for the rest of this year and in 2008.

In analyzing CREA's sales figures for July, Porter says that 17 of the 25 reporting cities posted double-digit sales gains compared to last year. "All cities west of Lake Superior reported double-digit price increases last month, led by the 53.7 per cent sprint in Saskatoon," he says. "However, the price surge is not confined to Western Canada, as Hamilton, Sudbury and Quebec City have also posted double-digit increases. Meanwhile, the previously white-hot Alberta markets are showing some signs of simmering down. Sales in both Calgary
and Edmonton fell, while inventories climbed last month. In particular, while average prices in Edmonton are still up a whopping 38 per cent year-to -year, sales fell 21 per cent and new listings almost doubled. That combination points to a market headed for a correction."

Prices are forecast to increase by 17.4 per cent in Saskatchewan, 11.2 per cent in Manitoba, 9.9 per cent in B.C., 9.2 per cent in Nova Scotia, and 8.6 per cent in Ontario this year.

read more about:Homes for Sale

Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate


Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987

( BUS 905-828-3434
mark@mississauga4sale.com
8 Website : Mississauga4Sale.com

Homes for Sale

Wednesday, February 20, 2008

More signals that our real estate market is cooling a little

Toronto Real Estate Board (TREB) Average Prices and Graph

The Canadian Home Sales are not as strong as they were in January of 2007l

The Canadian housing market continues to gradually lose steam after a prolonged show of strength. Today's January existing home sales data from the Canadian Real Estate Association show that resale activity faded 0.4% from the prior monthwhich was already somewhat on the softer side of recent trendsand sales were down 8% from a year ago as well. That's a massive turnaround from last year's 7.6% rise in overall sales.

The lousy weather may have played a small role in restraining sales last month, although it's not as if January is typically a treat on that front. As Canadian sales have lost a bit of momentum recently, we may finally be seeing some signs of cooler price gains as well: Average home prices were up 8.6% from year-ago levels in January, compared with an average increase of 11% for all of last year.

The yearly price rise is somewhat skewed by the mammoth 69% and 37% jumps in Regina and Saskatoon (respectively), although at least 12 cities reported double-digit gains last month.

The previously steaming hot Alberta markets continue to cool considerably, and are now acting as a significant drag on the overall sales figures. Sales in Calgary (-30.9% y/y) and Edmonton (-21.0% y/y) fell steeply from a year ago, while new listings continue to rise sharply. That's not a favourable backdrop for prices, and both have seen price increases dip into single-digit terrain.

The Bottom Line: With the further dip in January, Canadian home sales are now well below year-ago levels, adding further evidence that the great boom is winding down. Sagging affordability appears to have finally dug into activity, most notably in Alberta.

Still, prices across most of the country remain well above year-ago levels and most markets are well balanced, so we're not looking at serious strains in the housing market. Modest interest rate relief will also provide a helping hand.

see Graph of Average GTA prices

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Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate


Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987

( BUS 905-828-3434
mark@mississauga4sale.com
8 Website : Mississauga4Sale.com

Homes for Sale

Which US States and Counties have the worst Foreclosure rate?

Read more about:Homes for Sale GTA Power of Sales

Which US States and Counties have the worst Foreclosure rate?

Foreclosures are hitting communities across the country, but these are the counties with the highest share of negative equity--where more is owed on the home than the mortgage is worth. Using data from RealtyTrac, a national firm that tracks foreclosures using data from multiple listing services, bank-owned property records, bankruptcy records, loan histories, tax liens and lender information, we evaluated which counties had the most negative equity loans, by examining all loans currently in foreclosure.

Counties are ranked by the overall number of homes with negative equity.

1. Wayne County, Mich.

With negative equity $1-$9,999: 4,582

With negative equity $10,000-$49,999: 5,416

With negative equity $50,000-$99,999 448

With negative equity beyond $100,000: 176

Percent entering foreclosure with negative equity: 38.6%

2. Clark County, Nev.

With negative equity $1-$9,999: 1,025

With negative equity $10,000-$49,999: 2,337

With negative equity $50,000-$99,999: 632

With negative equity beyond $100,000: 284

Percent entering foreclosure with negative equity: 22.9%

3. Maricopa County, Ariz.

With negative equity $1-$9,999: 801

With negative equity $10,000-$49,999: 1,898

With negative equity $50,000-$99,999: 419

With negative equity beyond $100,000: 218

Percent entering foreclosure with negative equity: 15.9%

4. Riverside County, Calif.

With negative equity $1-$9,999: 538

With negative equity $10,000-$49,999: 1,563

With negative equity $50,000-$99,999: 752

With negative equity beyond $100,000: 309

Percent entering foreclosure with negative equity: 18.7%

5. Los Angeles County, Calif.

With negative equity $1-$9,999: 496

With negative equity $10,000-$49,999: 1,435

With negative equity $50,000-$99,999: 652

With negative equity beyond $100,000: 326

Percent entering foreclosure with negative equity: 10%

6. Cook County, Ill.

With negative equity $1-$9,999: 880

With negative equity $10,000-$49,999: 1,236

With negative equity $50,000-$99,999: 281

With negative equity beyond $100,000: 285

Percent entering foreclosure with negative equity: 12.8%

7. Broward County, Fla.

With negative equity $1-$9,999: 515

With negative equity $10,000-$49,999: 1,456

With negative equity $50,000-$99,999: 474

With negative equity beyond $100,000: 163

Percent entering foreclosure with negative equity: 17.79%

8. Sacramento County, Calif.

With negative equity $1-$9,999: 469

With negative equity $10,000-$49,999: 1,367

With negative equity $50,000-$99,999: 618

With negative equity beyond $100,000: 154

Percent entering foreclosure with negative equity: 26.7%

9. Miami-Dade County, Fla.

With negative equity $1-$9,999: 515

With negative equity $10,000-$49,999: 1,178

With negative equity $50,000-$99,999: 371

With negative equity beyond $100,000: 208

Percent entering foreclosure with negative equity: 11.6%

10. San Bernardino County, Calif.

With negative equity $1-$9,999: 413

With negative equity $10,000-$49,999: 1,163

With negative equity $50,000-$99,999: 519

With negative equity beyond $100,000: 143

Percent entering foreclosure with negative equity: 18%

11. San Diego County, Calif.

With negative equity $1-$9,999: 356

With negative equity $10,000-$49,999: 1,000

With negative equity $50,000-$99,999: 526

With negative equity beyond $100,000: 218

Percent entering foreclosure with negative equity: 16%

12. Macomb County, Mich.

With negative equity $1-$9,999: 703

With negative equity $10,000-$49,999: 989

With negative equity $50,000-$99,999: 86

With negative equity beyond $100,000: 78

Percent entering foreclosure with negative equity: 37.9%

USA's Worst-Hit Foreclosure Locations

What could be worse than getting behind on mortgage payments? Owing your lender more than your home is worth.

That's what's happening to homeowners across the country, many of whom just a couple of years ago opted for interest-only or adjustable-rate mortgages. For them, just as their loans reset and interest rates rose, home values began to plummet, leaving them with negative equity; this is where their mortgage is greater than the value of their home.

Of course, some homeowners started off walking a shakier tightrope than others. Many subprime borrowers acquired piggyback mortgages, where a second mortgage covered the downpayment, leaving them with negative equity from the beginning. Indeed, 79% more U.S. homes entered foreclosure last year than in 2006, according to data from RealtyTrac, an Irvine, Calif.-based real estate research firm. Congress's Joint Economic Committee estimates that 2 million Americans will lose their home over the next two years, a figure in line with most research firms and rating agencies.

Who is most feeling the crunch? Using data from RealtyTrac, which tracks foreclosures using data from multiple listing services, bank-owned property records, bankruptcy records, loan histories, tax liens and lender information, we evaluated which of the nation's counties had the most negative equity loans, by examining all loans currently in foreclosure.

In Pictures: America's Hardest-Hit Foreclosure Spots
The usual suspects top the list. Wayne County, Mich., home to Detroit, is first, with 10,622 homes in foreclosure with negative equity, 176 of which have more than $100,000 of negative equity. Clark County, Nev., where you'll find Las Vegas, has 4,278 homes in foreclosure with negative equity and lands at No. 2.

Rounding out the top five are Maricopa County in Arizona, and Riverside and Los Angeles counties in California.

Best and Worst Cities For Renters
Of course, not all foreclosures in a given area fit the same profile. In Wayne County, for example, almost 40% of all current foreclosures are on properties with negative equity. By contrast, of foreclosures in Miami-Dade, another area hard hit by the subprime crisis, only 11.6% have negative equity.

What does that mean? If an area has a high rate of foreclosures with positive equity, there are two likely explanations. Either it's an area where resetting adjustable-rate mortgages are pushing homeowners into delinquency, or the current appraised value of the home (which is the basis for calculating positive equity) is higher than the home's current market value. For an area such as Miami, where both are true, it's a sign that more foreclosures are looming as ARMs reset and appraised values drop to the level of current market values.

"The market in Detroit has been softer for much longer so there's more potential for price declines," says Kermit Baker, an economist at the Harvard University Joint Center for Housing Studies. "Miami is just starting to get to that point, but the writing is on the wall."

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Another problem is the sometimes illusory nature of positive equity. Consider that often the appraised value upon which the positive equity is based does not take in to account the cost of selling the home; this often includes a broker's fee as well as legal fees and other selling costs. A homeowner with low positive equity may see it erased upon the sale of his house.

Should You Short-Sell?
As prices continue to fall in many markets across the country, some owners are considering a short sale. This is when a borrower negotiates with his lender to sell his home at a loss, taking a bet that home prices will further depreciate and that a short sale will bring in more cash for the lender than would a foreclosure and auction.

"If the equity in the house is sufficiently negative, there may be an incentive for the household to engage in a short sale," says Anthony Sander, a finance professor at Arizona State University. "But the more negative the equity, the less likely the lender or servicer will be willing to agree since it increases the loss."

The environment for short-sellers is better, thanks to the Mortgage Forgiveness Debt Relief Act, passed last month, and enacted on Jan. 1, 2008. It eliminates the tax liability for short-sellers. Before this bill, if you sold a $250,000 home for $200,000, the IRS considered the $50,000 gap earned income and taxed it as such. Not so today.

That's good news for underwater mortgage holders in expensive markets, who are more likely to see larger spreads. Los Angeles County, Calif., Kings County N.Y., and Riverside County, Calif., have the highest instances of homeowners, with more than $100,000 in negative equity.

Still, those considering a short sell need to do their homework before taking the plunge.

First, understand the gamble. A short sale will serve as a black spot on your credit history. While urgency is important, understand that there will likely be another home buy in your future, and it'll be more difficult to acquire a loan if you have a history of skipping out early and leaving the lender with the bill.

Then judge the market. Do serious research into your market at the neighborhood level. If the homes all around you are headed to foreclosure and prices are falling like a stone, lenders will be eager to cut their losses and agree to a short sale. If this is the case, speed means everything. If your equity falls too far below zero, lenders are less likely to agree to a short sale because it costs them more.

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Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate


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