Home, Home I'm Deranged, Part 14

If I asked you which state was currently leading the nation in steepest home price drops heading into 2011, odds are pretty good you'd rattle off a dozen before you even got close to the answer.  Idaho is currently the dubious champion in that category, and no region in Idaho has been hit harder than the state's Treasure Valley, from Boise west along I-84 to the Oregon border.

Michele and Ben Pearson need a new home for their family of eight, currently squeezed into 1,800-square feet of living space.

With six children — including 2-year-old triplets — the couple wanted to upgrade from the three-bedroom home they purchased in the Sutters Mill subdivision in Kuna three years ago.

Their problem: They owe $180,000 on the home, which is now valued at $121,600, according to the Ada County assessor’s office website.

In industry parlance, it’s called being “underwater,” or owing more on a home than the residence is worth.
CoreLogic, a provider of consumer, financial and property information, recently reported that 44,524 homeowners — or almost 34 percent of Treasure Valley mortgage holders — were underwater on their home loans. Another 6 percent, or 7,687 borrowers, had less than 5 percent equity in their property.

It’s a situation that leaves a homeowner with very few options.

A full one-third of homeowners in the Boise area are now underwater.   That means there's no up-selling, plunging tax revenues, no housing market at all to speak of.  At this point it's a matter of holding on as prices plunge.  We're seeing the third wave of underwater mortgages now, states like Idaho and Alabama are seeing their housing markets disintegrate now, while the states where the problem started, California and New York, are seeing modest gains.

But overall, the housing depression rages on.