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High End Homes in Trouble

October 12th, 2009 Leave a comment Go to comments

Inspectors in communities with high end homes should be vigilant in light of a recent Wall Street Journal article.  http://online.wsj.com/article/SB125530360128479161.html?mod=rss_US_News Foreclosures are rising in the top end of the market and decreasing at the lower end.  Many of these homes had exotic mortgages that allowed people to defer paying the principle.  Now, however, they can’t refinance their way out of huge payments when the mortgages reset.  I’ve seen this happen in my local community.  My husband and I could never figure out how all of these young people with small children could afford the McMansions that were being built.  We always wondered where the huge incomes came from to go along with the huge mortgage payments.  I realize now that many of them were refinancing their way out of problems.  Police officers told me that many of them were only half furnished.  People were viewing homes as an investment instead of shelter.   When the loan reset, it was time to refinance.  But, a year ago the “music” stopped and owners couldn’t get a new loan, especially with home prices going down.  That’s when the “For Sale” signs started appearing.  We’ve seen a number of these behemoths sitting now for a few years without a sale.  It’s a trend to keep on top of which is why I like vacant building ordinances.

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