Source: http://s.wsj.net/public/resources/documents/info-NEGATIVE_EQUITY_0911.html
Here is an update of the US housing market. It's mind boggling that close to 50% of all homeowners with mortgages in the states of Arizona and Florida had negative home equity (mortgage owned is more than market value of the home) in the 3rd quarter of 2009, with the country's average at 23%.
The US economy is recovering, if we consider the rise in existing home sales as one of the supportive indicators. However, this is only in the beginning of removing excessive housing inventory. We are in an uncharted territory of our financial history. Little was done since the financial crisis of 2008 to address the problem of excessive risk taking, except more debts was piled on. Also, the latest burst in stock market indices only masked away dire needs for a reform in our financial structures.
Excessive money with very low interested flooded the market (see chart below), so it would not be a bad idea to be extra cautious in the short-term as assets are getting bid up.
Money Stock; M1 Yr/Yr% , (total amount of money available in an economy at a particular point in time)
(SA Billions $) (Source: Moody's)
