Quotes of the day: Luxury homes underwater

“The reason the low end stopped falling is because the government stepped in with affordable loans. There is no political will to bail out a million-dollar house.”

“There is no refinance market for you if you are underwater and outside the Fannie and Freddie framework. High-end neighborhoods are all suffering from the same problems of diminished income at a time when there is little equity to work with.”

“You are just starting to see the tip of the iceberg with luxury short sales. A lot of wealthy people are upside down in their mortgages and they just can’t afford the second or third vacation home anymore.”

– Scott Simon of Pacific Investment Management, Keith Gumbinger of HSH Associates, and Adrian Heyman of Property Advisors, all speaking to Bloomberg about the rising number of short sales in the luxury home market. About 12 percent of mortgages exceeding $1 million had not received payments in 90 days or more as of September, compared with 7.4 percent on all mortgages nationwide, according to the article. In the words of one homeowner quoted in the piece, “What’s the point when the market is going in the other direction?”

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