The Poor Rich
David Streitfeld, columnist with the NY Times says Biggest Defaulters on Mortgages Are the Rich
More than one in seven homeowners with loans in excess of a million dollars are seriously delinquent, according to data compiled for The New York Times by the real estate analytics firm CoreLogic.
By contrast, homeowners with less lavish housing are much more likely to keep writing checks to their lender. About one in 12 mortgages below the million-dollar mark is delinquent.
The CoreLogic data measures serious delinquencies, which means the borrower has missed at least three payments in a row.
First... what defines "rich"? Because as a witness to the luxury real estate market in Atlanta between 2001 and 2007 I can assure you that being rich was not a prerequisite for buying a home priced over $1 million. In fact, the Atlanta luxury home market is mostly comprised of folks who simply bought more home than they could really afford. A classic case of Irrational Exuberance.
And what will this "movin' on up" theme for the distressed market do to the under $1 million markets? Well...downward pressure on prices, of course. The rich get poor and the poor get poorer.