These houses were made for walking

I was almost certainly underwater after buying near the peak in the Boston area in the late 1980s, but it never occurred to me to walk. Certainly one reason was that I ended up living there for almost 10 years (not planned; there was no plan). But I also wonder if the fact that we have more ready access to data today (Zillow, etc.) is making people more cognizant of their probable equity? And more information is enabling them to make more timely decisions on how to best deploy their capital?
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In this case, if I’m correct, I’m not sure if that’s good or bad.

Walking from homes is going to be a very serious problem going forward. Hopefully, the banks will wake up sooner than before. While it has taken us nearly 2 years to convince them that short sales were better alternatives to foreclosures, I am not certain they understand how many people will walk. In many areas, it could be higher than 50%. I’m a realtor in California and live in what was once an upscale area. The area is a lovely community built around a golf course in the hills. Most homes sold between $1,000,000 to in excess of $3,000,000. On the street that I live, there are 65 homes and all but 7 are seriously underwater. Most of the homeowners put down a lot of money when they bought but most of the homeowners were over age 50 and the community was built and sold between 2004 and 2006. Values have now fallen 50 to 60%! For example, when I acquired my home it was $1,350,000 and I obtained a mortgage of $900,000 – it is now worth $550,000 at best! Not only have I lost my entire downpayment of $450,000 but I still would owe the bank $350,000 if I were to sell it. Now at age 60 and knowing that it will take many years to regain the original value (it may never happen in my life), what sense does it make to continue paying a mortgage of over $60,000 a year not to mention upkeep and property taxes. Being a realtor, my income has dropped dramatically but more important I know that I will never regain my $450,000 and I can no longer pay the type of mortgage with my income cut in half.
I am being contacted daily by my neighbors all wanting to know what to do. At this point, I recommend to them (and following my own advise) to see if our lenders will consider a realistic loan modification. I am not optomistic and if the lender will not work with us, short sale is obviously our next option. Some nice young couples will benefit from being able to acquire this multimillion dollar home for $500,000.
This scenerio is happening in many California neighborhoods and the high end is going to be the next “bloodbath” which will push those values even lower. Hopefully, the Banks, the Obama administration and the power that may be will pay attention before it gets much worse. By the way, being a realtor, I do list REO properties and most of my new listings are already the higher end. We have worked our way through the lower end of the market. Unfortunately, until the credit markets loosen or the banks become realistic, we will not be able to move the higher end inventory. After all, how can you move up when your current value has crashed!
Never in my over 30 years in real estate and obvious desire to maintain a good caredit rating, would I imagine that I would become a walk away. At my age, I cannot gamble or waste any more money especially since all of my other assets are now also worth 50% and who knows, I might become ill and not even be able to work so I must begine to “save” what is left. The banks received their bailouts and now I will have to provide my own bailout. Cash now, not credit matters for babyboomers who have taken a big hit.

“Cash now, not credit matters for babyboomers who have taken a big hit.” That’s a really good way to put it. Thanks.