A couple of stories that provide some personal perspective on the scope of the current problems.
From the Wall Street Journal:
Travis Jackson walks through his modest ranch house, admiring the kitchen’s built-in spice rack and the red-oak floors. He draws back the curtains, and sunlight illuminates the pride on his face.
The young banker just bought Federal Reserve Chairman Ben Bernanke’s childhood home at a foreclosure sale….
Mr. Bernanke’s family sold the property more than a decade ago. It ended up on the block late last year after its former owners fell behind on their mortgage payments.
Though some may read cosmic significance in that story, for me it’s just a vivid personal illustration of how widespread this phenomenon has become. Also along those lines, the San Diego Union-Tribune reports that 28% of homeowners in San Diego County owe more on their mortgage than the house is worth; statewide, the number is 26%. The median home in San Diego last year sold for 45% (or $160,000) less than the same house had previously sold for. If you live in the area, here’s their map of how that breaks down geographically: