Well even with the housing market’s collapse and the stock market’s tumble at least some people are still rich. That’s according to the latest data from the market research firm TNS.

The number of households with over $1 million in net worth outside of their primary residence increased 5.9% last year to an estimated 9.9 million nationwide. The mean age of these millionaires is 66. Their average net worth is $4.6 million.

Some 75% of them owned stocks. About 60% said their approach to investing hasn’t changed much. As the book The Millionaire Next Door pointed out a few years ago, most people get rich not by speculating, just by earning decent money, spending less than they earn, and socking away the difference.

New York is the metro area with the highest number of millionaires. There are 661,000 in the New York metro area, almost 10% of the population. Here’s the full top ten city list:

New York, 661,000 millionaires
Los Angeles 376,000
Chicago 343,000
Washington 264,000
Philadelphia, 232,000
Dallas 190,000
Boston 185,000
Miami 180,000
Detroit 178,000
San Francisco 178,000

We'll see what happens this year.

But the group and its optimistic chief economist Lawrence Yun appear to be up for the challenge, judging from the May 13 first-quarter single-family home press release with the title: “Mixed Home Price Performance Continues in Metro Areas, One-Third Show Gains.”

A better title might have been: "Two-Thirds of Metro Areas See Price Drops as the NAR Reports the Largest Quarterly Home Price Decline Since it Began Releasing Price Data in 1982."

The median home price for single-family homes fell 7.7% in the first quarter compared to a year earlier. The Sacramento metro area first-quarter median home price dropped a startling 29%. The median home price in Lansing, Mich. fell 27%. And in Sarasota, Fla. the median price declined 22%. Eight metro areas saw price drops of more than 20%. Only three metros saw increases of more than 10%.

But the press release skips over the big declines in California, Nevada, Florida, Arizona and Tennessee metros and notes, instead, that Binghamton, N.Y. median prices rose 11.8% from a year ago, prices in Peoria, Ill. jumped 10.4% and Spartanburg, S.C. home values leaped 10.1%.

NAR chief economist Lawrence Yun says that slowing sales in high-price areas is dragging down the national median home price and “the numbers don’t tell the whole story.”

Congress is presently debating Rep. Barney Frank’s proposal and others to offer federal funds to restructure home loans. The Bush Administration says its against such a widespread bailout. FreedomWorks, a Libertarian non-profit with former House majority leader Dick Armey at its head, is busy drumming up opposition to such a bailout. Their AngryRenter.com Web site says its generated 44,000 emails from folks protesting the bailout to the White House.

They’ve got a funny video as well, telling the story of one guy (Bob) who bought more house than he could afford and a woman (Sally) who saved her pennies in the hopes she could buy a home down the road. “Tax Sally to bail out Bob?” the video asks. It’s what the site calls “Mortgage Loan Welfare.”

Everyone knows the price of foreclosure on home owners. They lose a place to live, their credit rating, whatever down payment they made, their hopes, their dreams.

New numbers from ratings agency Standard & Poors spells out the cost to mortgage investors. For the 2006 vintage of subprime loans it’s about 19% of the loan amounts outstanding.

How do they get those numbers? S&P figures an astonishing 42% of the loans made that year to borrowers with bad credit will go into foreclosure. Then it calculates that about 45% of the amount owed on those loans will be lost. Here’s the breakdown on that: 19% is lost due to the decline in the market value of the home. That’s about a $40,000 loss on a typical loan of $210,000.

Then there is the 26% lost to the costs of foreclosure. It can take a year or more to go through the whole process from when a borrower stops paying to when the house is finally sold and the lender recoups whatever money it can. There’s 13.6% of the loan amount lost in interest payments. About 3% of the home value the lender has to pay in property taxes. There’s 1% in legal fees, 6% to real estate agents, about 3% of the loan spent on home maintenance.

Nobody wins.

The IRS will treat this as income and tax you on it. Even if you can afford it, short sales and deeds in lieu of also stay on your record. Bankruptcy can clear the slate at least if no workout is possible.

I thought about this when Pete Flint (pictured), the CEO and co-founder of Trulia, the San Francisco-based real estate search site, visited BusinessWeek earlier today to speak with me and Prashant Gopal. Flint talked about Trulia's launch of an ad network, but what struck me the most was what he said about the rapid growth of Trulia Voices, a forum for people to give and get local real estate advice. Flint says that it already accounts for about 10% of Trulia's traffic and is the fastest-growing portion of the sight.

Here's what Flint said:

"People are using the public forum in a private way to solve their problems. Real estate is very personal and people will tell the most heart-breaking stories. 'I just got divorced and I'm losing my house.' The community is very benevolent."

To be sure, many of the people posting answers are real estate agents who are looking for business, as pointed out in a cynical but probably all-too-accurate post by Barry Cunningham of Real Estate Radio USA at The BloodhoundBlog here. In fact, Flint himself told me that one agent claims to have generated $100,000 in sales commissions off of contacts made through his postings on Trulia Voices.

Nonetheless, I see a lot of sincere advice being given at Trulia Voices, by agents and non-agents alike. You can find a more supportive take on Trulia Voices over at Trulia's own blog, here.

To all the benevolent people who have given good advice to others in need at Hot Property and elsewhere: Thank you.

The problem for builders is that many buyers these days feel that a bargain in real estate is a moving target as prices continue to fall. Some builders, such as Shea Homes and Reno-based Pacific West
Companies, are addressing the issue by offering price guarantees of up to three years, the San Jose Mercury News reported. That means if a developer drops the price for a home like yours before the last home in your subdivision is built, you can collect a refund for the difference.

Residents in the Thornton Grove Estates in Hamilton Township, Ohio might have benefited from such a guarantee. Some Thorton Grove residents recently complained to reporters at WCPO-9 News that new homes in the development are selling for about 20% less than they paid a few years ago.

"To take a $60,000 hit on a house that I bought three-years ago – it just isn't right," resident Kevin Bardsley told the television station.

If it's any comfort, you are not alone. Here's what Zillow.com, the real estate website, says today:

"Of homeowners nationwide who purchased when U.S. home values peaked in 2006, one out of every two (51.6%) now owes more on their mortgage than their home is currently worth."

You're in better shape if you bought before or after the 2006 peak in prices. Here's the percentage of homes that are underwater on their mortgages based on when they were bought, according to Zillow:

2003 7%
2004 16%
2005 42%
2006 52%
2007 45%

Las Vegas may look dry, but from the point of view of homeowners, it's deep underwater. Zillow says that buyers in 2006 posted a median downpayment of just 2%, and since then, home values have fallen 25 percent year-over-year, so 89.9% of homeowners now owe more than their home is worth.

Stockton, Calif., is worse: 95.8%. No wonder it's known (unofficially of course) as the Foreclosure Capital of the U.S.A.

Check out what these other blogs are saying about the Zillow report:
Housing Prices-Housing Bubble, Zillow's in-house blog, and the blog at Active Rain by Zillow exec Spencer Rascoff.

If you only focused on the big headlines in the past week, you probably noticed that home resales were down by two percent nationwide during March. That didn't sound good -- certainly not for the start of the spring selling season.
But when you take a closer look at last week's numbers, you find that resales were actually UP in large parts of the country -- sales in the Northeast states, for example, jumped by 2.3 percent, and in the Western states they were up by 2.2 percent. The national numbers that dominated the press were dragged down by a 6.5 percent drop in resales mainly in one part of the country -- the Midwestern states, where economic and employment problems continue to be tough.
Another market niche that did surprisingly well but got little attention: Condominiums, which saw a 3.6 percent jump in sales. That was on top of a 3.7 percent increase the month before.
Then there was the surprise of all surprises -- again, with little public attention: Home prices. The Office of Federal Housing Enterprise Oversight -- the government agency that tracks price movements in a giant portfolio of millions of homes financed and refinanced by Fannie Mae and Freddie Mac -- reported a six tenths of a percent GAIN in average home values.
On top of that, the National Association of Realtors reported the median price of home sales in March rose to $200,700 -- that was up from a revised $195,600 in February. There were significant increases in median prices in a number of metropolitan areas, including Austin, Texas, Des Moines, Iowa, and Durham, North Carolina.
Mortgage money at affordable rates clearly helped power some of those sales and modest gains in prices. Thirty-year fixed-rate mortgages averaged 6.04 percent last week, according to the Mortgage Bankers Association of America, and 15-year money averaged 5.6 percent.
What's the takeaway here? Have we turned the corner and seen the end of the correction phase of the cycle? No, we're not making that call quite yet.
The 10-month unsold inventory is still a leaden weight -- and there are still some downward price adjustments ahead in the local markets that were driven by speculators during the boom years.
But the fact is: In many areas, and in some product niches like condominiums, the national headlines do not describe the local or regional realities. Thanks to lower prices and affordable mortgage rates, sales in those areas are up, not down.
Buyers see real opportunities and are writing contracts. And smart sellers are closing sales.
Source: Realty Times

Talk about jumping from the frying pan into the fire. Or bad timing. Or something. Today, Fannie Mae announced that it lost over $2 billion in the first quarter and is going to cut its dividend and raise $6 billion in fresh capital. The stock fell.

As a taxpayer, I'm happy that Fannie Mae (and Freddie Mac) are raising capital. That will enable them to buy more mortgages and keep the housing market from dying on the vine. At the same time, a thicker capital cushion will reduce the risk that Fan and Fred will require a taxpayer-financed bailout.

In fact, I think Fannie and Freddie should raise even more money from the private markets. The reason they don't, of course, is that selling new shares dilutes the current shareholders, meaning lower earnings per share and thus a lower stock price. Here's Felix Salmon's take at Portfolio.com.

Let's hope that Doug Duncan didn't take most of his pay in the form of Fannie Mae stock options.

There was an interesting article in today’s San Jose Mercury News talking about the latest census data and California’s demographics. White middle-class residents are leaving the state. The Hispanic population is still growing but at a much lower slower rate than Texas. The reason: the high cost of living and better job prospects elsewhere. The housing bust could reverse the trend.

The article goes on to note another trend that of Baby Boomers selling their California homes when they retire, taking their fat profits and moving elsewhere, choosing to live their Golden Years some place other than the Golden State.

My wife and I took a little trip down the California coast last weekend. We visited a bunch of towns just north of San Diego and as usual, checked out the local home prices. While housing prices in inland communities are getting hammered, there were no bargains to be found at the beach. If you want to live some place nice with a view of the ocean such as Del Mar or Encinitas you’re going to pay a couple of million for it.

Middle class retirees may sell their McMansion and move some place cheaper but lots of well to do Boomers will stay pay up for property on the ocean. You may have heard of the retiree who was killed by a Great White Shark last week swimming off of Solana Beach. I still saw surfers and kayakers in the water despite the shark warnings. There’s something about the lure of the ocean.

Sapna Aiyer, a Houston legal aid attorney, told the Chronicle that new owners in Texas aren't required to continue leases that previous owners signed. Even tenants who are up-to-date on payments can be given just 30-days written notice to vacate.

Real property transfer taxes fell 12.7% and mortgage recording tax collections dropped 20.1%, Reuters reported. The New York City, which has already lost jobs on Wall Street in the wake of the subprime crisis, could lose another 36,000 jobs, the city's labor department reported last week.

I'm guessing that the execs at KB Home aren't real happy with Eli Broad, because who's going to buy a house now if they think that Broad is right about where prices are heading? I don't know how many shares of KB Home that Broad himself still owns, but it can't be too many because he doesn't appear on the list of holders of 5% or more of KB Home shares in the latest SEC filing.

^^^^^^^

Trivia: KB Home was founded in 1957 in Detroit as Kaufman & Broad Building Company

To put it in perspective, 35,329 single-family home permits were issued in california during the 1st quarter of 2005.

These days building new homes makes little sense with so many foreclosed homes competing for buyers. Builders are waiting for the market to turn around, said Alan Nevin, the builder group’s Chief Economist.

“It basically is a case where builders have more or less decided not to build," Nevin said. "They are almost viewing this as being custom home builders to the extent that they almost won’t start a new home until somebody has bought it.”

It depends on where you live. In Nevada, the odds of losing a home to foreclosure could soon be about the same as getting the flu if predictions in a new Pew Charitable Trusts report come true.

One in 11 Nevadans will be in foreclosure within the next two years as a result of subprime loans made in 2005 and 2006, Pew Charitable Trusts predicts in "Defaulting on a Dream: States Respond to America's Foreclosure Crisis." (The chances of catching the flu in a given year is about 1 in 10, according to the San Diego Union Tribune.)

Nationally, the group predicts that one in 33 current homeowners will be in foreclosure within two years. Go to page 10 of the report to see what the foreclosure odds are in your state.