Merced ground zero in housing crunch and housing greed

A full 85 percent of homes in Merced County, Calif., have negative equity.

Result? Many homeowners who would like to sell are being told to not even bother unless they list their homes at the foreclosure price.

It’s a more extreme version of what could shake out in a number of metropolitan areas in the next few years.

At the same time, let’s not feel too sorry. Per details of the story, many Merced homebuyers were engaged in spec buying, and bought too late in the cycle, or too far down the Ponzi chain.

And, not all were locals; as many as one-quarter were outside the area.

Beyond that, Cal-Merced flopped, as anybody could have told, with UC-Davis relatively nearby, or Sac State just up the road, too.

That said, caveat emptor. I don’t feel sorry for spec buyers.