Skip to: Content
Skip to: Site Navigation
Skip to: Search

The Circle Bastiat

Beverly Hills goes vacant

The 90210 crowd are abandoning their underwater mansions in increasing numbers. Is this a bad sign for the rest of the country?

By Douglas FrenchGuest blogger / February 26, 2012

A view of a multi-million dollar home in foreclosure on Rexford Drive in Beverly Hills, California. Some 180 houses in the 90210 zip code have been foreclosed on by lenders, scheduled for auction, or have been served with a default notice, the highest level since the 2008 financial crash.

Jonathan Alcorn/Reuters/File


Reuters reports that more of the Beverly Hills crowd are walking away from their underwater mansions.

Skip to next paragraph

This is the institutional blog of the Ludwig von Mises Institute and many of its affiliated writers and scholars commenting on economic affairs of the day.

Recent posts

Despite most of the mortgages in this tony zip code exceeding $1 million, buyers are walking, not because they have to, but because it makes financial sense.

“It’s a business decision, not an emotional one which it is for normal people,” said Deborah Bremner, owner of the Bremner Group at Coldwell Banker, which specializes in high-end properties in the Los Angeles area. “I go to cocktail parties and all people are talking about is whether it is time to walk away, although they will never be quoted in the real world.”

California is a non-recourse state. So, handing the keys to the lender means “Tha-Tha-Tha-That’s All Folks” as lenders cannot pursue borrowers for deficiencies (the shortfall between what is owed and what the house brings at the foreclosure auction).

Those with jumbo loans are more likely to strategically default. ”Now that these homeowners with jumbo loans are finding out you can do this, more and more are doing strategic foreclosures,“ says Jon Maddux the CEO of Foreclosures on jumbo loans have increased 579% since 2008, greater than any other form of loan, according to a report by Lender Processing Services, Inc.

Tim Reid writes that a “huge ‘shadow inventory’ is building of elite homes that are in default but have not been put on the market,” as lenders have only put 12 homes up for sale of the 180 total distressed properties in Beverly Hills.

As the saying goes, “So goes California, so goes the nation.”

The Christian Science Monitor has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. To add or view a comment on a guest blog, please go to the blogger's own site by clicking on

  • Weekly review of global news and ideas
  • Balanced, insightful and trustworthy
  • Subscribe in print or digital

Special Offer


Doing Good


What happens when ordinary people decide to pay it forward? Extraordinary change...

Danny Bent poses at the starting line of the Boston Marathon in Hopkinton, Mass.

After the Boston Marathon bombings, Danny Bent took on a cross-country challenge

The athlete-adventurer co-founded a relay run called One Run for Boston that started in Los Angeles and ended at the marathon finish line to raise funds for victims.

Become a fan! Follow us! Google+ YouTube See our feeds!