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Hi Everyone... Frank Verni here and welcome to another edition of Real Estate Help by Frank
Did you know that after several years of the
housing crisis more than three million U.S. borrowers have risen above water on their
mortgages so far this year? This is due to the fact that home prices have
increased quickly over the last 18 months and it's been a welcome relief for many.
The negative home equity rate also fell in the second quarter of this year, the fifth
straight quarterly drop... but it is still way too high and continues to hamper the housing recovery.
Currently, almost 24 % of homeowners with
a mortgage, or approximately 12.5 million, still owe more on their homes than they are
worth. Now this is down from 15.3 million one year ago.
Some folks, however, are still so far underwater that even with the rising prices it will take
years for them to see any home equity. Nationwide, more than half of all underwater
borrowers are still in the red by 30% or more, and roughly one in seven owes more than twice
what their home is worth. Markets with the highest percentage of underwater
borrowers nationally include Las Vegas, Atlanta, and Orlando. Several California cities including
the Sacramento region are also on this list. As I said earlier for those who are deeply
underwater there is still a long way to go. One of the only ways that these homeowners
can sell their homes is through a short sale. It is the only way that they can move forward
and luckily, the banks have made this process much easier to get done.
This negative equity is one of the reasons behind the small inventory of homes for sale
on the market and ironically it's also this low inventory that has been pushing home prices higher.
However, the rising mortgage rates and decreasing
affordability because of the increasing prices is starting to see the price appreciation
slow down. We are now seeing that the inventory of homes
for sale as well as the time on the market for listed properties is definitely increasing
as more people are being priced out of the market and investors move elsewhere.
Some good news is that the recent move by the Federal Reserve to continue their monthly
bond buying program has caused mortgage rates to come down about a ½% in the last few days...
so if you're thinking of buying or selling - now might just be the right time to move
forward and may be your last chance to take advantage of the opportunities that exist.
The reason I say this this is because economists predict that an additional 1.9 million borrowers
will probably be back in the black on their mortgages by this time next year and that
will put more homes for sale. Based on all of this and as long as the economy
continues to grow and more jobs become available, I expect that the market will continue to
see positive movement going forward although at a much slower pace and things will begin
to stabilize over the next few months. Now if you or someone you know are considering
selling, buying, or could use some help in any real estate matter, contact me Frank Verni
and I'd be happy to answer any questions and help in any way I can.
If you found this interesting, please like it and share or forward to someone that can
use it. I'd also appreciate any comments below or subscribe for further updates.
I'll see you again soon! Thanks and Good Luck.