With home values falling dramatically
from 2006 boom prices, many homeowners have found themselves in what is called
a ‘negative equity’ or ‘underwater’ situation. This means the value of their
home is currently less than the mortgage amount on that home.
Many of these homeowners have been
‘locked’ into their houses because they were unable to sell it without bringing
cash to the closing table. The good news is this situation is improving as
prices begin to rise.
We are not saying that this challenge
is over. We just have to look at what the experts are saying to realize we
still have a long way to go.
Zillow Chief Economist Dr. Stan Humphries recently stated:
“Negative equity is
still very high, and millions of homeowners have a very long way to go to get
back above water, even with current robust levels of home value appreciation in
most areas. As a result, negative equity will remain a major factor in the market
for the foreseeable future.”
Anand Nallathambi, CEO of CoreLogic,
in their latest Negative Equity Report:
“With nearly one
quarter of borrowers still underwater we have a long way to go.”
However, the situation is improving.
The recent Zillow Negative Equity Report revealed:
- Negative equity continued to fall
in the fourth quarter of 2012, dropping to 27.5 percent of all homeowners
with a mortgage, compared with 31.1 percent one year ago.
- Almost 2 million American
homeowners were freed from negative equity over the course of the year.
- Approximately 13.8 million
homeowners with a mortgage were in negative equity, or “underwater,” at
the end of the fourth quarter, owing more on their mortgages than their
homes are worth. That was down from 15.7 million in the fourth quarter of
2011.
What
does the future hold?
Anand Nallathambi, president and CEO of
CoreLogic, sees the situation improving:
“As we look ahead
into 2013, we expect to continue to see more borrowers’ escape the negative
equity trap and that will be a strong positive for the housing market
specifically and the broader economy generally.”
Zillow Chief Economist Dr. Stan Humphries agrees:
“As home values
continue to rise and more homeowners are pulled out of negative equity in 2013,
the positive effects on the housing market will be numerous. Freed from
negative equity, homeowners will have more flexibility, and some will likely
choose to list their home for sale, helping to ease inventory constraints and
moderating sometimes dramatic, demand-driven price increases in some markets.”
Negative equity is still a challenge to
a full housing recovery in this country. However, things will continue to
improve as prices appreciate.
MacIntyre & Cowen, Short Sale Specialists, RE/MAX
Real Estate Professionals Grand River, can help you navigate this process and
get your home sold. With the extension
of the Mortgage Debt Relief Act until the end of 2013, now is the time to act
if you are underwater in your home. We
would gladly provide a complimentary Over-the-Net Home Evaluation or email
alerts to Hot Buys / Foreclosed / Liquidation & Luxury Distressed
Properties in the Mid Michigan areas including Greater Lansing, Haslett,
Okemos, East Lansing, Grand Ledge, Holt, Williamston, Mason, Eaton Rapids, Dimondale,
Dewitt areas and more. Feel free to
contact us at 517.999.2675 or visit us at www.pmachomes.com today!
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