Friday, December 4, 2015

This Week in Real Estate 12-4-2015 Negative Equity still a Problem

Property Tax bills

If you don’t want to pay a 10% penalty on your property tax bill make sure you have your payment to the county by December 10th. PLEASE DO NOT MAIL it is not the post mark date. It needs to be received by the county by December 10, 2015.

Negative Equity still a problem.

I read this great article from CNBC regarding the negative equity effects still in our marketplace.

As a nation nearly two thirds of all homes have a mortgage. In California the figure is slightly higher with a little over 70%.

On average 10% of homes with mortgages (7% overall) in the bay area are underwater or have negative equity. The problem with the negative equity is that it creates a shortage of homes for sale. If you can’t sell at a profit, as a homeowner, you are stuck.

The recent study found that the majority of homes with negative equity are the less expensive homes that are below the median price for the area. Often these homes are the entry-level or starter homes.

Also the number of repeat buyers has dropped dramatically in the last decade, owing to negative equity, but when combined with tighter underwriting standards, the options for these buyers is even worse. Lenders today require higher levels of income compared to debt, and Americans in mid-tier FICO credit ranges have had increasing difficulty qualifying for loans.

While the market is much stronger and a key part of the growth of the overall economy, the prediction is that it may be 3-4 years before the “negative equity” effect is behind us.

-Kris

Toys for Tots Client appreciation party recap

I wanted to thank everyone who came out last night. We had a blast and were able to give over 200 toys to Toys for Tots.

THANK YOU.


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