America’s Housing Market Is Underwater?
If you are among the 1/3 of American homeowners whose house is upside down, meaning it is worth less than what you owe on the home, you are probably scanning the internet and tuning in for any news indicating that the housing market will soon be improving. Currently, 29% of all American homes are upside down, which comes out to be 14.7 million homeowners, and 700 billion U.S. dollars. As you can see, the problem is widespread and involves a lot of capital. There are many places in the U.S. that have been hit harder than others. Nevada for example has 60% of homes underwater, Arizona has 49% and Florida 45%. Housing prices are currently down 33% from what they were at in their prime. If you’re like many Americans you’re probably wondering if and when the housing market will improve?
The Housing Market Is No Longer A Good Investment Choice
Years ago, there was an ideal in the U.S. that buying a home was like securing an investment for the future. “As much house as you can afford” was the motto, and most Americans believed that their home would one day pay them back like an investment during their retirement years. The recent turn of events in the housing market has dashed that dream for most Americans. Housing is not what it was even a couple years ago, and there is no sign that it will turn around anytime in the near future. Frankly there is just a huge disparity between supply and demand. In a good economy there is usually 6 months worth of houses on the market waiting to sell. Currently, there is 14 months worth of houses on the market. Construction and new houses are down 75% and still the houses aren’t flipping on the market.
Housing Market Has Not Yet Reached The Bottom
Although many of us are optimistic for a better housing market, the fact of the matter is it will probably not turn around very quickly. October showed a better month for house sales, yet the banks also backed off on pursing delinquent borrowers, which slowed the number of foreclosures. Currently, it is projected that housing prices will drop another 8% in 2013 as more foreclosures move forward.
What Are My Options If I Am Upside Down On My House?
Barry Bosworth an economist at the Brookings Institution referred to those who are underwater on their mortgages as “the most desperate population in the country today.” Very few options exist when you are upside down on your home. Those options include:
-continuing to make payments and hoping for the best
-accepting a short sale on the home
-walking away from your home and allowing your credit to be destroyed
None of these options are ideal, and if you are one of many Americans who are in this situation I would urge you to speak to a redhawk advisor near you today, to discuss your own options in light of your personal financial situation.