Where are we nationally with distressed properties? Here in the Carolinas, it feels like the inventories have dropped dramatically.
From July 2012 to July 2013, distressed properties fell 32 percent nationally, according to CoreLogic. In July, 949,000 homes were in some stage of short sale or foreclosures, compared to 1.4 million just a year earlier.
How about homeowners who are still “upside down”? Negative equity means that the homeowner owes more than what they can sell the home for. It is a real measurement of the health of housing in America. It was reported by Zillow that 23.8 percent of all homeowners with a mortgage – 12.2 million in the 2nd quarter – are underwater. The good news is that is down from 13 million properties in the 1st quarter and 15.3 million just a year ago.
Oddly enough, since the homeowners are tied to their properties and cannot sell without bringing dollars to the table, the inventory shortage continues. This, in turn, drives up prices which alleviates the very problem we are addressing – homeowners who are underwater. That’s a very odd curve, but a natural one.
Nationwide, 57 percent of homeowners underwater are under by more than 20 percent; 13.4 percent owe more than double what their home is worth, due to equity line use. These homes will need years for recovery.
Pending sales in the Carolinas remain strong. The first three quarters have remained very steady. The numbers nationally also support a natural recovery. The rise in interest rates, coupled with the shortage of inventory, will continue to bring housing back. Housing will lead the country out of the recession, as it has done historically.
Sales of existing homes appear to be slowing nationally with the seasons, but the Carolinas boast a year-round marketplace. Negative equity improvement levels and a slow rise of interest rates are driving up prices – which ultimately allow more people to achieve their goal of buying or selling a home because they have equity again.
For a current look at real estate in your local market, check out Market Trends. Here you’ll find the latest information about home prices, inventory and trends for your neighborhood or the areas you’re most interested in.