So you bought a home with the idea of it being a nice place for you and family to live. And then home values went south way below what the balance was on your mortgage. In some parts of the country, we hit a point where the number of homes with mortgages underwater was close to 70%!
Today? Significant and continuing improvement in the housing market has a much smaller percent of people underwater. The best news is that in very few markets are there still large numbers of homes like this. Three in particular have cited by Zillow: Las Vegas (25% negative equity), Chicago (22% negative equity) and Atlanta (21% negative equity).
And those numbers are dramatic improvement from where they were! Meanwhile, there is a market subset — condos — having trouble with 19% of condo owners having negative equity, but even that’s improved too from where it was.
Good news for anyone who was houselocked
I had a friend who bought a condo at good price before values collapsed. Then when everything collapsed, there was a foreclosure 2 doors down from her that was worth only a third of what my friend’s mortgage was. At one point, she was upside down 6 figures! But recently, she was able to sell that condo and make a profit. Things totally roundtripped, and came back up … and now she’s out.
More and more markets are healing. The first wave of recovery happened in the highest income zip codes and has steadily moved through other sectors. Now we’re seeing recovery at all levels. The recovery not complete, but it’s mostly done.
This is great news for those who were houselocked. The ability to enter the housing market as sellers and then later as buyers is the best it’s been probably in 8 years and it’s only going to be better in 2016.