If you're a BUYER, research carefully to avoid being underwater in 2012. Many who purchased with the 2010 Homebuyer Tax Cred are now underwater. Just a small drop in price can quickly drag a home underwater when you factor in interest, and consider the upfront agent fees and closing costs.
In this area, nearly 30% of mortgage holders are at or near negative equity. Virginia had a mighty big bubble, which is still deflating. As Realtor @JimDuncan said, We're not at bottom.
SELLERS can act accordingly by underpricing the competition--if they have equity. Gary Shilling's advice: "Sell Your House YESTERDAY."
A prediction for a 2012 bottom seems a little bit optimistic, especially given the latest economic news (see links, below).
ZILLOW's report maps the carnage in Q1 2011:
- First Quarter Home Value Declines Match Worst of Housing Recession
- Home Values Show Sharpest Quarterly Decline Since 2008
- Negative Equity Rises to 28.4%
- U.S. home values posted their largest quarter-over-quarter decline since Q42008, falling 3 percent.
- Home values have fallen 29.5 percent from their peak in June 2006.
- Negative equity reached a new high with 28.4 percent of all single-family homes with mortgages underwater, up from 27 percent in Q4 2010, due to accelerating home value declines.
- 57 Months of Price Declines
The bad economic news has piled on thick in the past 10 days:
- The Case-Shiller Index and Clear Capital have already declared US home prices to be in Double Dip.
- A new study shows the long-term return on investment of buying a house to be zero.
- Unemployment just bumped up to 9% / 15.6%.
- First Quarter 2011 Economic Growth Slowed to 1.8%.
WSJ video recapping Zillow's Q1 2011 report: