And a recent Hook story on the drastic decline in midsummer home sales also tried to reassure readers with the same comparison.
But this is cold comfort: there are many more homeowners in trouble due to Negative Equity.
Virginia is #8 on the national list for mortgage holders owing more than the house is worth. Nearly 30% of Virginians are in this dire predicament.
Those who bought 2004-2010 in this area are now "Underwater," since homes are now selling for much less (Here's the City as an example of dropping prices.).
Of the 1.3 million homeowners in the Virginia with mortgages, almost 305,000 owe more than the house is worth. Nearly 80,000 are within 5% of being underwater. On a $300k mortgage, that's $15k--and wipes out 4 years of mortgage payments.
WHAT ARE THE ISSUES WITH NEGATIVE EQUITY?
- It leads to more "Short Sales "--where bank agrees to take less than what is owed (a big hit to credit score)
- It will lead to higher foreclosure rates in 2012 and 2013--especially for those at the $600+k price points, where there is a local glut of unsold inventory (a big hit to credit score)
- If owner *does* sell w/out bank intervention, it involves a significant loss of $$$, often brought to Closing
- It is difficult or impossible to ReFi
- It prevents "Move Up"--going to a larger house to accomodate growing family (or, conversely, downsizing)
- It may inhibit job mobility
- It leads to "Accidental Landlords"
- It reduces consumer spending power--no home equity line of credit
- It prevents big plans--like redoing the house or financing a college education
The Top 14 States With Negative Equity