March 25, 2014
We always try to focus on regional real estate news that is more relevant to DC homebuyers and homeowners, but here’s a Feel Good story at the national level.
Millions and millions of American homeowners’ equity holdings (the market value of their homes minus the amount of money still owed) soared by nearly $2.1 trillion nationwide to a total of $10 trillion.
“It can be hard to grasp large numbers like this that come from national statistics,” said Gerard DiRuggiero, Principal Broker at UrbanLand Company. “Housing prices in DC have risen substantially in the past year, and homeowners’ equity has also increased as they’ve made their monthly mortgage payments. In times of rising housing values, your level of equity can increase quite a bit.”
There was a time not too long ago where national news told a different story. Gone are reports of homeowners being ‘underwater’ on their homes and the words ‘negative equity’ do not show up in real estate news as often. A great deal of distressed properties, foreclosures and short sales have been cleaned out of the market as a whole.
“Negative equity simply sucks the life out of the real estate market, and out of people’s enthusiasm in general,” continued Gerard. “You’ve got people putting their life savings into their homes, and values dropped, and they are affected emotionally by it. You’re literally trapped in your home, can’t refinance without cash to pay down the mortgage, and buyers who are facing the same personal situation can’t buy your home, either.”
So, it’s big news and relevant to us here in DC when over 4 million American homeowners are estimated to now be out of negative equity and into positive territory with their homes again. “Real estate values, like everything else, follow a cycle. This last cycle took about 7 years, from when the markets first began to tumble, to today,” said DiRuggiero. “While there are still lots of homeowners facing financial problems, this type of announcement really does show some sunshine as Spring approaches.”
*shared from UrbanLand website*