Despite what you might hear on the “news” that home sales are up in some areas, the reality is that it is so far from the truth! This is still a very difficult real estate market.
Yes, sales may be UP from one month to the next across that country…but what you have to realize is that these are NOT normal sales. The increase in the number of sales is caused by the LOW property values that is a product of foreclosures and short sales. Are home owners making a profit on their “American Dream” investment? Very few are!
It is still a “Buyers Market” and it will continue to be for several more years throughout the majority of the US.
Nationwide, about one in four residential mortgages are now “underwater”…meaning borrowers owe MORE than their homes are worth. The states that were hit hardest by the housing bubble include California, Nevada, Arizona and Florida…these states have seen the largest property declines…and it is expected that values will still continue the downward trend right though 2010 and into the first quarter of 2011.
When is the Rebound Coming?
Nevada…70% Underwater…2033 Recovery Year
New York…6% Underwater…2016 Recovery Year
N. Dakota…8% Underwater…2013
(source: Moody’s Economy. com)
As you can see from the chart above, the out look for some states…is not so good…it’s going to take many YEARS to climb out of this housing recession!
Moody’s Economy. com projects that prices in 61% of metro areas will return to recent peak levels by 2015. If you live in one of the harder hit areas…which may take 20 years to rebound…and you are more than 25% underwater, your property will not be a financial asset any time soon.
The reality is that home ownership must be looked at as just that…a home, housing, a place to dwell and have protection and comfort from the outside…and NOT as a PIGGY BANK!
Buying a home is still a good investment…and over time…SHOULD go up in value…but this is a “New Economy” and though the reality of our house values is painful today…it is what it is!