http://jacksonville.com/business/2009-05-06/story/nearly_half_of_jacksonville_homeowners_are_underwater
QuoteMore and more Jacksonville homeowners owed more on their homes than they were worth in the first quarter of 2009, a Seattle firm that compiles and sells real estate data reported Tuesday.
Some 50 percent of Jacksonville metropolitan area houses bought between March 2004 and March 2009 are worth less than the value of their original mortgages, according to Zillow.com.
Owing more than the mortgage is known as "negative equity" or being "underwater."
And of homeowners who bought in the last five years, 69 percent of those who made the purchase in 2006 and 67 percent of those who bought in 2007 are in that predicament.
And it even affects those who haven't bought a house in the last five years, Zillow reported.
In the third quarter of 2008, about 18 percent of all Jacksonville homeowners - whether they'd bought a house in the last five years or not - were underwater on their primary mortgage. Zillow tracks only original mortgages and does not track refinancings or second mortgages.
And in the first quarter of 2009, that number had swollen to 30 percent.
Nationwide, a continuing sag in housing values left roughly the same number - 22 percent - underwater, Zillow reported.
kevin.turner@jacksonville.com, (904) 359-4609
When people were suggesting that I buy a home during the housing boom, my biggest fear was being stuck in a house that I couldn't sell as I do like to move around a bit.
Now, that fear has came true for some and i'm grateful to have dodged the bullet on this one, despite constant peer pressure to be "a grown up" and buy. Paying other people's mortgage can suck at times, but I can't put a price on mobility and not being heavily in debt.
I felt that too many people who were way too young, or not up to that level of commitment, were getting way too caught up in "buy a house, make money" hysteria.
Buying is smart for the long term, I’m not arguing that. Plus if you're not afraid to stay in your home throughout the recession home values will no doubtedly go up, but I think homeownership is a pretty serious thing, and I think some people may have underestimated how serious it is.
Quote from: David on May 06, 2009, 05:25:45 PM
When people were suggesting that I buy a home during the housing boom, my biggest fear was being stuck in a house that I couldn't sell as I do like to move around a bit.
Now, that fear has came true for some and i'm grateful to have dodged the bullet on this one, despite constant peer pressure to be "a grown up" and buy. Paying other people's mortgage can suck at times, but I can't put a price on mobility and not being heavily in debt.
I felt that too many people who were way too young, or not up to that level of commitment, were getting way too caught up in "buy a house, make money" hysteria.
Buying is smart for the long term, I’m not arguing that. Plus if you're not afraid to stay in your home throughout the recession home values will no doubtedly go up, but I think homeownership is a pretty serious thing. I think some people may have underestimated how serious it is.
Your absolutely correct David, home ownership is nice but if your young very overrated. If your young you need to retain your mobility to pursue different options that may arise. Also the whole housing bubble took a lot younger folks by surprise, this isn't the first time housing has deflated, but definitly the most wide spread and severe. The whole flipping thing was incredible, finally talked some sense into my son, he was embarking on buying and selling homes and trying to flip them. Buying rental properties is okay, but have to be in it for the long haul. Buy a house because you want to live in it, if it appreciates good for you, if it doesn't oh well your not sleeping in the rain.
talking about flipping. I was looking at a property a few days ago and fine out the seller does not even own the property. The even funnier part is the seller's asking price is more than twice of the amount he has under contract. When will people learn there is no such thing as "easy money"?
I own rental houses and I own my house. purchased the house in 2000, before the hype. Yes, we purchased rentals with the cheap money from China over the last few years, but now we are waiting for prices to fall back to 2000 levels before buying again. Some say the US is headed for a deflationary period, others say that the amount of US debt will cause the cap gains rates to be wild over the next few years, someone has to pay for the party the chinese threw the last few years for us as we spent their easy money.
We bought a house and are on the verge of selling it for only 25k profit, after being on the market for 6 weeks. Buyers are still out there, but they have more to choose from, so you have to think like the buyers. RE market is still good in Jax, don't kid yourself.
I for one like renting. My husband and I have no children so living in a 2 br apartment fits for us. AC goes, not our problem, oven not working, not our problem. No yard to take care of.
I used to work in the Mortgage industry as a broker and I have a couple of real estate friends so I have a pretty good idea of how the market looks. It's funny because 3rd quarter last year the husband and I were looking at condos on Blanding and Townsend and the sales guy was swearing up and down that the condos were dirt cheap at 120k, that they wouldn't get any cheaper. Looking at the condos I could tell that they weren't gonna be that price for long and I told him so. He said that the market was about to upturn and that we'd be sorry that we didn't buy now. I drove by the other day, 89k.
Long story short, now is the time to buy. If you can get the loan, buy. There are about a years worth of homes on the market, some with big reduction since some people are motivated to sale.
QuoteLooking at the condos I could tell that they weren't gonna be that price for long and I told him so.
Condos are in supply like Candy at Wal-Mart before Halloween, they are everywhere, and banks know it. If you plan to look at a Condo, be prepared to put down 30%, as banks have taken it in the shorts over these things of late.
Definitely a good time to buy if you can afford it and the bank will give you the money!
You're right David about people getting in over their heads. You should always have a 5 year plan if you buy property.
QuoteYou should always have a 5 year plan if you buy property.
Is that the plan that those who purchased in 2004 and 2005, are experiencing, when they purchased during the height of the market? You need longer vision with real estate. Unless you are pricing to flip, you have to ride out the cycles of 10 years or more.
I agree. Five year plan is not enough. Real estate is a business of patience.
Quote from: mtraininjax on May 12, 2009, 12:31:10 AM
QuoteYou should always have a 5 year plan if you buy property.
Is that the plan that those who purchased in 2004 and 2005, are experiencing, when they purchased during the height of the market? You need longer vision with real estate. Unless you are pricing to flip, you have to ride out the cycles of 10 years or more.
It's all relative. Most people who bought at the height of the market also sold a previous property, making a large profit on it. First time buyers who purchased during the boom or buyers that spent the money they made instead of putting it toward their next purchase are the ones most likely under water. Like the above posters said, ride it out and have patience. The market will improve and prices will rise again. It's not worth wrecking your credit if you can hang on.
QuoteMost people who bought at the height of the market also sold a previous property
Are you most people? Most people I know went and purchased a 2nd home with the equity from their 1st. Now they have 2 homes and may be lucky to have a job.
People who have a short sale on their house are better off than those with a foreclosure. A short sale on your house only damages your credit score by 100 points, a foreclosure is 200 and is on the credit score for the same amount of time as a bankruptcy.
With the economic strife we are in now, with no new jobs coming, its going to be hard to see home building start again, especially without financing, until 2011 or 2012. Somethime after that you should see prices rise across the board IF there is enough demand. Some towns may disappear without enough buyers.