Underwater Homeowners Worried About Dropping Home Prices

By
Real Estate Agent with The Palm Beach Group

Bad news concerning the housing market is certainly everywhere.

For starters, a report from S&P/Case-Shiller showed home prices declining by 4.2 percent during the first quarter of 2011. High unemployment rate is also driving more homes into foreclosure while job growth remains tepid. The number of foreclosure properties is at 2.25 million and at least 1.8 million homes are on the verge of foreclosure.

 

There is good news from time to time. Mortgage rates may be low but some people choose to rent because they cannot afford a home while others are just waiting for things to get better. Unfortunately, even the federal government is saying it could take another 2 to 3 years before everything stabilizes.

In the middle of all these problems are the underwater homeowners. Clearly, this group of homeowners is trapped in a situation in which one wrong move could be the end. Most of them have to choose between two options.

The first option is to wait out the storm. This is only advisable if you are expecting your financial situation to improve. If not, you are simply just waiting for the time when you can no longer afford to pay your mortgage because of one reason or another and your lender forecloses.

The second option is to pick up the phone and talk with a short sale Realtor. A short sale can offer you the following: sell your home to settle your mortgage debt and avoid a foreclosure entry on your credit record.

Choosing the second option is actually the easiest thing underwater homeowners can do. What happens next would involve several months of waiting until the short sale proposal is approved. It could still go either way but at least you tried.

Of course, you should know your chances of surviving this particular mortgage problem if you have a professional Realtor by your side who will not only hold your hand through the worst, but also guide you toward the other side.

Comments (4)

Karen Anne Stone
New Home Hunters of Fort Worth and Tarrant County - Fort Worth, TX
Fort Worth Real Estate

I know it is really frustrating, but in some cities throughout the countries... if they want to sell, they have to be better than competitve.

But... once again this blankety-blank Case/Shiller baloney they they, and you in your post, continue to blanket the country with... makes it sound like every market is dropping in value. 

There are so many markets where this is not true... yet that Good News... gets no mention.  As you can tell, all this blanket negativity really ticks me off.

Jun 09, 2011 04:50 PM
Scott Silverstone
William Raveis Real Estate - New Haven, CT
www.CTProperty.com, Connecticut Luxury & Waterfront Realty

Homeowners should also consult with their banks.  There may be options for them to change the amount or frequency of their payments.

Jun 09, 2011 04:56 PM
Chuck Carstensen
RE/MAX Results - Elk River, MN
Minnesota/Wisconsin Real Estate Expert

There are a lot of people who dont know the short sale is a good option.

Jun 09, 2011 05:02 PM
Karen Anne Stone
New Home Hunters of Fort Worth and Tarrant County - Fort Worth, TX
Fort Worth Real Estate

Chuck, I had three short sale listings in the last quarter of 2009... and none since, here in the Greater Fort Worth market.

Jun 09, 2011 05:27 PM