HARRIS REAL ESTATE UNIVERSITY 2012 Housing Report | 50% Of ALL Owners Underwater

Education & Training with Tim & Julie Harris® Real Estate Coaching

Its a fact that this housing crash is now officially worse than even the Great Depression.

Few facts:

* Nevada has the highest share of underwater borrowers, but just over 300,000.
* In total 11,000,000 Homeowners (loan owners) are underwater.
* Estimates are that up to 50% of ALL HOMEOWNERS (with a mortgage) are now underwater.

Consider the following from mortgage analyst Mark Hanson:

On US totals, if you figure average house prices use conforming loan balances, then a repeat buyer has to have roughly 10 percent down to buy in addition to the 6 percent Realtor fee to sell. Thus, the effective negative equity target would be 85%. You also have to factor in secondary financing, which most measures leave out.

Based on that, over 50 percent of all mortgaged households in the US are effectively underwater — unable to sell for enough to pay a Realtor and put a down payment on a new purchase without coming out of pocket. Because repeat buyers have always carried the market as the foundation, this is why demand has not come back. It’s as if half the potential buyers in America died over a two-year period of time.

It should be absolutely clear to everyone that Short Sales are the solution for homeowners who want to avoid foreclosure. Its a very safe bet that 2012 will be a huge year for agents who are true short sale experts.

WARNING: Short Sales – love em or hate em, they’re here to stay! Go beyond the basic short sale designation. Watch the FREE Short Sale video and download the FREE Short Sale training guide.NOTICE: Free book guaranteed for first 100 agents only.

Watch video: From CNBC’s Diana Olick on underwater mortgages.

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David Shamansky
US Mortgages - David Shamansky - Highlands Ranch, CO
Creative, Aggressive & 560 FICO - OK, Colorado Mtg

This will pass but no doubt still a lingering issue that has not completed it cycle yet and a good post to consider when thinking of selling.

Nov 13, 2011 08:42 AM #1
Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

Clearly many sellers have since lost all of their original equity(down payment) and are upside down LTV-wise .

Nov 28, 2011 08:04 AM #2
Tim and Julie Harris
Tim & Julie Harris® Real Estate Coaching - Las Vegas, NV

50% of all owners (with a mortgage) are now underwater when you factor in the traditional transactional fees....

...2012 will not see any meaningful improvement for housing.

Think about all the expired listings in your market that can only be sold as a short sale (assuming they want to avoid a foreclosure). Huge opportunity to help owners and build your listing inventory for Spring 2012. 

Happy Holidays!


Nov 28, 2011 08:11 AM #3
Joe Jackson
Keller Williams Capital Partners Realty - Columbus, OH
Clintonville and Central Ohio Real Estate Expert

Thanks for sharing this good information!

Dec 10, 2011 02:39 AM #4
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