One-Third of California Homeowners Locked Out of Market
DSNews cites PropertyRadar, August 20, 2013. "The California real estate market continued to experience rising home prices and strong sales in July, but negative equity still remains a significant challenge", according to a report from PropertyRadar.
Out of the 6.8 million California homeowners with a mortgage, 26 percent, or 1.8 million, were underwater as of July.
Another 500,000 are barely managing to stay above water, with no more than 10 percent of equity in their home. When factoring in closing costs for these homeowners, they would still “effectively” be underwater, according to PropertyRadar.
This means about one third, or 2.3 million homeowners, are still unable to sell due to lack of equity.
Even though millions of California homeowners are unable to sell, sales for single-family homes and condominiums saw monthly and yearly increases of 12.1 percent and 12.9 percent, respectively.
“With the exception of the temporary bounce in July 2009 sales from the First-Time Homebuyer Tax Credit, July 2013 sales were the highest since July 2006,” noted Madeline Schnapp, director of economic research for PropertyRadar."
