Can South Floridians unlock the value in their homes?
Here’s my question: Are we headed for House Lock in South Florida?
This would be a situation in which someone cannot possibly sell their home because the borrower owes so much more than the home is now worth. The homeowner bought at the peak of the real estate market or, the borrower loaded so much home equity debt onto the house that they can’t pay it all off at today’s low home prices.
How many years will it be before these borrowers can sell and get back to even?
A few? A dozen? A decade?
I stole the idea for this expression from “Job Lock,” a situation in which one could not leave one’s job because health insurance wasn’t portable – couldn’t be carried over to the next job. The person may have developed an illness and now would be considered uninsurable at a new employer. A change in federal law solved that one.
I don’t foresee the change that will resolve this one.
My colleague Paul Owers reported today that Zillow says 47 percent of South Florida borrowers are “underwater,” meaning they owe more than the property’s worth.
So does that mean half our homes can’t be sold right now, without injuring the owners?
Sounds like a lock to me.
Harriet Johnson Brackey, the personal finance columnist for the Sun Sentinel, is an award-winning business reporter. Her columns for 2008 were named "The Best in the Business," a national award chosen by her colleagues at the Society of American Business Editors and Writers.
Comments
Yes - it's a 'houselock'. Has been for quite some time, and the declining prices will continue to push people out of the possibility of selling. As a real estate salesperson in Broward, I've been advising customers & prospective sellers for a couple years now that they need to sell at market price now, or wait 10 years. You wouldn't believe how many didn't listen & will never be able to make that move they needed or desired. So many people rented their home hoping after a year the market would have improved - only to find their equity disappeared, being a landlord stinks, and the taxes go up without a homestead exemption.
There are still more people who hope, without any reasonable justification, that the market will be better next year - like the prices will all of a sudden double? We still have 24,000 homes to sell off with more short sales & foreclosures hitting the market everyday.
I wish I could have saved more people from this situation - at least there were those who listened & got out while they could.
Posted by: fumom | August 11, 2009 1:37 PM
Sure I can afford to sell my house.
It will be cashed out in one more year.
I've been making double payments on a 15-year mortgage and will have it cashed out in a total of 7 years, saving around $45,000.00 in interest I WOULD have paid throughout the entire 15 year period..
Posted by: Pudbert_Savannah GA | August 11, 2009 4:02 PM
15-year mortgage and will have it cashed out in a total of 7 years
what an idiot... could you sell in 10 v. payoff in 7...
poster doesn't say how much value lost...
the point of the post was... how much value lost... is the underlying... payoff only means ability to pay down the debt... so what... if you paid cash in full tomorrow...
Posted by: suidd | August 11, 2009 8:55 PM
Pay off your home. The value is falling faster than you can pay it off. Once you pay it off, forget trying to get money out.
If they want to fix the Fla Real Estate market its simple, first dump SOH, and get the banks/Fannie or Freddie / and the PMI companies to start lending on Second homes in Fl.
I dont see to many buyers paying cash even at these prices.
My house went from a value of 425,000 in Dec 08 to 275,000 on August 2, 09. Why, banks dumping foreclosures on 15 day sales.
Posted by: Brian | August 12, 2009 11:45 AM
Bought it in December 2007 brand new with huge walk-in closets, granite counter tops, etc,,, for around $220k and judging by the selling prices in our neighborhood right now, I could easily get around $275k.. probably more.....
And that's REAL conservative $$..
I didn't buy at the inflated prices that you idiots did..
But I don't plan on selling it, I LOVE Savannah, GA..
Especially since I escaped OrlandoRICO 7 years ago before the skank took over.
I'm planning on buying something nice for a 2nd home on Merritt Island with canal and ocean access in about a year or so,,
after KSC tanks and houses can be bought for a nickle on the dollar from Titusville to M.I.
Posted by: Pudbert_Savannah GA | August 12, 2009 1:47 PM
How can you stand the smell of the papermill plants in Savannah? Do you get used to it?
Posted by: mark | August 12, 2009 3:10 PM
I'm just waiting for real estate values to bottom out...or at least hit the price range it should be.
Then I will look into picking up a few acres with a nice house that some idiot bought WAY beyond his means....get it for the real value rather than the overinflated value of the last 10 years
Posted by: I Say | August 20, 2009 6:42 AM