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Many Florida homes still “seriously underwater”

Many Florida homes still “seriously underwater”

The fallout from the housing collapse of 2007 continues to be felt in many real estate markets, including those in Florida. The collapse drove millions of properties “underwater” where the balance on the mortgage loan exceeded the potential sale price of the property. This left millions of homeowners in a situation where they could no longer sell their property without being saddled with a substantial deficiency balance.

Many also were faced with other economic fallout, including fewer hours at work or outright job loss, as the collapse of the housing market and the related banking crisis drove the economy into the deepest recession since the Great Depression. Short sales and foreclosure loomed for many.

As the economy slowly recovers, some homeowners have seen their home values begin to creep upwards. The process has been slow, and RealtyTrac, which follows home prices, suggests that the growth may become even slower.

Prices have risen due to limited inventories in some markets, but increasing prices will bring more homes to market, which in turn, relives some of the upward pressure on prices.

Unfortunately, underwater homes remain a problem in Florida, with 31 percent still seriously underwater. The real estate market is very local, however, and your neighborhood can vary significantly from the statewide average.

Questions relating to whether a short sale makes the most economic sense (or cents) can be complex. Speaking with a real estate attorney or financial professional can enable you to understand your options and the costs associated with each.

Source: NBC News, “Sluggish Home Prices Leave Millions Underwater,” John W. Schoen, April 25, 2014

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