Underwater Home Owners Help Lift Home Prices?

Daily Real Estate News | Wednesday, July 18, 2012

Home owners who owe more on their mortgage than their home is currently worth actually may be helping to drive up home prices in certain markets, suggests CoreLogic in its July MarketPulse report.
These underwater home owners, who can’t afford to take a loss on the sales price of their home, are refusing to sell. As such, inventories are shrinking, giving buyers fewer options to choose from and lifting prices, according to the report.
Housing markets that are seeing some of the highest appreciation are also in states that have some of the highest number of underwater homes, according to CoreLogic.
"Negative equity is keeping many potential sellers out of the market, which keeps a lid on inventory and combined with the reduced flow of REO properties has led to much tighter market conditions for lower priced properties, particularly in the hardest hit markets," according to CoreLogic in its report.
Source: “CoreLogic: Negative Equity Pushes Prices up in Certain Markets,” HousingWire (July 16, 2012)
We are finding in Atlanta, well priced homes in excellent condition are pending sales in just a few days. We are also seeing many multiple offer situations. The market is starting to turn to a Sellers market.

If you are considering buying a home, take advantage of the LOW interest rates and the current prices to get in now. Inventory is shrinking!

Did he really say "That"?

President Barack Obama has some news for entrepreneurs: “If you’ve got a business -- you didn’t build that. Somebody else made that happen.”
That’s what the president said Friday during a campaign stop in Roanoke, Va. His point was that if you’re successful, “you didn’t get there on your own ... somebody along the line gave you some help.” And that somebody includes the government: public investments in roads, bridges, schools, the Internet, etc. -- “this unbelievable American system that we have that allowed you to thrive,” Obama said.
But the “you didn’t build that” line raised a few eyebrows in the business community.

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Dan Danner, president and CEO of the National Federation of Independent Business National Federation of Independent BusinessLatest from The Business JournalsObama: 'If you've got a business, you didn't build that'Banks in Small Business Lending Fund make more loansBanks in Small Business Lending Fund make more loansFollow this company , said Obama showed "an utter lack of understanding and appreciation for the people who take a huge personal risk and work endless hours to start a business and create jobs."
“Every small business is not indebted to the government or some other benefactor," Danner said. "If anything, small businesses are historically an economic and job-creating powerhouse in spite of the government.”
Andrea Saul, a spokeswoman for Republican presidential candidate Mitt Romney, said Obama's remarks were "insulting to the hard-working entrepreneurs, small-business owners, and job creators who are the backbone of our economy."
Amy Payne, a blogger for the Heritage Foundation, said this “slap in the face to hard-working Americans conveyed Obama’s belief that it takes a village -- a heavily subsidized village -- to create that venture you’re profiting from.”

Is the Housing Crisis Over?

It’s official: The housing market has reached bottom, at least according to 44 forecasters surveyed by The Wall Street Journal. Only three economists surveyed said they didn’t think the market had reached bottom yet.
The recent momentum in housing has plenty of economists and forecasters convinced that the worst is behind. According to many real estate indices, home prices are up, sales of existing and new homes are picking up year-over-year, and inventories of for-sale homes have fallen dramatically.
The decrease in for-sale inventory is the key and will likely help maintain the rise in home prices, Mark Fleming, CoreLogic chief economist, told The Wall Street Journal.
What’s more, the number of vacant homes is at its lowest point since 2006, The Wall Street Journal reports.
Now that the “bottom” has been reached, economists admit there’s still a long way to go for a full recovery. In particular, more than one in every four home owners with mortgages are still underwater, owing more on their loan than their home is currently worth. However, analysts note that rising home prices are chipping away at that number. Also, shadow inventory of unsold homes and foreclosures still threaten the momentum of the recovery as well.
“From here on, housing is unlikely to drag the U.S. economy down further,” JPMorgan Chase economists note. “It will instead reflect the strength or weakness of the overall economy: The more jobs, the more confident Americans are about keeping their jobs, the more they are willing to buy houses.”
Source: “Housing Passes a Milestone,” The Wall Street Journal (July 11, 2012)