SIGNIFICANT INCREASE IN NEGATIVE EQUITY SINCE 2005
NEGATIVE EQUITY SINCE 2005
Yesterday HomeValueForecast.com released a Negative Equity Data report. It shows that negative equity in 8 counties in New York and California has risen significantly since 2005. I don’t think anyone living in the central valley up through and even including Sacramento has to be told in a report that negative equity has risen in these areas, most of them have seen it for themselves!
What is interesting is the use of the word SIGNIFICANTLY. I think national news paints with a broad brush and usually smoothes over the rough spots, but I think this article hits, with full force, at those living in California’s central valley listening to the national news hoping that it really isn’t as bad as it seems. It should bring a strong dose of reality to their current situation.
Tom O’Grady, CEO of Pro Teck Valuation Services, commenting on the report added: “If equity is -40% of the property value, the probability of default is in excess of 75 percent.” If he is correct in that statistic then that would be startling to me since the central valley through Sacramento has A LOT of homes with that much negative equity and more!
Many homeowners in this area are just barely hanging on and hoping with all they have that it will turn around soon. I hate to be the bearer of bad news, but this report does not paint a good picture for large parts of California.
I am a California attorney and real estate broker and I specialize in distressed properties. I see more and more people coming into my office saying they just can’t hang on anymore. The stark reality is that it just doesn’t make sense to continue to suffer while hanging on when the future shows no sign of improvement. A lot of folks hang on because they have an emotional attachment to their house but as the above report notes, even that gets drowned out as the home continues to drop deeper underwater as the negative equity continues to grow out of control.
I don’t have a crystal ball, but what I can see in many areas of the state is the current situation getting worse, which will in turn lead to many more short sales. If you have any questions or concerns about your own personal situation I would be happy to give you a FREE one on one legal consultation. You can call me at 916.442.6400 or send me an email at firstname.lastname@example.org or just visit my website www.upsidedownca.com.
California Attorney and
licensed Real Estate Broker