Chicago Real Estate Search Chicago Real Estate Chicago Real Estate Chicago Neighborhoods Downtown Chicago Condos Weekly Email Subscription
Welcome to Chicago Homes for Sale by Dean's Team Sign in | Help

BlogChicagoHomes.com

Most Complete Chicago Real Estate Blog! Daily Updates on Chicago Homes for Sale and Real Estate . . . Great Chicago Neighborhoods . . . Living in Chicagoland . . . Your Comments Welcome!

Tags

News

  • Real Estate Blog

Archives

JUST WALK AWAY? One FL Survey Says 4 Out of 10 Underwater Homeowners Would!

SAME ATTITUDE HERE IN CHICAGO?  FROM WHAT WE HAVE INFORMALLY GUAGED - YES!

Back in the day . . . say, 2006 . . . few homeowners would consider simply walking away from their home, even if they couldn't keep up on their mortgage payments.  Why should they?   Likely, they could easily sell their homes at a small to modest profit, no matter their original equity position.

Fast forward to 2010 - a scant four years later!

For many, especially in the heavily-declining Florida Real Estate Market, home values have fallen 40% or more.  Those who purchased with little money down during the Housing Boom are in a serious negative equity position - they are underwater, owing far more on their mortgage balance than the likely amount they could sell for today.

With little invested originally, the reality of having to bring considerable money to the table in order to close conventionally, and the often-mind-wrenching status of being out of work and unable to keep up with day-to-day living expenses, more and more underwater homeowners, it seems, are simply considering walking away these days.

In a study conducted by Harris Interactive, for Trulia and RealtyTrac, as reported by Paul Owers of the Orlando Sun-Sentinel, over 40% of distressed, underwater homeowners surveyed would consider leaving their home rather than working out a loan modification or other forbearance with their lenders.

The choice many have, it seems, is either to sell at a staggering loss, or simply stand pat, and not move, until the market improves.  If they are not able, or not willing, to take either path, many have already decided to simply pack up and leave.

Rick Sharga, of RealtyTrac, a Foreclosure and Pre-Foreclosure Identification and Compilation Service, feels part of the frustration underwater homeowners harbor involves the callousness of their lenders toward their situation.  Only a small percentage of troubled homeowners have qualified for loan modification or work-out programs.  Many who have contacted their banks feel they are not sincere about helping them.  Thus, they often harbor little guilt about pulling up and leaving, with the lender holding the bag.

The walk-away decision comes despite the considerable negative impact a foreclosure can have on a homeowner's credit score, as well as the old stigma of losing one's home to the bank.

Many economists don't expect the Real Estate Market in the most depressed areas - including the hard hit states of FL, CA, AZ, and NV - to improve dramatically for another two to three years.  The prospect for home equity reversal, therefore, does not appear on the horizon near-term.

Further, RealtyTrac suggests high foreclosed and pre-foreclosure inventory is likely to continue for some time.  The company has compiled a list of nearly 800,000 foreclosed, bank-owned properties.  Fewer than 30% are currently on any local Multiple Listing Service, available for sale.

Here in Chicago? 

Walk-aways are not rampant here as they may be in the most hard-hit Real Estate Markets.   But, in some Chicago Neighborhoods and Suburbs, price drops from our market peak in 2006 have been in excess of 40% - especially true for certain Chicago Condominiums. 

That could make desperation walk-away something more homeowners consider.

DEAN MOSS & DEAN'S TEAM CHICAGO

Posted: Monday, June 07, 2010 1:50 PM by Dean's Team

Comments

No Comments

Anonymous comments are disabled