California Provides Interesting Case Study for Today’s Real Estate Situation
If you were to create a list of the top five states hit hardest by the real estate market collapse, California would be on that list.
But according to a survey of California-based Realtors, there are a lot of positive trends going on in the Golden State that provide a case study for real estate at the national level.
Positive Equity Sales Spike Dramatically
One big development in 2013: the percentage of homes with positive equity – meaning, the difference between the home’s fair market value and the remaining balance on the loan is positive – rose significantly.
In 2009, for example, positive home equity sales only made up 30% of all home sales – a dismal number that was a clear indicator of how dire the situation was for homeowners, many of whom were trying to just get rid of a home whose value had dropped like a rock.
In 2013, however, positive equity sales rose to 85%, a much healthier number for a market.
Rising home prices have helped turn this statistic around. The higher home prices go, the more valuable a homeowner’s equity becomes. Rising home prices have also helped over two million underwater homeowners regain positive equity.
REOs and Distressed Properties are Fewer
Another development is...
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