Zillow has published a graph on how many homeowners have “negative equity,” or owe more than their home’s value. Not all these home owners are in touble; but the numbers are instructive.
As you can see, the downpayment rquirements after 2007 became far more stringent, no doubt due to the sub prime crisis. Negative equity started to rise in 2004 before the market peaked; that really tells us how much the bubble was inflated by bad loans.
Many of these people, should they need to sell, will either have to come up with money to close or face a short sale. This chart is for the New York metro area. If you’d like to see your marketplace, click here.
J. Philip Faranda is Westchester’s Premier Short Sale REALTOR. Find out more at www.NYShortSaleTeam.com