26.6% who bought their homes in northern NJ in 2006 are now underwater!
“Unfortunately, with all the adjustable-rate mortgages that are re-setting and all the people that can’t afford their monthly payments, they are in a position where they have to sell their homes,” said Amanda Hoffman, a spokeswoman at Zillow.com. “For those people, having negative equity is a pretty big deal because they can’t sell their homes without owing the bank a lot of money.”
As the sub-prime crisis continues to impact New Jersey, negative equity has become a growing problem. Negative equity is when you owe more than what you owe on the house. In many circumstances this is a paper loss unless one needs to sale or refinance. However, in the current market of declining values, rising inflation, and job losses it is a significant indicator of an impact on NJ that will have significant consequences including increases in homelessness.
There is a fascinating web site – Zillow.com – that provides a wealth of information on major market areas. Zillow has expanded its market report beyond the Zillow Home Value Index and rates of negative equity to incorporate additional housing data in 165 metropolitan statistical areas (MSAs), including:
Market Peak Data – the national and local reports now identify when the market peaked, the median value at the peak and the change in value since the peak.
Market Distress Signals – the national and local reports now break down the percentage of homes sold for a loss and percentage of homes that sold in foreclosure along with the housing turnover rates of less than one year. These are detailed by quarter since Q1 2003.
The Star-Ledger did an article in the business section on this last week. To read this article click here.
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