For months now our South Florida readers have been seeing the positive news about the rebounding home values and purchases prices on residential real estate throughout the local area. While most of the focus has been on what this means for potential buyers and sellers in the market, a recent report detailed some of what this means for those homeowners who aren’t in the market for property and who are instead simply trying to make the monthly mortgage payment.
According to the report, the rebound in home values is also leading to a decrease in the amount of mortgages that are “underwater” in South Florida – a term that means a home is valued at a price less than what is owed on the mortgage. For instance, the report indicates that in Palm Beach County figures from the fourth quarter of last year show that 24.2 percent of homeowners had property that was underwater. While that percentage may still seem high, it actually represents a decrease from the 37.1 percent in the same period in 2012.
Many Florida residents have been left with no choice but to stay in their current residence during the housing market downturn of recent years. Taking a loss on selling what has historically been labeled as one of the safest investments – real property – doesn’t sit well with anyone. However, now more homeowners may be able to see that point in time in the future when their property value will be back to where it was years ago.
Underwater mortgages are still a major problem throughout the entire country. In South Florida though, the resurgent housing market seems to be paying dividends to everyone in the real estate market, whether they are buyers, sellers or homeowners who are staying put.
Source: Sun Sentinel, “Zillow: ‘Underwater’ mortgages continue to fall across South Florida,” Paul Owers, Feb. 28, 2014