Moving Up is Tougher These Days
Before the housing crash, many families were hoping to “move up”–into a bigger house, maybe even in a better school district. But, now such “moving-up buyers,” which have long been the lifeblood of a vibrant real estate market, are few and far between. In the past a buyer moves “up,” “across,” or, in the case of empty-nesters, sometimes moves “down.” But, regardless of the next house they buy, these buyers provided a steady stream of new listings. Now the supply is lower because so many people are stuck in their homes.
Millions of people who might otherwise be “move-up buyers” are stuck in place because their homes are underwater. Even people who are not fully underwater can’t move because they need at least 5% equity to pay real estate costs of a sale and then another 20% down payment on a new loan. Homeowners that owe more than 80% of the home’s value are “effectively underwater”. The number of such “effectively underwater” homes in the nation is around 25 million.
People under 40 traditionally have been the ones who are most eager to move up into bigger and better homes. Now it is too difficult for a majority of people to accumulate equity in their homes to take the necessary step forward. Although low interest rates are a motivating factor for buyers they can’t seem to get out of their homes and in a position to purchase a new one. Negative equity also is disproportionately concentrated in lower cost homes. These types of affordable residences that first-time buyers would like to bid on are not on the market.
New Jersey Short Sale as a Road to Recovery
There are some upsides to the slow pace of new for-sale homes. First, the number of foreclosures have fallen, in part because of the number of programs that are available to help people stay in their homes. That also means that fewer of the more affordable homes are being listed for sale. For those with underwater homes, the solution of a short sale often is often the best possible scenario to get a fresh start. In fact, with the new federal programs out there and more short sales getting to close, the real estate market continues to exhibit signs of stabilizing. It is not an over-statement to say that there has never been a better time—with more favorable rules for homeowners—than now to go through with a New Jersey short sale.
If you are considering a short sale or if you have legal questions what a short sale is, you may want to get experienced legal help to navigate the process. Fortunately, most banks pay for you to consult with a short sale lawyer to help with the legal details.
In our area if you have any legal questions or want assistance with obtaining the right information, contact one of our Burlington County short sale lawyers to discuss your options and help you reach a successful solution.