Interesting read here: You Walk Away Blog.
The article linked above has a lot of info about why the housing market is still in trouble. Undoubtedly, we all know that right? Well, most of us realistic real estate professionals know this and don't pretend to blow smoke about how great the market is.
Don't get me wrong, this market is great if you are a Home Buyer in Jacksonville, but as a Seller of a home in Jacksonville Florida - not so good!
2 big points I see from this article:
- 11-19 million homeowners are still underwater. That's a lot of homeowners, and considering Florida was one of the biggest over valued real estate markets in the country, a large portion of those millions under water belong to us Floridians. Jacksonville is right in the middle of it!
- #1 reason MOST homeowners Strategic Default: Negative Equity.
Negative Equity and Strategic Default: Many home owners are just barely holding on to all their payments, but when faced with a house that is $50k, 100k, or even $200k underwater, those struggling home owners quickly make business decisions to get the heck out of there!
Is it morally and ethically wrong to voluntarily stop making payments?
I believe that's up to each individual, but I also believe home owners should take several things into consideration before they stop making payments voluntarily:
- Will moving help their situation? If you have a $3500 payment and you can rent for $1800.....obviously you can save some serious cash. BUT if those numbers are tighter: $2000 payment and rent for $1900, that's not necessarily going to help the monthly cash flow situation.
- How long till you break even? This has to do with how much you are upside down. If you are 10% or 20% negative equity that isn't so bad and you could conceivably break even much sooner if you can stomach it. 20% + negative, you may be looking at the long haul before you break even - but realistically, no one knows for sure.
- Do you brag about your credit score? Obviously if you stop making payments on your mortgage, your credit score will decline.
- Are you making a well thought out business decision? Strategic defaulting requires an overall realization of your financial outlook. If things look bleak, and I'm talking big negative equity, little to no savings, no major changes about to happen with your income for the better; then getting yourself out of a negative worth may be a good move, and quickly! However, if you are sitting with plenty of savings and retirement, and your income is doing good, and you have the ability to continue saving monthly......well, you may need to stay put unless you just can't handle the fact that you owe so much more than the house is actually worth in today's housing market.
Need to consult about your specific problem with Negative Equity in Jacksonville Florida? Contact Brad.
Thank you in advance for Sharing!
Give us a call at 904-234-5196 if we can help you buy or sell real estate in Jacksonville, FL.
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Listing information last updated on August 17th, 2019 at 9:08am EDT.