If you currently own one of the beautiful homes in the San Mateo Coastal area, you may or may not be aware of the changes that have been affecting the real estate market. However, for those of you who are hoping to get in on the great low mortgage rates (the lowest they’ve been since 1971) and are looking for a home in one of the great coastal cities; you may be sensing a trend. The Real Estate industry across the nation has seen a significant increase in Foreclosure properties.
Just a few years ago, homes in foreclosure were rare and many didn’t fully understand all was entailed in having a home become “bank owned.” Today, “foreclosure” seems to be the markets’ buzz word as many are seeing loss of jobs and the markets’ decline in home sale prices. Consequently, this environment has brought a new term to the surface: underwater homes. Underwater homes are those that have mortgages that are greater than the home’s current worth on the market. This, in turn, is resulting in an increase in foreclosures.
Recently, CoreLogic, a Real Estate date provider, noted that there were 11 million homes with underwater mortgages at the end of June. Of course, this seems to be good news since the number of underwater homes at the end of March was 11.2 million. However, these homes are simply turning into foreclosures instead of proving that the market is actually turning around. Typically, underwater homes rise when the market sees falling home prices.
An article by CoreLogic explained, “In all, 23 percent of U.S. homes with mortgages were underwater at the end of June. Another 2.4 percent of homeowners with a mortgage had less than 5 percent equity in their home, making them more likely to end up underwater if home prices drop further. The total number of underwater mortgages represent roughly $2.9 trillion in mortgage debt.”
Once homes are underwater, homeowners have a harder time recovering. They oftentimes are unable to qualify for mortgage refinancing and therefore find themselves just scraping by to make payments in order to keep their head above water. California is in the top five states for underwater mortgages and has therefore become one of the top states in the nation for foreclosures.
We’ve seen some changes in the San Mateo Coastal area, but are happy to see the numbers are not as drastic as other areas in our state. Below are current numbers of active and foreclosed listings in our market.
If you have any questions regarding underwater mortgages or are facing a prospective foreclosure; please let us know! We have years of experience in the San Mateo Coastal area and can help guide you each step of the way!
Kathy & Michael Rain
Your San Mateo Coastal Real Estate Experts
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