Monday, May 11, 2020 / by Vanessa Saunders
From Vanessa Saunders, MBA, MIMC , Broker Owner, Global Property Systems Real Estate.
We see startling figures during today's pandemic-induced economic shut-down that are scary as hell. Unemployment down beyond Depression era numbers. Businesses unable to survive without employees or customers. Few homes on the market to sell, to desperate buyers. How will real estate survive?
Survival may not be pretty but the housing market will come back, and we will not see the bursting of a bubble like we did in 2008. The fact is, there's one big difference between then and now.
In 2008, lenders were allowed to give mortgages to pretty much anyone who could fog a mirror. People who could never before qualify for a mortgage now could get one. Thus there were loads of new homeowners out there, with lots of debt and not much (if any) equity. When the banking crisis hit, these borrowers were the first to drop the keys on the counter and run. And why not? They had little to lose.
That was then. This is now.
Compare that to today's market, where a large number of borrowers have significant equity in their home mortgages. This is the biggest differentiator between now and twelve years ago. Today, 58.7% of homes in the U.S. have at least 60% equity. CoreLogic notes the average equity mortgaged homes have today is $177,000. That’s a significant amount that homeowners won’t be stepping away from, even in today’s uncertain economy.
Beyond that, 42.1% of all homes in this country are mortgage-free, owned free and clear without debt. These homes are not at risk of foreclosure.
However and whenever our economy resets itself, the real estate market here will survive and grow again. As a matter of fact, now an excellent time for first time buyers to get a home, and for current home owners to move up as their needs require. With social distancing, buying right now isn't as easy as it used to be, but it can be done. We are closing on home sales every month. One of them could be yours. For more information about the Hudson Valley real estate market, or to find your next home, contact us at Global Property Systems real estate.