• The strong price growth this spring has had an important impact on the housing market. Rising prices lifted many homeowners out of negative equity, improving confidence, enabling them to sell without a loss or to refinance at record low rates, and reducing the risk that they might roll into foreclosure.
• In addition, stronger prices make short sales more attractive to banks and alleviate the weight of distressed sales on the sale prices of neighboring homes. According to Corelogic, the number of underwater homeowners nationally eased by roughly 700,000 to 11.4 million in the 1st quarter of 2012 or roughly 23.7% of all mortgaged homeowners. An additional 2.3 million were in near-negative equity or had less than 5% equity, also a decline from the 4th quarter.
• Not surprisingly, all of the top five markets were ground-zero areas for the sub-prime crisis or had protracted economic recessions, while the bottom five missed both the boom and bust of the recent housing market cycle leaving them in sound equity territory.
• For the latest Local Market Reports from NAR Research, click here.