Sep 13, 2010

Stable housing markets - Balanced economies, right supply

No longer are the sun belt areas the "hot" mortgage markets anymore. According to, 21.5 percent of the nation’s single-family homes with a mortgage were underwater (in a negative amortization scenario) at the end of second quarter 2010, down from a peak of over 23 percent a year earlier. ( estimates 60 percent of all U.S. homes are mortgaged, with the rest owned outright). 

The two major factors that contribute to being underwater are home value declines and the size of a home buyer’s down payment, Humphries notes. A larger down payment combined with smaller price decline in some markets can prevent a homeowner from going underwater. Of course in the case of disastrous markets like Phoenix down payment wouldn't matter much.

Another measure impacting a local market’s underwater status is a market’s “transactional velocity” — or the rate of transactions per year. Even in markets that have seen major home price declines like Detroit, Humphries says, a slower-moving market where fewer properties change hand each year may indicate that owners have more history — and thus, more equity—in their homes, and thus may have a higher likelihood of escaping an underwater situation.

The following are markets that have come out relatively unscathed from the mortgage crises that has hit the US recently
  • Pittsburgh, PA
  • Tulsa, OK
  • OKC, OK
  • Cape Cod Area, MA
  • Yakima, WA
  • Springfield, MA
  • Lancaster, PA
  • Hartford, CT
  • Boston, MA
  • Utica, NY

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