With the waves of foreclosures and short sales sales hitting many local San Diego neighborhoods, homeowners are faced with negative home equity. They may be able to make thier payments but are literally “locked in” to their home unable to sell, buy or relocate due to their home’s substantial loss in value – unless their Lender will forgive some of the principal and allow them to sell "short" 

 

A recent study, Housing Busts and Household Mobility, was completed on this very same issue by housing experts of University of Pennsylvania Wharton School of Business and Federal Reserve Bank of New York. They warned that “the repercussions of “lock in” include less efficient job markets and reduced incentives for homeowners to keep up and make improvements on their homes.”

 

The study covered over 20 years, from 1985-2005, and showed that negative equity in homes reduced the percentage of homeowners moving by 47% within a two year period. Although the past cannot predict the future we think it’s wise for policy makers to take into account the findings of the study and the effect “lock in” has not only on homeowners but the entire real estate market and the local economy as a whole.

 

This site offers advice and resources for those seeking information on San Diego foreclosures and short sales. Feel free to get in touch if you have questions.