Survey: Homeowners’ sinking feeling is real
Poor loan-to-value ratios are spreading. The volume of property owners with debt that exceeds value is high, according to the latest Business Pulse survey, the nonscientific weekly online poll from the Tampa Bay Business Journal .
Of the 379 respondents to a question about whether property owners are ‘underwater’ on their home debt, 46 percent, or 173 said they were, and 22, or 5 percent said they were flat. Just under half, 49 percent or 184 respondents, said they didn’t owe more than their property was worth.
Of those that are underwater, a 37 percent majority said they owe between $50,001 and $75,000 while 26 percent owed between $1,000 and $25,000. One-fifth of the respondents owe $100,000 or more.
Of those who still have equity, 39 percent said it is shrinking fast while 61 percent said it is stable or growing.
In comments from readers, one said his underwater condition has worsened over the last two months by 500 percent.
“I have offset this somewhat by having a home inspection aimed at gaining credit for wind mitigation features present in my home,” said reader Michael Manning. “It reduced my insurance premium by 33 percent,” he said.
For reader Tom Kay, he has acquaintances that are almost desperate to sell their homes because they simply don’t want to pay significantly increased property taxes and insurance premiums following their purchases made between 2004 and 2006, which have not significantly declined despite the decline in underlying value no fax needed payday loans.
“In my case, I bought a house previously homesteaded, and following my purchase with a ‘new’ homestead, the property tax tripled and the insurance cost more than doubled,” Kay said. “They haven’t lowered the assessment or the insurance premium yet to reflect the real-world diminished value of the property.”
Reader Maximillian Boehmer said he works in lending and has people calling every day believing their house is the only one in town that hasn’t decreased in value.
“You cannot escape this economic crisis through denial,” he said. “We are all in this together, and hope as you may, you are not immune. You may have equity in your home, but trust me the house isn’t worth what it used to be.”
Tampa area home prices were down 20.9 percent for 2008 and 32.4 percent since the July 2006 peak, according to numbers released late last month in the S&P/Case-Shiller home price index.