While the unemployment rate for Georgia and the Atlanta metro area continued to drop, a new housing survey finds that the Peach City’s housing market is still suffering. According to Zillow.com, an online real estate database, almost half of all Atlanta homeowners are underwater on their mortgages.
According to Zillow’s survey, 47.6 percent of Atlanta homeowners were underwater in the first quarter of 2013. The survey also found that many more homeowners wouldn’t be able to move out of their current homes if they wanted to. A reported 64.1 percent of Atlanta homeowners, while not technically underwater, likely do not have enough equity to afford to move, the report shows.
“Reaching positive equity, even barely, is an important milestone. But things like real estate agents’ fees and a down payment for the next home traditionally come out of the proceeds from the prior home’s sale,” said Zillow Chief Economist Dr. Stan Humphries. “Without enough equity, these costs will instead have to come out of a homeowner’s pocket, leaving many still stuck.”
Despite a recent growth trend in the real estate market, the website saw little hope of the situation improving in the near future. Zillow projects 46.2 percent of local homeowners will still be underwater in the first quarter of 2014.
The national negative equity rate fell in the first quarter to 25.4 percent of all homeowners with a mortgage.
Humphries argues that the high number of people around the country with a negative equity rate, i.e., underwater on their mortgage, is affecting the market right now, but could clear up soon.
“Looking at the effective negative equity rate could explain why recent, healthy declines in the number of underwater borrowers haven’t yet translated into more homes for sale,” he said. “The only cure is patience, as rising home values continue to build equity to the point where more homeowners can realistically sell.”