Given how we have seen more unemployment claims than ever before over the past several weeks, fear is spreading widely. Some good news, however, shows that more than 4 million initial unemployment filers have likely already found a new job, especially as industries such as health care, food and grocery stores, retail, delivery, and more increase their employment opportunities. Breaking down what unemployment means for homeownership, and understanding the significant equity Americans hold today, are important parts of seeing the picture clearly when sorting through this uncertainty.
One of the biggest questions right now is whether this historic unemployment rate will initiate a new surge of foreclosures in the market. It’s a very real fear. Despite the staggering number of claims, there are actually many reasons why we won’t see a significant number of foreclosures like we did during the housing crash twelve years ago. The amount of equity homeowners have today is a leading differentiator in the current market.
Today, according to John Burns Consulting, 58.7% of homes in the U.S. have at least 60% equity. That number is drastically different than it was in 2008 when the housing bubble burst. The last recession was painful, and when prices dipped, many found themselves owing more on their mortgage than what their homes were worth. Homeowners simply walked away at that point. Now, 42.1% of all homes in this country are mortgage-free, meaning they’re owned free and clear. Those homes are not at risk for foreclosure (see graph below):
In addition, CoreLogic notes the average equity mortgaged homes have today is $177,000. That’s a significant amount that homeowners won’t be stepping away from, even in today’s economy (see chart below):
In essence, the amount of equity homeowners have today positions them to be in a much better place than they were in 2008.
Bottom Line of East Bay Real Estate
The fear and uncertainty we feel right now are very real, and this is not going to be easy. We can, however, see strength in our current market through homeowner equity that has not been there in the past. That may be a bright spark to help us make it through.
Why the East Bay Real Estate Market?
East Bay CA is known for it’s good economy, beautiful landscapes and extremely popular housing market. When other states and territories have experienced decline in housing prices the Bay Area in general has remained strong. This doesn’t mean you should not diversify your portfolio across many states, but East Bay Real Estate is certainly a strong place to start for a novice investor. There are even some great low cost homes that are ripe for renovation.
Need More Information?
We have a team of friendly, helpful staff & agents that specialize in East Bay real estate and property sales that can help you work out how to best get your property portfolio started. Our agents are here to put your needs first, get you the best deals and offers, help you buy or sell your dream home and build your investment portfolio. Reach out to our team today to find out your options.
If you are looking to find an East Bay Realtor, or looking for homes for sale in East Bay CA, or even to sell your home with someone who will make sure you get the best deal and understand your needs – look no further – when you work with us, consider yourself family.