Apr 28

Equity Rich Are Feeling Stuck…

Equity Rich Are Feeling Stuck…

 

Equity Rich Are Feeling Stuck... Image courtesy of ddpavumba / FreeDigitalPhotos.net

Equity Rich Are Feeling Stuck… Image courtesy of ddpavumba / FreeDigitalPhotos.net

Even home owners who are “equity rich” aren’t necessarily in any hurry to sell and cash in.

The share of equity rich residential properties – those with at least 50 percent of positive equity – stood at nearly 19.8 percent by the end of the first quarter, up slightly by 0.2 percentage points year-over-year, according to RealtyTrac’s U.S. Home Equity & Underwater Report.

But in some markets, the rise of equity rich properties isn’t translating into more listings. For example, in Seattle, 21 percent of home owners are equity rich – yet Seattle has the lowest months of inventory in the city’s history, says OB Jacobi, president of Windermere Real Estate.

“These positive equity numbers simply aren’t converting to new listings because there is nowhere for sellers to move,” Jacobi says. “What we have in Seattle is your typical chicken and egg situation, and for now, there’s no end in sight.”

Indeed, “we have turned from an equity problem to an inventory problem,” says Heidi Greer, broker at RE/MAX Alliance in the Denver market. “A majority of sellers are hesitant to sell for fear they will not be able to find or secure a replacement home. New construction will help to relieve some of the pressure although only in the mid-to-higher price ranges, not the affordable sector. Unless a property is outside the window of demand, equity is not an issue, with a large number of homes being sold for thousands over list price and with no simple contingencies such as inspection and appraisal.”

The following major metro areas had the highest percentage of equity rich properties at the end of the first quarter:

  • San Jose, Calif.: 43.7%
  • San Francisco, Calif.: 38.6%
  • Honolulu, Hawaii: 36.2%
  • Los Angeles, Calif.: 32.2%
  • New York: 31%
  • Pittsburgh, Pa.: 29.7%
  • Poughkeepsie, N.Y.: 28.3%
  • Oxnard, Calif.: 27.7%
  • San Diego, Calif.: 27%

Source:”U.S. Home Equity & Underwater Report, First Quarter 2015,” RealtyTrac (April 23, 2015)

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