If you are underwater on your home, it may feel like a long way to the “surface” for you. However, according to Fannie Mae, the light at the end of the tunnel – or the surface of the ocean, as the case may be – is likely closer than you think. According to the government-controlled GSE’s Economic and Strategic Research (ESR) group, 1.8 million properties are likely to “rise out of their underwater positions by the end of 2013.” The group also says that 1.7 million properties moved from negative to positive in 2012. Orawin Velz, director of economic and strategic research at Fannie Mae, says that “this improving trend should help spur mobility and housing turnover [while] the broader economy…also benefit[s].”
Although Fannie Mae definitely tends to skew toward the sunny side of the street when it comes to housing, other data firms’ housing information seems to indicate that this time the GSE may be on target with its predictions. According to RealEstateRama, equity sales (sales of homes with equity and not in distress) rose to their highest levels in five years last month. In California, one of the country’s hardest-hit states during the housing crisis, equity sales made up slightly more than two-thirds (66.8 percent) of all sales in February 2013 and even more in March (roughly 72 percent). If this trend continues and spreads to other states, it could mean good news for many homeowners who believed that they would never exit their present home without taking a serious loss on their investment.
by Carole VanSickle