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Underwater Home Owners Lose Mobility

By Joe Spake | January 25, 2011

The Miami Herald reports that many of the  unemployed are finding it impossible to sell their houses in order to take jobs elsewhere. Professionals who bought their homes during the housing boom, or took equity out of their homes for other purchases, now find that their mortgages exceed the value of their depreciating homes, keeping them "anchored" where they are, unable to seek available jobs in other areas.

Which way is "tough all over?"

Which way is "tough all over?" Every way for some.

While the Herald article addresses problems unique to the extremes of the South Florida real estate market, the  anchor analogy can be applied to most areas of the country. Those who bought near the peak of the nationwide housing boom, say 2005, when money was easy to get and leverage was highly encouraged, now find their homes worth  50% less than 5 years ago.  They are left with the prospect of renting out their homes, short selling, foreclosure, or  remaining  where they are.

It can be tough choosing between the security of an income in another city, and the edgy security of a home that could go into default due to unemployment or underemployment.  Families are weighing the importance of financial security, shelter, and the economic future, making tough decisions on whether to stay, or move on.  For the last two years, the media has reported extensively on strategic default - which has generally come to mean walking away from a home and mortgage you can still afford to achieve other economic goals.

Which way to turn?

Which way to turn? - courtesy Nevada Help for Homeowners

The Finance and Economics blog Calculated Risk says:  "... less worker mobility is kind of like arteriosclerosis of the economy. It lowers the overall growth potential." The mobility issue will be around for a while and will definitely have an impact on the job market as well as the housing market. But most significantly, in between the markets and figures - there, right there, so often resides a family chained to a submerged anchor of an investment.

Next time - Strategies you may not have thought of.

Which way to choose?

Next, ways to go you may not have thought of

Joe Spake is noted and quoted expert on social media and real estate topics at the national and local level. A syndicated consultant, Joe is also a licensed real estate broker with Revid Realty in Memphis, Tn.

Joe is a leading area consultant for small businesses, non-profits and individuals via his company Spake Communications. He is also co-founder of Social Web Learning and is a product consultant for Telivant.

Joe has began engaging with leading edge technologies in the mid 1990s, utilizing online marketing for his real estate business.He is an experienced presenter of marketing, technical and social media content and has authored courses and developed course content to enhance the use of technology and social media for business professionals.

Joe is one of the most "wired" real estate experts you will run across, and always willing to lend a helping hand to those who want to traverse the digital real estate potential.
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