When clients are considering buying a home and ask me about the tax consequences and what I think is going to happen with real estate prices, I can usually answer the tax question easily. For the question about what’s going to happen with prices, I have to say, “I don’t know.”
The problem is, with so many properties still underwater following the Great Real Estate Crash, we really don’t know how far “down” might be.The Los Angeles Times reports that almost one-third of the mortgages in Los Angeles County are for more money than the property is worth And as the interactive map using information from Zillow shows, negative equity continues to push down property values nationwide, with owners unwilling or unable to sell their homes and more eventual foreclosures in the offing.
I used the map to see that in my own zip code, about 20% of homeowners with mortgages are currently underwater.
If you’re considering buying, ask your real estate agent to find out how many homes with mortgages in the area are currently underwater. Agents almost never want to volunteer that information, but it’s news you can use that they should provide.