Upside Down Owners, Fear Not-You May Soon Be Right-Side Up

Elina B. Gilbert | Thursday, May 9, 2013 | Community Associations Miscellaneous

With the housing market in a slum for the last several years, many homeowners have not only lost equity in their homes, but have flipped their investments upside down!  These homeowners ended up owing more on their mortgages then the valuation of their properties, which cripples such owners’ abilities to refinance or sell their homes in order to pay-off the first mortgage.

If you’re a homeowner currently in that predicament, or a homeowners association that’s being affected by this “plague”, there may be a light at the end of the tunnel.  Fannie Mae recently referenced an article by Orawin Velz, Fannie Mae’s Director of Economics, focusing on the rise of home prices on a national basis. The article also surmises that home prices are expected to continue increasing in 2013, with most underwater properties expected to regain their positive equity by 2016. 

What does this expected trend mean for homeowner associations?  Does it mean fewer delinquencies and fewer foreclosures?  Perhaps associations can also expect to see less abandoned properties and therefore less maintenance mismanagement that could affect neighboring units.  What do you think this could mean for associations?

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