Julie Jalone realtor

With rapidly rising prices here in the Sacramento area and nationally, the number of homeowners underwater on their mortgages continues to fall but millions are still short or do not have enough equity to move.

According to a recent report by Zillow, the national negative equity rate was 25.4 percent in the last quarter compared to 27.5 percent at the end of 2012. The number of homeowners with negative equity is coming down but the percentage represents more than 13 million homeowners still underwater. If you include homeowners with less than 20 percent home equity, the numbers grow to 43.6 percent, or a total of 22.3 million homeowners.


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These homeowners, if they sold, most likely could not afford the down payment and closing costs for a new home.  We have a large number of homeowners who would like to sell but the negative or lack of equity is keeping them from moving forward and is a major cause of the inventory shortage we have been experiencing.  In addition, I believe there are a large number of homeowners who do have equity, would like to move but are worried they will not qualify for a new mortgage under today’s tight credit standards.

The only cure to the low inventory is time and patience.  As home values rise, more homeowners will have sufficient equity for their down payment and costs of a new home. 

Among the 30 largest metro areas covered by Zillow, those with the highest effective negative equity rate are Las Vegas, Nevada (71.5 percent); Atlanta, Georgia (64.1 percent); and Riverside, California (59.7 percent).  Sacramento County stands at 46 percent while Placer County comes in at 33 percent. 

Negative and low equity does not have to stop sales. It is important to look at individual situations and explore options. There are often factors which mediate the initial concerns of selling when you are underwater or have very little equity.

Julie Jalone

Realtor Julie Jalone

If you have any questions about buying or selling a home in the current market, feel free to reach out to me at the MagnumOne Realty Office in Roseville at (916) 899-6571 by email to [email protected] I would be happy to answer your questions.

We specialize serving the needs of buyers and sellers of homes in the Sacramento area including Sacramento, Placer, El Dorado, Sutter and Yuba counties.