One of the worst consequences of The Great Recession years was the damage they inflicted on home equity. It was therefore very pleasing to read a recent report this week that demonstrated that total home equity has more than doubled in the period from June 2011 to June of this year!
The report, by Corelogic, showed that, in June 2011, the level of home equity above mortgage debt across the nation was $6.1 trillion. That gap has now widened to $12.7 trillion!
It is, of course, very difficult to overstate the importance of healthy equity levels to the homes market. As we saw during the recession, falling price levels and a general lack of confidence can have a dramatic negative effect on real estate.
It's therefore wonderful to be able to see such a graphic demonstration of how things have turned around. We do, of course, see the effect of this every day in the very high levels of buyer sentiment across the majority of property sectors locally, fueled by continued low mortgage rates.
But the good news in the Corelogic report doesn't stop there!
The report also looks at the average equity gain per homeowner across the 50 states between June 2015 and June 2016. Along with the State of Washington, California saw the joint highest equity growth during this period, with an average gain of $29,000 over these 12 months! Oregon completes a ringing endorsement of the Pacific Coast belt, lagging just behind the two states it's sandwiched between at $28,000 (effectively third in the nation).
This is good news on several levels. At the most basic level, homeowners simply have more options as their equity grows. One of these, of course, is to move house, perhaps upgrading or even downsizing and pocketing some or all of the equity that's built up in the currently owned home.
The knock-on effect is a more fluid market in general, as people are far more likely to move at a discretionary level, as opposed to necessity moves, such as for job relocation. Furthermore, buyers are always motivated by the possibility of showing equity gains almost as soon as they've moved in!
And if you have an investment portfolio, it almost goes without saying that this is really good news too.
If you've been considering selling your home, now is clearly a great time to get an accurate valuation of your home. If you haven't done this lately, the Corelogic stats suggest that you may well be in for a pleasant surprise in terms of the equity that's been accumulating for you in the past five years or so.
Why not get the ball rolling by clicking our widget below to get an instant ballpark home valuation, then contact us so that we can arrange to visit you and provide a totally accurate current market price, taking all the variables that an online estimate cannot see into consideration.
We look forward to hearing from you!