Boston: We’re #4! – MA owners have high-level of equity in their homes

Massachusetts homeowners have ranked #4 out of the fifty states when it comes to being “above water” on their home loans. This means, they have high levels of equity in their homes (their homes are worth more than what they could expect to sell them for).

The reasons for this are – well, primarily, because most people here bought their homes a long time ago when prices were lower. Prices in Boston, for example, are still 80 percent higher than they were in the year 2000. There are 255,000 units of housing in the city while only 4,000 or so are sold each year, and many of these are new construction. So, most people bought their homes years ago (that’s why they have 30-year mortgages, people), so they’ve ridden out real estate markets good and bad.

Buyers of homes during the past three-to-five years are most-likely not able to sell their homes (single-families and condos, included) for what they paid, but, then again, very few need to – we have a pretty strong economy in the face of a grueling recession.

(The primary reasons people walk away from their homes are 1) they lose their jobs and can’t continue to pay their mortgage loans; and, 2) they get sick and can’t continue to pay their mortgage loans.)

According to the Boston Business Journal:

Massachusetts ranks No. 4 in the nation with average home equity of $115,443, according to an upcoming report to be released by Nielsen PreView and Nielsen Claritas …

Massachusetts benefits from a stable, aging population that tends to stay in their homes longer. Other states’ equity cratered because residents bought homes during the height of building boom, only to see prices collapse shortly afterward.

Hawaii, New York, and New Jersey were the only states ranked higher.

Related posts:

1. Breaking: people without jobs can’t afford to stay in their homes
2. Fewer Bay State homeowners lose their homes to foreclosure in 2009
3. Did 2005 bankruptcy reform cause more foreclosures?
4. When you look at higher and lower condo prices, take heed
5. South Boston condo owners finally return to their homes, 2 years later