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Trapped in your house?

Posted by Scott Van Voorhis May 24, 2013 07:24 AM

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The good news is the number of Greater Boston homeowners owing more than what their castles are worth has dropped below 16 percent.

The bad news? Another 18 percent of Boston-area homeowners may be out of  the red, but still don't have enough equity to sell and buy another house, Zillow finds in its first quarter report on negative equity.

That means just over a third of homeowners inside the 495 beltway are stuck in place, unable to sell, unless, of course, they want to rent instead of buy.

Why? Banks are now looking for 20 percent down. As a result, these homeowners won't walk away with enough cash to make the down payment on their next home.

Worse still, it doesn't look like there is any imminent relief for these stuck homeowners, at least according to Zillow's projections.

After shooting up over the several months, home prices are likely to settle out over the next year, with only very modest gains.

How modest? Zillow projects the number of Boston area homeowners stuck in negative equity territory will drop from 15.9 percent now to 15.4 percent in the first quarter of 2014.

That means an additional 3,600 homeowners will taste freedom over the next year. Good for them, but hardly the kind of mass liberation we need to see for more homes to hit the market.

The fact is, homeowners trapped in either negative or minimal equity is a big factor why listings and inventory is down by anywhere from 30 to 50 percent.

Are you stuck in your house? Do you hope to sell at some point? What's your plan for breaking free?

This blog is not written or edited by or the Boston Globe.
The author is solely responsible for the content.

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Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

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