PHOENIX - “I have no equity. I don’t own any of this,” Rebecca Burt told 3 On Your Side when we visited her Phoenix home.
It is an ongoing struggle for Arizona homeowners like Burt. Do they stay or do they go?
“I don’t know what I am going to do,” she said as she broke down in tears.
For thousands of Valley residents, it’s an emotional waiting game. While housing prices in Phoenix continue to fall, so does consumer confidence.
A two-year study conducted by Trulia, a resource for homebuyers, sellers and renters, and RealtyTrac, an online marketplace for foreclosure properties, shows more than half (54 percent) of U.S. adults believe recovery in the housing market will not happen until 2014 or later.
In a previous survey conducted six months ago, 42 percent of American adults said they thought the market would turn around by 2012 or had already turned around. Now only 23 percent continue to think this will happen.
“We should assume it’s going to be until 2014,” says real estate attorney Robert Nagle, from the Nagle Law Group. “We need to lower expectations, live accordingly and if it turns around in 2014 or sooner, even better.”
Nagle, who counsels struggling homeowners, says even if the market were to turn around tomorrow, “it would not make any difference to people who are desperately underwater.”
He points to the example of a homeowner who owes $200,000. If the house is now worth $100,000 he says with an appreciation rate of 3 percent, it would take 20 years to break even.
Nagle says he’s not telling people to walk away from their homes. He says he wants more people to take a “hard look based on financial analysis and determine what is best for them.”
He also advises people to stop looking at their homes as money-makers. “If you are underwater, you’re underwater,” Nagle says matter of fact. “Your house is worth what it’s worth.”
“The bright spot is that the current market is accepted as the new norm and a lot of people have accepted the shock in the real estate market,” says housing expert Dean Wegner. “The majority of conversations people are having there is nothing surprising anymore.”
Wegner is optimistic about where we’re at and where we’re headed.
“There’s a level of confidence that people with foreclosures over three years are now purchasing bargains at record rates and are ecstatic about their new life.”
While he agrees that “the market has some time to come back,” Wegner feels Phoenix will lead the charge. “Phoenix will lead out of this recession,” he tells 3 On Your Side.
“Reason number one: We are the most affordable major city in the United States based on medium income to medium sales price.”
For Phoenix-area homeowners in need of housing help, there is a free Consumer Awareness Expo on Saturday, May 21, 2011 from 9:30 a.m. to 12:30 p.m.
More information can be found by visiting http://consumerawarenessexpo-channel3.eventbrite.com/.