Why are home values dropping in South Carolina and the Southeast?

Foreclosures:

The quickest way to end up underwater is to live in a neighborhood that’s plagued by foreclosures.

When one home on your block goes into foreclosure, your home’s value drops approximately by 1%. But that isn’t a one-to-one relationship. If two homes on a block go into foreclosure, your home’s value can drop more than 2%. As homes go into foreclosure, they create a domino effect, lowering home values throughout a neighborhood in a cascade beyond homeowners’ control. 

Homes staying for sale on the market:

When “For Sale” signs linger in a neighborhood for three or more months, that may mean buyers and sellers can’t agree on a price. In that environment, homes are unlikely to sell unless the sellers lower their asking prices. Compare the time it took for homes to sell in your neighborhood three years ago versus today; if it’s taking weeks or months longer to sell, the prices homes can fetch are dropping.

Unemployment:

In most cases, the cities where homes have lost the most value during the past year also possess the highest unemployment rates.  Individuals living in areas battered by high unemployment are likely to see their home values drop further, especially if they live in areas dependent on dwindling industries.

Homes not being maintained:

Dented siding, peeling paint, etc. could be signs that neighbors are having trouble making ends meet and can no longer pay to take care of their homes. Or they may have gotten an appraisal and discovered their homes have dropped in value and are no longer worth the cost of repairs. As the condition of homes in your neighborhood worsens, home values almost inevitably drop.

-For any mortgage questions call the mortgage expert: Gary Schoenholz at 864-979-1111, website www.GaryTheMortgageExpert.com – over 15 years of mortgage experience and over a 1000 mortgages closed