Anticipated Increase in Cheap Houses for Sale

Experts are anticipating a flood of cheap houses for sale in the United States as hundreds of distressed homeowners are losing their houses to foreclosure.

With one in every five homeowners owing a debt more than the fair market value of their properties, experts predict that more and more families will lose their homes to foreclosure and cheap houses for sale will create a glut in the housing market.

Market statistics showed that nearly 20 percent or about 8.3 million homeowners owe mortgages more than the value of their properties. An additional 2.2 million homeowners are said to be on negative amortization.

An analysis of the basic cost-benefit showed that distressed homeowners will opt to abandon their properties, leaving them for foreclosure. If this will happen, cheap houses for sale will dominate the housing market.

However, Columbia University business professor Eric Johnson believed that distressed homeowners will not just abandon their properties and accept foreclosures. Citing economics of choice, Johnson argued that homeowners will continue to value their properties above their market price. He pointed out that homeowners will not sell their distressed properties at a loss.

He also noted that people tend to consider the immediate outcome of their actions than the long-term effect.

This analysis gives hope to some experts that distressed homeowners will not just abandon their properties and cause a surge of cheap houses for sale in the market.

Meanwhile, some distressed homeowners who have been diligently paying their monthly mortgages but struggling to keep up with them are starting to question whether to continue being responsible citizens and try to honor their debts or just leave their properties to be added to the growing list of cheap houses for sale.

These homeowners believed that the U.S. government is only providing assistance to people who have been reckless in their choices of loans and still continue to live in their properties without paying their mortgages.

They explained that they continue to pay their monthly mortgages despite their difficulties in producing the required amount because their moral standards do not allow them to not pay their dues.

Some decided to stay and save their properties from foreclosure because they do not want to damage their credit scores. They are hoping that President Barack Obama’s foreclosure prevention plan would help them refinance their loans for affordable payment terms.

Related Posts:

• Unemployment, Defaults, Cheap Houses for Sale Increase
• Foreclosures Crisis Hitting Everyone Including the Affluent
• Obama Cites Government Foreclosures Campaign
• Investors, Non-Profits Compete for Cheap Houses for Sale
• Aid to Stem the Tide of Foreclosed House in Ohio