WaPo: 31% of DC Area Homeowners Underwater

by Mark Wellborn

The Post ran a story today about the tightness of the DC housing market, a theme that will already be very familiar to regular UrbanTurf readers.


However, the news in the piece that caught our eye was not the shortage of homes on the market, but rather the number of DC area residents that have no equity in their homes.

From the WaPo:

Nearly 31 percent of Washington area residents have no equity in their homes, according to First American CoreLogic. They are “underwater” because their property values have dropped and they owe more on their mortgages than their homes are worth. In order to sell, they must bring cash to the table.

Since many homeowners are unable or unwilling to do that, they don’t list their homes for sale even though they want to, said Michael Briggs, vice president of professional development at McEnearney Associates, a local real estate brokerage. “That’s a whole bunch of properties that should be on the market right now and they’re just not in the game,” Briggs said.

The effect of these homes not being listed has been felt for months. In Janelle Nanos’ story in January regarding the housing shortage in DC, area agent Lindsay Reishman noted that about 30 to 40 percent of the homes he represents have competitive bids; Keller Williams Carolyn Hurwitz said that one of her listings had seven bids within four days of being on the market.

With the spring selling season underway and listing prices rising, it will be interesting to see if those underwater homeowners continue to sit on the sidelines.

See other articles related to: housing shortage

This article originally published at http://dc.urbanturf.com/articles/blog/wapo_31_of_dc_area_homeowners_underwater/2077


  1. ghina said at 12:44 pm on Monday May 17, 2010:

    so the expiring tax credit will not create that much of a dent?

  1. Anonymous said at 5:46 pm on Monday May 17, 2010:

    The headline as currently written is misleading. It should read: “31% of DC-area Homeowners Underwater”

    Exactly what percentage of homeowners in DC itself who are underwater is not mentioned in the article.

  1. Mark Wellborn said at 7:30 pm on Monday May 17, 2010:


    The change has been made. Thanks for noticing.

    Mark Wellborn

  1. Shiba-Fussa said at 10:50 am on Tuesday May 18, 2010:

    People need to stop thinking short term.  So what if you are underwater if you don’t plan on selling.  If you are, rent the place out.  Plus housing prices will rebound and start to go up again (but hopefully) this time at a more normal pace.

  1. Kristin said at 11:03 am on Tuesday May 18, 2010:

    I’m part of that 31% and to be frank, it sickens me. As a young couple, my husband and I bought our first home with a glimmer of hope in our eyes and the so called “best investment of our lives” mindset only to see our investment plummet to record lows. This has been devastating for us and the advice that things will turn around and to just hang in there is I’m sorry to say, not sounding as hopeful as it once did.  Now tell me, how long do I have to remain in my first home before I can make something, I mean anything, off of it?

    We had no intention of staying here for more than 5-7 years and now I don’t see us getting out of this within the decade. I bought my home for $335K and just got it appraised…what did it go for? $250K…you know it’s seeing figures like this that makes people want to risk everything and abandon their homes, destroy their impeccable credit and endure years of hardship with their family as a result.

    I never thought that I would EVER consider something like that…I’m too strict with my bills and maintaining my credit, but unless something changes, the bitter resentment of the toll this market is taking on us and those that are responsible for bringing this market down the tubes has me considering.

  1. Will Smith said at 11:08 am on Tuesday May 18, 2010:

    Ugh, that’s horrible, Kristin.

    Your situation also goes to show that not all “being underwater” is created equal; it’s a matter of degree. The homeowner whose house value has dipped a few grand and you, who has seen your home lose $80K, are both technically underwater. But the two situations really aren’t comparable.

  1. ZCF said at 2:05 pm on Tuesday May 18, 2010:

    to Kristin

    Well you can look at the bright side.  DC has a very robust rental market, and probably always will.  Your mortgage isn’t increasing, in fact in real money it will be decreasing.  On the other hand, rents sure as hell will be increasing.

    So you have options.  When you decide to move in a few years,  you might be able to rent it for close to or more than what you’re paying for it.  Sure, it will be a hassle, but it will not be ruinous.

  1. hoos30 said at 2:40 pm on Tuesday May 18, 2010:


    Does your roof work? Do the walls keeps the cold air out?  Can the mailman find your house? Not to sound callous, but if you answered ‘yes’ to these questions then your home is in perfect working order!  It is a HOME, not an investment, HGTV be damned.  Who cares what the daily market value of your house is?  This short term, stock market mentality is what got us into this mess to begin with.  Why let it stress you out? Enjoy your home for what it is; if you get 10 good years out of the house, can you not say that was worth $80K? Living in a “free” house for years was always a fantasy.  Good luck.

  1. Janson said at 4:46 pm on Tuesday May 18, 2010:

    Kristin’s outrage at not getting a guaranteed return on her capital is indicative of a generation of financially responsible but naive market participants. Participating in a market is always risky, by definition. ZCF continues to support the cinderalla story: inflation is not guaranteed (or even likely), so the real value of the loan in the future is completely unknown. The value of housing in the DC area, despite the recent improvements could (and has been forecast by several respectable sources) drop further, and the rental rates in DC could easily go down, particularly because there are so many underwater homeowners that need to rent to maintain the career mobility that the US labor market demands. I’m not prognosticating a decline, like I did from 05-07 (because of the absurd rent to price ratios), but I guarantee you we do not know what the future holds for any asset class. If you learned that you are exposed to financial risk that significantly reduces your quality of life, you must eliminate that risk, even if it is costly. That’s why we buy insurance.

    I hope all your financial lives improve.

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