From the NYT:
FOR the New York City area’s underwater homeowners – that is, those whose mortgage debt exceeds the value of their homes – this could be a very long decade.
According to a report released last month by First American CoreLogic, www.facorelogic.com a real estate consulting business, these homeowners may not begin to see positive equity until 2017, possibly even later.
Sam Khater, a senior economist at First American and the author of the report, said the average shortfall was 39 percent. He predicted that housing prices would stabilize, then rise slowly over the next seven years, but that owners would recover equity mostly by paying down the loan during that time.
Recovery forecasts, Mr. Khater said, are based on historical data from housing market cycles and the average home-price appreciation over the last 30 years.
“The danger is that seven years might be a little optimistic,” Mr. Khater said, referring to the predicted recovery time for New York’s underwater borrowers. “We may not revert to the average long-term appreciation in the next five or six years.”
The average mortgage holder in the New York area has a loan of 70 percent of the home’s value, Mr. Khater said. (There are no estimates for the number of homes owned outright, but about half of the homes in the United States are not mortgaged.)
Of the roughly 1.1 million mortgage holders in the New York City area, including sections of northern New Jersey and Westchester County, about 116,000, or over 10 percent, are underwater, according to First American.