“It was a bit of a nightmare because I don’t live in Greenville…I have no desire to go back to Greenville because my life is in DC,” says Patel. “It was a lot of coordination and I am still trying to collect over $2,000 from my tenants.”

Patel finally ended up selling the home recently at a large loss. She didn’t want to do a short sale because the process is long and risky, and she didn’t want to damage her credit.

(Read More: Record High New Home Prices to Grow)

While there are no real estimates of how many “accidental landlords” now inhabit the housing market, Realtors say they are one more cause of today’s low inventory issue. Usually a buyer is also a seller, making the transaction a wash in terms of inventory, but if the buyer is not a seller, and instead becomes a landlord, inventory takes a negative hit.

Home prices have been rising steadily, up over ten percent from a year ago, according to the latest reading from CoreLogic. Prices are still well below where they were during the housing boom, when so many people bought into the market.

As millions come above water, others are far below. Forty-eight percent of borrowers in Atlanta are underwater, 37 percent in Miami, 54 percent in Las Vegas and 37 percent in Sacramento.

(Read More: Homes Selling at Fastest Pace Since Boom)

It will take many years of price gains for these homeowners to see the light of equity.

Article source: http://www.cnbc.com/id/100764601

If you have no desire or need to sell your home, then falling home prices are just on paper and likely temporary, right? Depends on how you look at it.

Falling home prices put more borrowers in a negative equity position, that is owing more on their mortgage(s) than their homes are worth. We call that “underwater,” and for good reason, because for some borrowers that sense of drowning in debt has profound implications.

Today Zillow.com reported a new high in negative equity: 28.4 percent of single family homes with a mortgage (remember, 32 percent of all homeowners do not have a mortgage).

That’s a national average, but the numbers are far worse in some of the nation’s big metros. Atlanta, for example, has a 55.7 percent negative equity rate. Denver, 41 percent, Chicago nearly 46 percent. This is on top of all the foreclosure hot spots like Phoenix, where close to three quarters of all borrowers are underwater.

Why should we care if it’s all on paper?

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Article source: http://www.cnbc.com/id/42957613?__source=RSS*blog*&par=RSS