The Echo From 2008

The Real Estate Espresso Podcast

The Echo From 2008

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Welcome to the Real Estate Espresso Podcast, your morning shot of what’s new in the world of real estate investing. I’m your host, Victor Menasce. On today’s show, we’re looking at an echo from the Great Financial Crisis.

Back then, a collapse in the banking house of cards triggered a drop in lending liquidity that precipitated a massive fall in real estate prices across the US. There were several areas across the US that got caught up in that mess in a big way. Now on today’s show, we’re looking at areas of the country that are currently experiencing negative equity, comparing them to counties that were similarly affected in the period from 2008-2012.

In that time, the recovery only started in 2013. It took a full eight years for prices to renormalize many of those areas. Right now, there are areas in California, Florida, New York, Illinois, and Texas that are experiencing negative equity. Washington DC is also on the list but, in my opinion, for different reasons. As of the first quarter of 2025, about 2.1% of homeowners with mortgages were underwater. That’s an increase from 1.7% in 2024 but it’s still lower than the pre-pandemic levels, around 3.6%.

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