Housing Recovery Offers Little Comfort To Family Whose Home Is Underwater

The steady stream of good news about the recovering housing market isn't without its limits. Thad Salter and his family live in the Phoenix suburb of Maricopa since moving from California in 2006. He's seen his home drop in value by more than half and has been underemployed as an human resources professional since 2008. NPR's Ted Robbins reports that, for the Salters, the housing news isn't as good as reports in the housing industry would suggest.

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Though the housing market is improving, plenty of families are still struggling to regain what they lost when the real estate bubble burst. We're going to the Phoenix area now to hear from a family we first met nearly seven years ago. The Salters moved to Arizona from California at the height of the bubble in 2006. By 2009, their house was worth just one-third of what they paid for it. Their income took a hit, too.

NPR's Ted Robbins reports that things are better for the Salters now, but still complicated.

TED ROBBINS, BYLINE: The last time I drove with Thad Salter down his block, 15 of the 22 homes have For Sale signs or were vacant. In their town of Maricopa, a Phoenix suburb, 83 percent of all homes were in foreclosure. Now, the foreclosure rate is down to less than 30 percent. Thad Salter even points out a new house under construction.

THAD SALTER: There it is. They're starting to build again.

ROBBINS: The house is going up on a couple of blocks of vacant land. New homes wouldn't be going up if there weren't so few existing homes available to buy. Thad Salter's in-laws just sold their home in Maricopa after it was on the market for two weeks. We meet their realtor, Tom Smith, for lunch at the Sunrise cafe. Maricopa is 35 miles southwest of Phoenix. Smith says other areas closer are even hotter.

TOM SMITH: Gilbert, Chandler, Scottsdale, some of those areas, it literally, the listings that we're putting up, are being sold in hours, not in days. So it's crazy.

ROBBINS: It's harder to get a mortgage than it was during the boom. Out-of-state, even out-of-country buyers largely from Canada are paying cash. Values are rising, but they are nowhere close to the peak, which brings us to the Salters' house.

SALTER: Isaac, are you ready?

ROBBINS: Ten-year-old Isaac Salter, turns off the alarm in their two-story beige stucco home. When I was here three years ago, there was an enormous pile of papers on the dining room table. Thad Salter and his wife Laura had a $300,000 mortgage. Their house was worth just $125,000. They were under water. He was trying to decide whether to accept a government loan modification under the Making Home Affordable program. He did his homework, crunched the numbers, and like nearly a million other homeowners, took the government deal.

SALTER: That's been a good learning experience. You know, and it's kind of toughened me up even more than I thought it would.

ROBBINS: And the dining room table is clean. The Salters' monthly payments went from roughly $2,500 to about $900 a month. The house's value is up a bit, but under the terms of the government modification, if the Salters' sell, they'll lose what they've put into it. So Thad Salter now wants to refinance his mortgage the old-fashioned way.

SALTER: At least in the traditional, if I sold it, I can write the loss off. The way it's structured now, it would be really hard for me to write the loss off.

ROBBINS: The Salters may want to move if Thad gets a better job. Once an HR executive, for years he's been underemployed running a computer lab at a local school. He hopes to land a job with Intel or another tech company closer to Phoenix. Laura Salter works 35 miles from home. Their older son, Isaiah, is enrolled in a special needs school even farther away.

SALTER: It is a nice house. I mean, don't get me wrong. I'm happy to be here. It's comfortable for us and the kids.

ROBBINS: In the end, though, family comes first. The house, says Thad Salter, it's just a material possession. Ted Robbins, NPR News.

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