After yesterday’s post, Number of underwater California homes on the decline, I spent some time catching up on my reading. One of first things I read was the 5/29 newsletter I get from the CALIFORNIA ASSOCIATION OF REALTORS® called C. A. R. Newsline. The following article caught my eye and since it related so closely to what I wrote yesterday, I decided to do some research on what was the highest number of underwater homes at the peak of the real estate downturn.
Thirteen Million U.S. Homeowners Still Underwater in Q1
The national negative equity rate fell in the first quarter, to 25.4 percent of all homeowners with a mortgage, according to the first quarter Zillow® Negative Equity Report. But another 18.2 percent of homeowners with mortgages, while not technically underwater, likely do not have enough equity to afford to move.
Slightly more than 13 million homeowners with a mortgage were in negative equity, or underwater, at the end of the first quarter, owing more on their mortgage than their home is worth. But when including homeowners with less than 20 percent home equity, the “effective” negative equity rate at the end of the first quarter was 43.6 percent, or a total of 22.3 million homeowners. These homeowners likely cannot afford a down payment for a new home, tying them to their current homes and contributing to inventory shortages.
Among the 30 largest metro areas covered by Zillow, those with the highest effective negative equity rate, including homeowners with 20 percent equity or less, include Las Vegas (71.5 percent); Atlanta (64.1 percent); and Riverside, Calif. (59.7 percent).
Though I never found what was the highest number or percentage of underwater properties, I did come across some very interesting disparities in this 13 million number reported by Zillow. Below are two headlines reporting this number nationwide was under 10 million. This 9.7 million number was reported in many articles citing either CoreLogic or DataQuick.
Only 9.7 million borrowers were underwater on their mortgage in the first quarter, or nearly 20 percent of mortgage holders, down from 11.4 million properties, or 23.7 percent of homes during the same period last year, according to research firm CoreLogic.
Wall Street Journal headline on June 12, 2013 Number of ‘Underwater’ Borrowers Drops Below 10 Million
The moral of this story, statistics are good to help give an overview of what is happening in the real estate market. But as these numbers show, they need to be examined closely and when you do read them, what do they mean as to what is happening in your local market. The only way to get an accurate picture there is to call you local real estate expert and ask them. If you looked at different areas of the country, todays percentages varied by location from the high of over 40 % to as low as 15%.
If you were going to sale your home, wouldn’t you want to know exactly how many underwater properties there are on the market market in your area and how it affects you. Again, the local professional REALTOR®, CRS (Certified Residential Specialist) or agent is how to get your best answer. Using one makes you more money and saves you time!
Let me put my nearly 30 years experience to work for you and help you get the perfect Napa Valley property, please contact me