Homes “Seriously Underwater” Down in Second Quarter
Over all the country’s inventory in underwater properties has gone down. However, Las Vegas still one of the city’s that have the highest amount of underwater properties. Here’s more info on the situation.
In a positive sign for the housing market, RealtyTrac reported Thursday a decrease nationwide in homes that were classified as “seriously underwater”, down to 9.1 million homes in the second quarter of 2014, representing 17.2 percent of all homes nationwide. The number is a decrease from the 17.4 percent of underwater homes recorded in the first quarter.
The classification is given to homes where the combined loan amount secured by the property is at least 25 percent higher than the property’s estimated market value.
Negative equity in distressed properties is also down. Fewer distressed properties had negative equity in the second quarter, with 44 percent of all properties in the foreclosure process seriously underwater — down from 45 percent in the first quarter of 2014 and down from 57 percent in the second quarter of 2013. The share of foreclosures with positive equity decreased to 34 percent in the second quarter, down from 35 percent in the first quarter.
“Home price appreciation has slowed in the last few months in many of the markets with the most underwater homes, slowing the pace at which homeowners are recovering equity lost during the Great Recession,” said Daren Blomquist, vice president at RealtyTrac. “For instance, annual home price appreciation in California was at 16 percent in May 2014 compared to a high of 31 percent in July and August of 2013. In Arizona, home price appreciation has slowed to 6 percent annually compared to a high of 24 percent last year.
“In addition many of the properties that are seriously underwater are in a deep negative equity hole that will take some time to dig out of,” Blomquist continued. “The average loan-to-value on the 9.1 million homes seriously underwater was 133 percent, and the average loan-to-value on the homes in foreclosure that are seriously underwater was 134 percent.”
States with the highest percentage of residential properties seriously underwater in the second quarter were Nevada, Florida, Illinois, Rhode Island, and Michigan.
On the other end of the spectrum, homes with at least 50 percent equity held steady from the first quarter at 9.9 million in the second quarter of 2014, representing 18.8 percent of all properties with a mortgage.
