IRVINE, Calif. – Jan. 9, 2014 – Florida ranked second only to Nevada for the number of homeowners “deeply underwater” in a December report issued by RealtyTrac. According to the research firm, 34 percent of Florida homeowners with a mortgage had a home worth at least 25 percent less than the combined loans secured by the property.
The state ranked second only to Nevada, where 38 percent of homeowners are deeply underwater.
Nationally, RealtyTrac’s U.S. Home Equity & Underwater Report for December 2013 shows that 9.3 million U.S. residential properties were deeply underwater, representing 19 percent of all properties with a mortgage.
However, the number of underwater owners continues to fall. December numbers were down from 10.7 million residential properties deeply underwater in September 2013, representing 23 percent of all properties with a mortgage; and down from 10.9 million properties deeply underwater in January 2013, representing 26 percent of all properties with a mortgage.
The recent peak in negative equity was May 2012, when 12.8 million U.S. residential properties were deeply underwater, representing 29 percent of all properties with a mortgage.
Equity-rich properties – those with at least 50 percent equity – grew during the fourth quarter as well, from 7.4 million (16 percent of all residential properties with a mortgage in September), to 9.1 million (18 percent of all residential properties with a mortgage in December).
Three Florida cities also ranked high nationally for percentage of homeowners with a mortgage who were deeply underwater. Las Vegas retained the No. 1 spot with 41 percent of owners underwater, Orlando came in second (36 percent), while Tampa (35 percent) and Miami (33 percent) ranked second and third, respectively. Detroit (35 percent) came in at No. 2 and Chicago at No. 5 (33 percent).
“During the housing downturn we saw a downward spiral of falling home prices resulting in rising negative equity …” said Daren Blomquist, vice president at RealtyTrac. “Now we are seeing the reverse trend: rising home prices resulting in falling negative equity, which in turn is giving millions of homeowners a lifeline to avoid foreclosure when they encounter a trigger event.”
• States with the highest percentage of residential properties deeply underwater in December were Nevada (38 percent), Florida (34 percent), Illinois (32 percent), Michigan (31 percent), Missouri (28 percent), and Ohio (28 percent).
• States with the highest percentage of equity-rich residential properties were Hawaii (36 percent), New York (33 percent), California (26 percent), Montana (24 percent), and Maine (24 percent). The District of Columbia also posted an equity-rich rate of 24 percent.
• Major metropolitan statistical areas with the highest percentage of equity-rich residential properties were San Jose, Calif., (37 percent), San Francisco (33 percent), Pittsburgh (30 percent), Buffalo, N.Y. (30 percent), and Los Angeles (29 percent).
• States with the highest percentage of deeply underwater residential properties in the foreclosure process included Nevada (65 percent), Florida (61 percent), Illinois (61 percent), Michigan (55 percent), and Ohio (48 percent).
• Major metro areas with the highest percentage of deeply underwater residential properties in the foreclosure process were Las Vegas (66 percent), Tampa (63 percent), Chicago (62 percent), Orlando (61 percent), and Detroit (61 percent).
© 2014 Florida Realtors®
Reprinted with permission. Florida Realtors®. All rights reserved.