Rising home prices have helped the nation’s homeowners by increasing equity and lifting more of them out of “underwater” mortgage situations — where the combined loan amount owed is higher than the home’s estimated market worth.
According to a new report released today by RealtyTrac Inc., a California-based real estate data firm, the number of properties in the United States that were “seriously underwater,” that is, where the loan amount owed is at least 25 percent higher than the home’s market value, dropped to 13 percent at the end of 2014.
That is the lowest percentage since RealtyTrac began tracking home equity trends in the first quarter of 2012. The peak for the problem was the second quarter of 2012, when 29 percent of all homes with a mortgage were seriously underwater.
In metro Toledo, RealtyTrac said as of the end of 2014 a total of 18 percent, or 23,899 homeowners with mortgages, were seriously underwater. That’s down from 31 percent at the end of 2013, when 34,647 homeowners with mortgages were seriously underwater.
RealtyTrac said the prime reason for the drop in underwater situations was rising home prices.
“Median home prices nationwide bottomed out in March, 2012, and since then have increased 35 percent, lifting 5.8 million homeowners out of seriously underwater territory,” said Daren Blomquist, RealtyTrac vice president.
In metro Toledo the median home price rose 5 percent to $98,000 in 2014, according to figures from the Toledo Regional Association of Realtors.
Penny Kice, president of the local Realtors’ association, said the situation does seem to be improving locally for homeowners who lost equity or whose mortgages went underwater during the recent recession years.
“I have seen industry articles about foreclosures and short sales being down so I think we are whittling away at them,” Kice said. “Locally, I am seeing increases in home values across the market. Some [submarkets] will see significant increases over others. But inventories also are lower, which always helps the market as a whole,” Kice said.
A short sale is one in which the proceeds of a home sale fall short of the amount owed on the mortgage but is allowed by the lender.
Four other Ohio metro areas were less than 20 percent in terms of properties that were seriously underwater. Dayton was at 19 percent; Youngstown, 15 percent; Columbus, 13 percent; and Cincinnati, 12 percent.
Akron was at 22 percent and Cleveland was 24 percent. In fact, Cleveland was among RealtyTrac’s 10 major metro markets at the end of 2014 with the highest percentage of properties that were seriously underwater.
Las Vegas was the worst market at 30 percent, followed by Orlando, Fla., 26 percent; Tampa, 25 percent; Jacksonville, 24 percent; Cleveland; Miami, Fla., 24 percent; Detroit, 24 percent; Chicago, 22 percent; and Atlanta, 19 percent.
Major markets, according to RealtyTrac, where the percentage of properties seriously underwater was below 10 percent included San Jose, Calif., 2 percent; Denver, 4 percent; Portland, Ore., 5 percent; Minneapolis, 5 percent; Boston, 5 percent; San Francisco, 5 percent; Pittsburgh, 6 percent; Houston, 8 percent; and Seattle, 9 percent.
©2015 The Blade (Toledo, Ohio). Distributed by Tribune Content Agency
