Underwater owners down 50% from peak

From the NYT:

Fewer Underwater Mortgage Holders

The share of underwater mortgage holders — those who owe more than their homes are worth — has dropped by more than half since peaking in early 2012, according to new data from Zillow.

The decline was driven by rising home values at the lower end of the market, a turnaround from last year. Condominiums were the exception, as their values continued to lag nationwide.

As of the second quarter of 2015, Zillow’s data, which was released earlier this month, showed that 14.4 percent of homeowners with a mortgage had negative equity, compared with 31.4 percent in the first quarter of 2012, the peak.

While the current rate is still a long way from the historically normal negative equity level of around 2 percent, it is markedly lower than the nearly 17 percent rate at the end of last year. The negative equity rate did not budge in the second half of 2014, after dropping steadily for 10 consecutive quarters, because of declining values of lower-priced homes. Another Zillow report released in March had identified 21 major housing markets in which values for the bottom 10 percent of homes were falling, rather than rising. Since then, continued demand for affordable homes coupled with low inventory has helped increase values in the bottom third of homes, lifting more homeowners out of negative territory, said Svenja Gudell, the chief economist of Zillow.

Among the largest 35 metropolitan areas, the highest levels of negative equity were in Las Vegas (25 percent), Chicago (22 percent) and Atlanta (21 percent). New York fell just below the national average, with an overall rate of 12 percent. As in many markets, however, a wide gap separated the negative equity rates at the upper and lower ends of the New York market. About 23 percent of homeowners in the bottom third of homes (by value) were underwater, compared with just 5 percent in the top third, Ms. Gudell said.

The metro-area markets with the highest levels of negative equity for condominiums were Las Vegas (37 percent), Chicago (33 percent) and Orlando (30 percent). The New York metropolitan area (which includes the city, Long Island, northern New Jersey and Westchester) was well below the national average, with 13 percent of condo and co-op owners underwater.

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19 Responses to Underwater owners down 50% from peak

  1. grim says:

    Thought this snippet was particularly interesting:

    New York fell just below the national average, with an overall rate of 12 percent. As in many markets, however, a wide gap separated the negative equity rates at the upper and lower ends of the New York market. About 23 percent of homeowners in the bottom third of homes (by value) were underwater, compared with just 5 percent in the top third, Ms. Gudell said.

  2. grim says:

    From Bloomberg:

    Here’s Proof That Housing May Be Turning a Corner

    The ability to get a mortgage has been one of the biggest obstacles to the housing market since the financial crisis, as only the most qualified borrowers were able to get a home loan. Now, that’s changing.

    Outstanding home mortgage debt in the U.S. posted a 0.5 percent increase in the second quarter from the year before, the Fed’s financial accounts report on Friday showed. That’s the first year-over-year gain in mortgage debt since 2008, ending a streak of contraction that was unrivaled in data going back to 1949.

    “This strikes us as a key turning point for the U.S. housing market, since it is obviously much easier to support an increase in sales volume and prices with a growing pool of finance,” Michael Shaoul, chief executive officer of Marketfield Asset Management LLC in New York, wrote in a note to clients. “It also confirms some of the loan officer surveys that have suggested that mortgage lending standards are finally loosening at the same time that a stronger labor market increases the pool of willing and able borrowers.”

    In the aftermath of the housing-market crash, which was sparked by lenders giving mortgages to just about anybody who wanted one, banks tightened up on their requirements for borrowers’ credit history and income. That’s part of the reason the housing recovery has been so gradual.

  3. chicagofinance says:

    Dilbert (clot Edition):
    http://dilbert.com/strip/2015-09-18

  4. chicagofinance says:

    The End Is Nigh (rags Edition):
    For nearly two decades, “South Park” has lambasted . . . everything. The cartoon’s raw satire offends left, right and center; all races and religions — and atheists, too. But some are just too dense to get it.
    This week’s season premiere slapped “social-justice warriors” — extremists out to police every word for bias.
    “PC Principal” takes over the school attended by Kyle, Stan, Kenny and Cartman, the four kids at the show’s heart.
    Kyle gets two weeks’ detention for daring to tell a fourth-grader, “I don’t think Caitlyn Jenner is a hero” — which the principal calls “transphobic and bigoted hate speech.”
    Later, PC Principal beats Cartman within an inch of his life for not falling into line.
    Enter the “warriors.” Culture site Bustle complained the show made it “seem like a bad thing to strive for correct language around transgender issues.”
    “Comedian” Peter Coffin spent hours tweeting about the unfairness of it all.
    Film critic Bob Chipman whined that creators Matt Stone and Trey Parker have “slowly morphed into the Trump of TV comedy.”
    It all proved Parker and Stone right.

  5. Ragnar says:

    I think the episode is still free to watch at Southparkstudios.com. A compendium of current politely correctness and privelige-checking.

  6. Ragnar says:

    Political correctness, autocorrect.

  7. NJT says:

    Having an opinion about anything these days is considered ‘hate’. Good thing most people are cowards and/or lazy.

    *Two years ago my son was being ‘bullied’ by a redneck, WT, POS. Went to the school and talked to the principal. Obama (looks like him) did nothing. I went to the WT, POS’s house and demanded to talk with it’s father. Dude wouldn’t come to the door (and didn’t call the police).

    No problems after that.

  8. grim says:

    Check your privileged microagressions

  9. Juice Box says:

    Neighbors are have a big 40th birthday party, outdoors. They are signing Sweet Caroline Kareoke I believe, they had better check their white privelege and sing some Tupac.

  10. chicagofinance says:

    I just found Nom giving a public deposition…..
    https://www.youtube.com/watch?v=RbK4cL3QSc0

  11. Comrade Nom Deplume, not enjoying Labor(ing) Day says:

    [11] chifi

    Funny stuff. That was the Meffa (a.k.a. Medford) City Council.

  12. leftwing says:

    MSM clip of the day

    http://www.kpho.com/clip/11857773/freeway-shooting-suspects-father-whoever-claims-my-son-is-the-shooter-is-a-moron

    Leslie Merritt Sr (AKA father of alleged I10 shooter). There’s a better clip on CBS this morning with a longer and better shot of him. I can’t find on the interwebs.

    Redneck tan, chest tat, barefoot, bare chested, beer gut hanging out over pants giving an interview.

    Two Thoughts

    His vote counts as much as yours.

    Can I put this on TVs in deliver rooms so every jack@$$ suburban mom who wants Jr, III, IV, V, legacy naming can see it before bestowing the nickname Trip on their son at birth. (Trip being a play on triple, short for ‘the third’, of course.)

  13. The Original NJ ExPat says:

    I don’t know about residential real estate, but I think commercial is turning a corner right now.

  14. NJT says:

    I’m so white I get sunburn after 15 minutes in the shine (pun intended).

  15. NJT says:

    #14 where?

  16. Fabius Maximus says:

    From 3:07, I always find this funny
    https://www.youtube.com/watch?v=k8TwRmX6zs4

    It puts O in perspective. It’s not so much the put down of Trump, but more about the circumstances of the speech.

    Bonus points for those that can recall the context, without having to resort to Google.

  17. But closer to half of all mortgaged homes in the two counties are underwater when factoring in owners who don’t have at least 20 percent equity roughly the amount needed to be in position to sell one home and buy another, Zillow said.

  18. All signs point to a recovering economy. Hope we don’t see another recession for the next decade. !

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