Thursday, May 24, 2012

Zillow: 29% of homes underwater in Denver area


29 percent of homeowners with mortgages have negative equity in their homes. According to a report released today by Zillow, that percentage is down a bit from the fourth quarter of 2011 when the percentage of mortgaged homes that were underwater was 30.2 percent. Among the homeowners who were underwater, 6.1 percent were 90 days or more delinquent.

Nationwide, the percentage of homes that are underwater is 31.4 percent, and 10.1 percent of the underwater homeowners are 90 days or more delinquent.

See below for the list released today by Zillow.

Zillow's number for underwater homes are considerably higher than the numbers put out recently by Corelogic. Corelogic's numbers, which measure the state as a whole as opposed to the metro Denver area, during recent quarters estimate that about 21 percent of mortgaged homes in Colorado are underwater.

Since statewide averages tend to be heavilty influenced by Denver metro trends, it stands to reason that there is a significant variation between Zillow's numbers and Corelogic's numbers for metro Denver.

Zillow also provided county level data. There are few surprises here. The counties with some of the highest foreclosure rates in recent years have some of the highest numbers for underwater homes, while some of the areas with the lowest foreclosure rates have some of the lowest numbers for underwater homes.

Adams 42%
Arapahoe 35%
Boulder 13%
Broomfield 15%
Denver 29%
Douglas 20%
El Paso 31%
Jefferson 22%
Larimer 16%
Mesa 41%
Pueblo 35%
Weld 35%

Some info on some non-metro counties was provided as well. Garfield county, for example had an underwater rate op 45%, according to Zillow.

The full press release is below.




Despite Home Value Gains, Underwater Homeowners Owe $1.2 Trillion More than Homes' Worth

But Negative Equity is a Paper Loss for Most, As 90% of Underwater Homeowners Pay Mortgage on Time

Key facts:

- Nearly 16 million homeowners were underwater on their mortgages in the first quarter of 2012, owing a collective $1.2 trillion more than their homes were worth. That is nearly one-third (31.4 percent) of U.S. homeowners with mortgages, compared to 31.1 percent in the fourth quarter of 2011.

- Foreclosure is not imminent for most underwater homeowners. Nine out of 10 continue to make their mortgage and home loan payments on time, with only 10.1 percent more than 90 days delinquent.

- Many homeowners in negative equity are not deeply underwater. Nearly 40 percent of underwater homeowners owe between 1 and 20 percent more than their home is worth. However, 15 percent of underwater homeowners - approximately 2.4 million - owe more than double what their home is worth.

- In some markets, however, the magnitude of negative equity is much greater. In the Las Vegas metro area, more than one-quarter of all homeowners with mortgages owes more than double what their home is worth.

SEATTLE, May 24, 2012 /PRNewswire/ -- Nearly one-third (31.4 percent) of U.S. homeowners with mortgages - or 15.7 million - were underwater on their mortgage in the first quarter of 2012, despite rising home values, according to the first quarter Zillow® Negative Equity Report[1]. Collectively, underwater homeowners owed $1.2 trillion more than their homes were worth. Negative equity rose slightly from 31.1 percent in the fourth quarter, and declined from 32.4 percent one year ago.

Negative equity remained high despite increasing home values in the latter part of the first quarter. A slower pace of foreclosures after the robo-signing issues of 2010 contributed to slower progress in working down negative equity. Foreclosures cause homes to come out of negative equity when a bank or third party takes ownership.

Despite the high rate of negative equity, the majority of underwater homeowners are current on their mortgages. Nine in 10 continue to make their mortgage and home loan payments on time, with just 10.1 percent of underwater homeowners more than 90 days delinquent.

"While it was disappointing to see negative equity numbers remain so high, it is important to note that negative equity remains only a paper loss for the vast majority of underwater homeowners," said Zillow Chief Economist Stan Humphries. "As home values slowly increase and these homeowners continue to pay down their principal, they will surface again.

"That said, negative equity remains an issue for the housing market as a whole, and poses a risk to any recovery. Not only does negative equity tie many to their homes, by making homeowners unable to move when they may want to, but if economic growth slows and unemployment rises, more homeowners will be unable to make timely mortgage payments, increasing delinquency rates and eventually foreclosures."

Additionally, many homeowners in negative equity are not deeply underwater. Nearly 40 percent of underwater homeowners, or 12.4 percent of all homeowners with a mortgage, owe between 1 and 20 percent more than their home is worth. An additional 21 percent of underwater homeowners, or 6.6 percent of all homeowners with a mortgage, owe between 21 and 40 percent more than their home is worth.

However, about 2.4 million, or 4.7 percent of all homeowners with mortgages owe more than double what their home is worth. In the Las Vegas metro area, nearly 90,000, or 26.8 percent of homeowners with mortgages owe double.

On a state level, Nevada has the highest percentage of negative equity, with 66.9 percent of all homeowners with mortgages underwater. Arizona (52.3 percent), Georgia (46.8 percent), Florida (46.3 percent) and Michigan (41.7 percent) also have highest percentages of homeowners in negative equity.

These results are from the first edition of the new Zillow Negative Equity Report, which looks at current outstanding loan amounts for individual owner-occupied homes and compares them to those homes' current estimated values. Loan data are provided by TransUnion®, a global leader in credit and information management. This is the only report that uses current outstanding loan balances on all mortgages when calculating negative equity. Other reports estimate current outstanding loan balance based on the most recent loan on a property (i.e., the original loan amount at time of purchase or refinance).

                         Metropolitan Area            Q1 2012:                        Q4 2011:        % of Underwater Homeowners 90 Days+
                                                                                                              Delinquent (Q1 2012)
                                           % of Homeowners w/ Mortgages in % of Homeowners w/ Mortgages in
                                                   Negative Equity                 Negative Equity
                                             ------------------------------
- -------------------------------
   United States                                                        31.4%                           31.1%            10.1%
   -------------                                                        ----                            ----                          ----
   New York                                                             21.3%                           20.1%           20.6%
   Los Angeles                                                            30%                           28.6%            12.1%
   Chicago                                                              41.1%                           39.2%            12.7%
   Dallas-Ft. Worth, Texas                                              30.7%                      29.8%             6.7%
   Philadelphia                                                           25%                           23.9%              11.2%
   Washington DC                                                        32.4%                        32%              10.6%
   Miami-Fort Lauderdale, Fla.                                          46.4%                     47%              26.8%
   Atlanta                                                              55.2%                           54.2%               8.3%
   Boston                                                                 22%                           20.7%              8.1%
   San Francisco                                                        30.7%                           29%             9.7%
   Detroit                                                              49.8%                           50.2%               6.3%
   Riverside, Calif.                                                    53.4%                           52.5%            12.3%
   Phoenix                                                              55.5%                           57.8%              9.1%
   Seattle                                                              39.6%                           38.4%              10.2%
   Minneapolis-St. Paul, Minn.                                     39.9%                       38.9%                5.2%
   San Diego                                                            35.6%                           35.2%             9.7%
   Tampa, Fla.                                                          48.3%                           48.2%            18.6%
   St. Louis                                                            30.7%                           31.1%               6.4%
   Baltimore                                                            31.4%                           29.9%              11.4%
   Denver                                                                 29%                           30.2%               6.1%
   Pittsburgh                                                           16.7%                           16.1%              5.7%
   Portland, Ore.                                                       34.3%                           34.3%              8.2%
   Sacramento, Calif.                                                   51.2%                           50.3%              9%
   Orlando, Fla.                                                        53.9%                           53.8%             19.5%
   Cleveland                                                            33.9%                           33.2%               9.1%
   Las Vegas                                                              71%                           70.2%              14.3%
   San Jose                                                             22.7%                           22.3%              10%
   Columbus                                                             34.2%                           34.4%            7.7%
   Charlotte                                                            36.6%                           36.8%              10.2%
   Virginia Beach                                                       33.2%                           32.4%             6.9%
   --------------                                                       ----                            ----                           ---
Also new this quarter, Zillow is launching a data visualization that shows levels of negative equity across the country, down to the ZIP code. The visualization can be found here: http://www.zillow.com/visuals/negative-equity/.