Friday, September 14, 2012

Corelogic: 18.2 percent of Colorado homes with mortgages underwater

Colorado was sixteenth in the nation for the percentage of its mortgages that were underwater during the second quarter of 2012. According to a report released this week by CoreLogic, 18.2 percent of homes with mortgages in Colorado had a "negative equity share."

Of the 1.14 million mortgages outstanding in Colorado, 208,000 of them were underwater, while an additional 76,600, or 6.7 percent of them, were "near" underwater.

Nationwide, 22.3 percent of loans were underwater during the first quarter and an additional 4.7 percent were nearly so.

According to the report:

Nevada had the highest percentage of mortgaged properties in negative equity at 59 percent, followed by Florida (43 percent), Arizona (40 percent), Georgia (36 percent) and Michigan (33 percent). These top five states combined account for 34.1 percent of the total amount of negative equity in the U.S.
The bulk of negative equity is concentrated in the low end of the housing market. For example, for low-to-mid value homes (less than $200,000), the negative equity share is 32 percent, almost twice the 17 percent for borrowers with home values greater than $200,000.
Corelogic has revised its method of collecting home equity data, so comparisons with past periods should be avoided.

Revised data was provided for recent quarters, however:

Colorado Q1 - 2012  20.9%
Colorado Q4 - 2011  22.94%
Colorado Q3 - 2011  22.25%
Colorado Q2 - 2011  22.45%
Colorado Q1 - 2011  21.97%
Colorado Q4 - 2010  21.59%
Colorado Q3 - 2010  21.37%
Colorado Q2 - 2010  21.42%
Colorado Q1 - 2010  21.97%
Colorado Q4 - 2009  21.96%
Colorado Q3 - 2009  20.74%

Total percentages for mortgages with negative equity during the second quarter of this year dropped to the lowest level seen since 2009.

The second quarter's drop in the proportion of mortgages that are underwater would seem to correspond to the acceleration in home prices that has occurred in Colorado during recent months. As home prices rise, more homes rise out of negative equity territory. This will contribute toward a decline in foreclosure totals as well, although new economic disruptions, such as another global recession, could reverse the trend.