SEATTLE, Sept. 3, 2015 /PRNewswire/ -- The U.S.
negative equity rate dropped below 15 percent in the second quarter
of 2015, according to the Zillow® Negative Equity
Reporti, but nearly 20 percent of condo-owners remain
underwater.
Condo-owners were in far worse shape than single-family
homeowners in Chicago,
Orlando and Las Vegas. And in only three markets –
Detroit, Memphis, and Pittsburgh – single-family homeowners were
more likely to be underwater than condo-owners.
A high rate of homeowners who owe more on their mortgages than
their homes are worth is a lingering effect of the real estate
crisis. At its worst, more than 15 million homeowners were upside
down on their homes. Foreclosures, short sales and rapidly rising
home values freed nearly half of those homeowners, leaving 7.4
million homeowners upside down at the end of Q2 2015.
The continued decline of the overall negative equity rate was
fueled in the first half of the year by strong appreciation for the
least valuable third of homes. The least valuable homes are much
more likely to be underwater than more valuable
homesii.
In the Atlanta market, for
example, nearly 43 percent of the least valuable homes are in
negative equity, while only 9.4 percent of high-end homes are
underwater. Annual home value appreciation among the least valuable
homes in Atlanta had slowed for 12
straight months through June 2015.
However, low-end homes have been appreciating annually more than
more valuable homes. Since June 2014,
annual appreciation in the bottom tier outpaced home value
appreciation among all Atlanta
homes, likely helping drive negative equity down there from 29
percent to 21 percent year-over-year.
Similar trends played out in Sacramento, Riverside, and Phoenix, all places that have struggled with
high rates of negative equity.
"If the overall negative equity rate is going to continue to
fall, it will need to keep being driven down by improving health at
the bottom end of the market," said Zillow Chief Economist Dr.
Svenja Gudell. "The least valuable
homes really bore the brunt of negative equity during the
recession, and that's where most negative equity remains
concentrated today. As more first-time buyers enter the market
seeking these less expensive homes, home value growth at the bottom
end could continue to outpace growth overall, which will be good
news for millions of underwater homeowners in these homes."
Among the 35 largest housing markets, Las Vegas, Chicago and Atlanta continued to have the highest rates of
homeowners in negative equity. Condo-owners had the highest rates
of negative equity in Las Vegas
(36.7 percent), Chicago (32.6
percent), and Orlando (29.9
percent), while single-family homeowners had the highest rates in
Las Vegas (23.8 percent),
Atlanta (20.4 percent) and
Chicago (19.2 percent).
Metro
Area
|
Q2 2015 Negative
Equity Rate
|
% Change in Number
of Homes in Negative Equity From Q2 2014 to Q2 2015
|
Q2 Negative Equity
Rate for Condos
|
Q2 2015 Negative
Equity Rate for Bottom-Tier Homes
|
United
States
|
14.4%
|
-19.3%
|
19.3%
|
24.0%
|
New York-Northern New
Jersey
|
12.0%
|
-17.1%
|
12.6%
|
23.4%
|
Los Angeles,
CA
|
7.8%
|
-25.3%
|
10.1%
|
12.2%
|
Chicago,
IL
|
22.0%
|
-17.8%
|
32.6%
|
|
Dallas-Fort Worth,
TX
|
6.2%
|
-38.7%
|
11.2%
|
|
Philadelphia,
PA
|
16.9%
|
-9.2%
|
23.4%
|
32.4%
|
Houston,
TX
|
6.4%
|
-25.1%
|
14.0%
|
|
Washington,
DC
|
16.4%
|
-13.7%
|
20.2%
|
28.5%
|
Miami-Fort
Lauderdale, FL
|
16.3%
|
-25.8%
|
23.0%
|
29.9%
|
Atlanta,
GA
|
20.9%
|
-28.6%
|
27.8%
|
42.7%
|
Boston, MA
|
7.9%
|
-24.4%
|
12.9%
|
13.6%
|
San Francisco,
CA
|
5.4%
|
-37.8%
|
7.1%
|
10.9%
|
Detroit,
MI
|
18.3%
|
-24.0%
|
17.3%
|
|
Riverside,
CA
|
15.8%
|
-20.6%
|
20.5%
|
24.2%
|
Phoenix,
AZ
|
18.2%
|
-17.5%
|
26.1%
|
27.0%
|
Seattle,
WA
|
11.9%
|
-34.2%
|
20.1%
|
19.5%
|
Minneapolis-St Paul,
MN
|
13.2%
|
-21.7%
|
22.1%
|
22.9%
|
San Diego,
CA
|
8.6%
|
-26.3%
|
12.7%
|
12.7%
|
St. Louis,
MO
|
18.8%
|
-17.9%
|
24.7%
|
37.6%
|
Tampa, FL
|
17.6%
|
-25.3%
|
23.9%
|
34.1%
|
Baltimore,
MD
|
17.8%
|
-13.4%
|
24.9%
|
30.5%
|
Denver, CO
|
6.0%
|
-29.9%
|
9.9%
|
8.5%
|
Pittsburgh,
PA
|
10.2%
|
-8.8%
|
9.6%
|
20.6%
|
Portland,
OR
|
7.5%
|
-40.9%
|
15.5%
|
10.6%
|
Sacramento,
CA
|
13.0%
|
-23.8%
|
25.4%
|
20.1%
|
San Antonio,
TX
|
11.0%
|
-19.0%
|
16.7%
|
|
Orlando,
FL
|
17.8%
|
-25.8%
|
29.9%
|
31.2%
|
Cincinnati,
OH
|
15.4%
|
-18.7%
|
23.3%
|
29.3%
|
Cleveland,
OH
|
18.3%
|
-16.3%
|
22.5%
|
38.4%
|
Kansas City,
MO
|
17.9%
|
-14.9%
|
23.8%
|
|
Las Vegas,
NV
|
25.0%
|
-16.4%
|
36.7%
|
38.3%
|
San Jose,
CA
|
3.4%
|
-31.8%
|
5.1%
|
6.2%
|
Columbus,
OH
|
14.2%
|
-25.5%
|
24.6%
|
30.7%
|
Charlotte,
NC
|
12.1%
|
-34.5%
|
21.3%
|
20.0%
|
Indianapolis,
IN
|
15.0%
|
-17.1%
|
21.0%
|
|
Austin, TX
|
6.9%
|
-22.4%
|
11.0%
|
|
About Zillow
Zillow® is the leading real estate and
rental marketplace dedicated to empowering consumers with data,
inspiration and knowledge around the place they call home, and
connecting them with the best local professionals who can help. In
addition, Zillow operates an industry-leading economics and
analytics bureau led by Zillow's Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of
economists and data analysts produce extensive housing data and
research covering more than 450 markets at Zillow Real Estate
Research. Zillow also sponsors the quarterly Zillow Home Price
Expectations Survey, which asks more than 100 leading economists,
real estate experts and investment and market strategists to
predict the path of the Zillow Home Value Index over the next five
years. Zillow also sponsors the bi-annual Zillow Housing Confidence
Index (ZHCI) which measures consumer confidence in local housing
markets, both currently and over time. Launched in 2006, Zillow is
owned and operated by Zillow Group (NASDAQ: Z and ZG), and
headquartered in Seattle.
Zillow is a registered trademark of Zillow, Inc.
i The data in the Zillow Negative Equity Report
incorporates mortgage data from TransUnion, a global leader in
credit and information management, to calculate various statistics.
The report includes, but is not limited to, negative equity,
loan-to-value ratios, and delinquency rates. To calculate negative
equity, the estimated value of a home is matched to all outstanding
mortgage debt and lines of credit associated with the home,
including home equity lines of credit and home equity loans. All
personally identifying information ("PII") is removed from the data
by TransUnion before delivery to Zillow. Overall, this report
covers more than 870 metros, 2,400 counties, and 23,000 ZIP codes
across the nation.
ii Homes in each metropolitan region are assigned to the
bottom, middle or top tier of homes based on their estimated home
value. Each tier contains one-third of the homes in the metro
region, and the thresholds defining each tier are computed
separately for each metro.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/low-value-homes-leading-the-climb-out-of-negative-equity-300137427.html
SOURCE Zillow