Nearly a quarter of all houses in the Richmond area were underwater or close to it in the second quarter, meaning borrowers owe more than their houses are worth, according to a report released Tuesday by CoreLogic, a California-based real estate data and analysis company.
The report showed 19.5 percent, or 44,307 of all residential properties with mortgages, were in negative equity from April through June, according to the report. An additional 6.5 percent, or 14,714, had less than 5 percent equity in their houses.
In the year-earlier period, 14.9 percent, or 33,264 of all residential properties with mortgages here, were in negative equity and an additional 6.3 percent, or 14,131, were close to being maxed out.
"There's no doubt that there are still a number of households with very little equity here, and, in many cases, no equity," said Laura Lafayette, chief executive officer of the Richmond Association of Realtors.
"Anyone who bought their house in 2007, when the market peaked, or any time between 2004 and 2007, there is a greater chance of being in a negative situation," she said.
People who are not selling their houses might have time to recover the values in their houses, Lafayette said.
The Richmond association tracks home sales, not mortgages. From that perspective, sales activity is picking up but prices still lag, she said.
Negative equity can occur because of declines in value, increases in mortgage debt or a combination of both.
In Virginia, 23.3 percent of all properties with mortgage loans, or 304,619, were underwater, and an additional 6.1 percent were near negative equity in the second quarter. That's up from 22.7 percent, or 283,498 properties, in negative equity, and 5.9 percent near negative equity in the year-earlier period,
Nationally, 22.5 percent of all residential properties, or 10.9 million, were in negative equity in the second quarter — down slightly from 23 percent in the year-earlier quarter.
Negative equity and near-negative equity mortgages accounted for 27.5 percent of all residential properties nationwide.
Nevada had the highest negative equity percentage with 60 percent of all of its mortgaged properties underwater, followed by Arizona, 49 percent; Florida, 45 percent; Michigan, 36 percent; and California, 30 percent.
Negative equity restricts the ability of borrowers to refinance. It also hurts sales, because people are unable to sell their homes without taking losses.
High negative equity is a major impediment to the housing market recovery, said Mark Fleming, chief economist with CoreLogic.
"The hardest-hit markets have improved over the last year, primarily as a result of foreclosures," he said. "But nationally, the level of mortgage debt remains high relative to home prices."
Email
Facebook
Google
Twitter
Favorites
More
Advertisement