Are you set up for success in 2016? Join 2,500 real estate industry leaders Aug. 4-7, 2015, at Inman Connect in San Francisco. Get Connected with the people and ideas that will inspire you and take your business to new heights. Register today and save $100 with code Readers.


Takeaways:

  • The number of “seriously underwater” homes nationwide has hit a plateau, while the volume of “equity-rich” mortgaged properties decreased for the second straight quarter.
  • At the end of 2Q 2015, 13.3 percent of all properties with a mortgage were seriously underwater, and 19.6 percent of all mortgaged properties had more than 50 percent equity.
  • Residential properties owned between seven and 11 years accounted for 38 percent of all seriously underwater homes.

The number of “seriously underwater” homes nationwide has hit a plateau, while the volume of “equity-rich” mortgaged properties decreased for the second straight quarter.

At the end of second-quarter 2015, there were more than 7.4 million U.S. residential properties that were seriously underwater — where the combined loan amount secured by the property is at least 25 percent higher than the property’s estimated market value.

This total represents 13.3 percent of all properties with a mortgage, according to RealtyTrac’s recently released U.S. Home Equity & Underwater Report. The total also equates to a slight increase in underwater homes when compared to the previous quarter, when there were more than 7.3 million such homes.

historical-underwater-realtytrac

During the second quarter of last year, there were approximately 9.1 million seriously underwater properties.

Markets with a population greater than 500,000 that had the highest percentage of seriously underwater properties in the second quarter of 2015 were:

  • Lakeland, Florida (28.5 percent)
  • Cleveland (28.2 percent)
  • Las Vegas (27.9 percent)
  • Akron, Ohio (27.3 percent)
  • Orlando (26.1 percent)

Other markets with a higher percentage included:

  • Tampa (24.8 percent)
  • Chicago (24.8 percent)
  • Palm Bay, Florida (24.4 percent)
  • Toledo, Ohio (24.3 percent)

RealtyTrac notes that residential properties owned between seven and 11 years accounted for 38 percent of all seriously underwater homes at the end of the second quarter.

The number of equity-rich mortgaged properties — those with at least 50 percent equity — decreased on a quarter-over-quarter basis for the second straight quarter, down to 10.9 million. This total represents 19.6 percent of all mortgaged properties.

While the quarter’s total is down from the previous two quarters, it’s also up from 9.9 million during the second quarter of 2014.

A number of markets with the highest percentage of equity-rich properties are located in California:

  • San Jose (43.8 percent)
  • San Francisco (38.3 percent)
  • Los Angeles (32 percent)
  • Oxnard (27.5 percent)
  • San Diego (26.9 percent)

Other top metros, in terms of highest percentage of equity-rich properties, include:

  • Honolulu (36.7 percent)
  • New York (30.7 percent)
  • Pittsburgh (29.4 percent)
  • Poughkeepsie, New York (28 percent)

While the overall number of equity-rich properties declined slightly quarter to quarter, the share of foreclosures with positive equity increased to 42.4 percent. In comparison, 34.1 percent of foreclosures had positive equity during the second quarter of 2014.

Major markets where the share of distressed properties with positive equity exceeded 60 percent included:

  • Denver (83.7 percent)
  • Austin (83.1 percent)
  • Honolulu (77.5 percent)
  • San Jose (77 percent)
  • Pittsburgh (75.9 percent)
  • Jackson, Mississippi (75 percent)

Email Erik Pisor.

Show Comments Hide Comments

Comments

Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
Success!
Thank you for subscribing to Morning Headlines.
Back to top
Inman Connect Las Vegas is back and there are only a few presale tickets left! Register today before they're gone.REGISTER×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription