A recent report out tells the story: 38% of homes in the Ocean Beach 92107 area are “underwater” on their mortgages.
Here’s a December 2nd article by Lily Leung at the San Diego U-T:
California ranked sixth in the nation in negative equity, widely known as being “underwater” on your mortgage, based on the latest data from real estate tracker CoreLogic this week.
The third quarter was the first time the state has not been in the Top 5 since 2009, when the company started to track negative equity, a state in which a homeowner owes more on their mortgage than their home is worth.
Nevada leads the current rankings, with 58 percent of its homes being “upside-down.” Arizona (47 percent), Florida (44 percent), Michigan (35 percent) and Georgia (30 percent) follow, CoreLogic reported. The third quarter was the first time Georgia entered the Top 5.
California’s share of underwater homes with mortgages was almost 29.7 percent; the data show the state has more than 6.8 million mortgages, with more than 2 million of them in negative equity.
CoreLogic estimates more than 300,000 mortgages in California are “near negative equity,” which the firm defines as “properties in negative equity or within 5 percent of being in negative equity position.”
On a national level, 22.1 percent of homes with a mortgage were underwater at the finish of the third quarter, down from 22.5 percent in the previous quarter, based on this week’s analysis.
What does this mean? CoreLogic’s Chief Economist Mark Fleming weighed in, in a statement.
Although slightly down, negative equity remains very high and renders many borrowers vulnerable when negative economic shocks occur, such as job loss or illness. The nearly $700 billion mortgage debt overhang has touched many corners of the market, and this overhang is holding back the recovery of the housing market and broader economy.
More from No County Times:
In San Diego County, 28.3 percent of mortgages, or 167,155 homeowners, owed more in loans than their homes were worth, in the three months ending Sept. 30. This is down from 29.5 percent in the same period in 2010, but up from 28.2 percent in the three months ending June 30.
The total loan-to-value ratio of the county also got worse, as county property owners owed $179 billion dollars in loans, 71.9 percent of the value of their property, in the third quarter. During the same period in 2010, equity represented 70 percent of loans, and in the second quarter, it represented 70.8 percent of loans.
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I wonder how many of these are for properties sold in the last 5 years. It can’t be all that surprising, though. Small homes were going for $1000 PSF with little land around here just a few years ago.
Sad as it is (especially coming from someone who’s been foreclosed out of a home myself), the attendant depression in home values gives some of us hope that we might someday be able to afford to live here as more than long-term transients. I looked at a 2 bedroom condo the other day for $269K at the corner of W. Pt. Loma and Nimitz that would cost about the same as the rent on my apartment and would suit my family nicely – if deals like that are still around when my name comes off the “do not lend” blacklist next summer I’d be ecstatic to set down roots in the town I adopted several years ago…
In the 70s, I opted to buy a Rhodes electric piano to play in bands rather than make a downpayment on a condo, as many of my friends were doing. . .Sometimes, I wish I’d had more foresight back then, but I always believed I’d make a good living. . .eventually. Forty years later, I’m still renting. Sigh. I have not, however, given up hope, which I believe (naively, some of your may argue) is a powerful state-of-mine – especially when matched with action.
I believe this article leaves out an important distinction … 38% of homes WITH A MORTGAGE are underwater. There are a lot of homes in the area that are owned outright (not sure the %) and would need to be included to get the overall % of homes in the area that are underwater.