Worst markets for underwater borrowers
Homes with 'negative equity' are still a drag on the US property market.
The number of homes in negative equity has fallen as the housing market has recovered in recent years, but new data shows they're still holding back the housing rebound in some areas.
In large pockets of the country, the percentage of underwater homes — where the value of the home is less than the remaining mortgage — remains high, according to a new analysis of nationwide data from real estate data firm RealtyTrac. Although they don't bring down property values in the same way as foreclosures, they're still "hobbling" the housing recovery by keeping potential buyers stuck in the mud, the report says.
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After surveying more than 1,130 counties, RealtyTrac found 241 where over 20 percent of properties with a mortgage are seriously underwater — and 136 counties where over 25 percent of properties with a mortgage are seriously underwater (defined as a property with a loan to value ratio of 125 percent or more). These 377 counties had a combined population of nearly 130 million people. The average unemployment rate was 7.5 percent in December 2013 in the first group of counties and 7.8 percent in the latter, compared with 6.7 percent nationwide.
Here are the five counties with the highest percentage of homes seriously underwater:
- Beaufort County, N.C.: 81 percent
- Clayton County, Ga.: 57 percent
- Payne County, Okla.: 55 percent
- Modoc County, Calif.: 50 percent
- Le Flore County, Okla.: 49 percent
And here are the five counties with a population of more than 1 million people that have the highest rates:
- Wayne County, Mich.: 48 percent
- Cuyahoga County, Ohio: 41 percent
- Clark County, Nevada: 37 percent
- Cook County, Ill.: 35 percent
- Orange County, Fla.: 33 percent
"Underwater mortgages are still a problem in Florida and parts of California and Nevada where the housing bubble was most extreme," says Susan Wachter, professor of real estate and finance at The Wharton School of the University of Pennsylvania. In these areas, it's particularly likely that first-time homeowners, who would normally trade up after an average of six years, remain in their homes, reducing the number of homes available for first-time buyers. "But underwater mortgages are no longer a national problem and they no longer threaten to reverse the national recovery," Wachter says.
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The houses that are under water are the result of the 4 Ps (Piss Poor Prior Planning).
Maybe if they cut food stamps again they can balance their budget.
Note to Selt: Do not vote for Tea Party of Repulican candidates in any of listed states above. Oh ya! All states, except Illinois, have Republican legislatures and govenors>