Nevada Continues to Lead Nation in Underwater Homes - 8 News NOW

Nevada Continues to Lead Nation in Underwater Homes

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LAS VEGAS -- Nevada led all states and Las Vegas led all major metropolitan areas in the percentage of homes with mortgages that remained "deeply" underwater as of December, RealtyTrac reported Wednesday night.

The real estate analytics company from Irvine, Calif., reported that 38 percent of such homes statewide and 41 percent in the Las Vegas area had mortgage debt that was at least 25 percent higher than the value of the residences.

That translated to 282,261 such homes in Nevada and 230,884 in the Las Vegas area. In comparison only 72,239 homes with mortgages statewide and 47,450 in Southern Nevada represented situations where the homeowner owed no more than half the value of the residence, meaning they had at least 50 percent equity.

The underwater percentages, though, represent an improvement from the lowest point of the economic recession when roughly two-thirds of Southern Nevada homeowners with mortgages owed more than their properties were worth.

RealtyTrac also reported that 65 percent of the Nevada homes and 66 percent of the Las Vegas residences that are in some stage of the foreclosure process are deeply underwater. Those percentages were also tops among states and large metro areas respectively.

"During the housing downturn we saw a downward spiral of falling home prices resulting in rising negative equity, which in turn put millions of homeowners at higher risk for foreclosure when they encountered a trigger event such as job loss," RealtyTrac vice president Daren Blomquist said. "Now we are seeing the reverse trend: rising home prices resulting in falling negative equity, which in turn is giving millions of homeowners a lifeline to avoid foreclosure when they encounter a trigger event. On the other end of the spectrum, the percentage of equity-rich homeowners is nearing a tipping point that should result in a larger inventory of homes listed for sale and give the overall economy a nice shot in the arm in 2014.

 

"However, there are still millions of homeowners who are in such a deep equity hole that it will take years for them to regain their equity. The longer these homeowners remain in a negative equity position without relief in the form of a principal loan balance reduction, the more likely that foreclosure will become the path of least resistance for them."

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