s underwater mortgages continue to drop nationally, many Phoenix homeowners still grapple with negative equity, according to a report released this month by Zillow Inc.
The report indicated 18 percent of Phoenix homeowners had underwater mortgages ¬¬– when homeowners owe more than their house is worth– in the second quarter of 2015.
Although negative equity decreased from 22 percent since last year, Phoenix ranks sixth out of the 35 metro areas surveyed for the highest number of homeowners with negative equity, trailing behind Las Vegas, Atlanta and Chicago.
“Phoenix was definitely one of the hardest-hit markets during the housing bust,” said Svenja Gudell, Zillow’s chief economist.
Phoenix condo owners are experiencing a higher rate of negative equity than single-family homeowners.
About 26 percent of Phoenix condo owners are underwater on their mortgages, also above Zillow’s national average of 20 percent.
Because condos took a much harder nosedive after the Great Recession, it’s taking longer for values to rebound, Gudell said.
“If we go back to the high point of the underwater time period, there were just a ton of $20,000 to $30,000 to $40,000 condos being sold,” said Jim Sexton, president of the Arizona Association of Realtors. “We don’t have those any more. Our prices have improved in some areas significantly.”
Zillow splits data into three tiers based on estimated home values.
The bottom tier of homes, which includes low-end or “starter” residences, are more likely to have negative equity. However, these low-end homes are appreciating in value and are fueling the national decline in underwater mortgages.
Nationally, underwater mortgages dropped to 14.4 percent – the first time it’s been below 15 percent since the housing bubble burst, according to Zillow, a real-estate database company.
read more: https://cronkitenews.azpbs.org/2015/09/14/phoenix-homeowners-rank-above-average-for-underwater-mortgages-zillow-report-says/
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