Tacoma-Lakewood area sees decline in underwater mortgages

But the local share of negative-equity loans still far higher than state and national percentages, data show

Tacoma News TribuneMarch 7, 2014 

Local real estate markets across the country are facing different realities when it comes to under-water mortgages.


The Tacoma-Lakewood area had about 15,000 fewer underwater mortgages at the end of last year than it did at the end of 2012, data released this week showed.

While that is a move in a positive direction, almost one in five local area home owners still are under water -- meaning borrowers owe more on their homes than the home is worth. That share of homeowners with negative equity, 19.2 percent, is much higher than the state and national share, according to analysis from real estate analytics firm CoreLogic.

Nationally, 13.3 percent of all home mortgages were under water in the fourth quarter of 2013. Statewide just 9.75 percent of all home mortgages had negative equity, a figure almost certainly pulled into the single digits by the rapidly appreciating market in King and Snohomish counties, the state's most densely populated area.   That 19.2 percent of all loans in Tacoma-Lakewood translates into 35,372 residential properties with negative equity, according to CoreLogic. Another 5.7 percent, or 10,600 properties, were considered near-negative equity, where the homeowner is in positive territory but only by 5 percent or less.

Properties that are near-negative equity are at risk if home prices fall. Homeowners with negative equity, if they still can afford their mortgage payment, generally are stuck.

"During 2013, more than 4 million property owners (nationally) were able to regain equity due in large part to home price appreciation," Anand Nallathambi, president and CEO of CoreLogic, said in a news release.

Other CoreLogic highlights from the last quarter of 2013:

  • Nevada had the highest percentage of mortgaged properties in negative equity at 30.4 percent, followed by Florida (28.1 percent), Arizona (21.5 percent), Ohio (19.0 percent) and Illinois (18.7 percent). These top five states combined account for 36.9 percent of negative equity in the United States.
  • Approximately 3.9 million upside-down borrowers hold mortgages without home equity loans. The average mortgage balance for this group of borrowers is $219,000. The average underwater amount is $52,000.
  • Approximately 2.6 million upside-down borrowers hold both first and second mortgages. The average mortgage balance for this group of borrowers is $293,000.The average underwater amount is $75,000.

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