In the midst of the recession and just after, Pierce County topped a state list that no one wanted to be on.
By the start of 2012, half of all homeowners in the county were underwater on their mortgages, according to data from real estate data company Zillow.
But as the region climbs out of that economic hole, home values do too. As a result, far fewer borrowers have negative equity — what the real estate industry defines as borrowers owing more than their homes are worth.
Data from the end of last year show more borrowers in 12 other counties have negative equity. In Pierce and Thurston counties, nearly 13 percent of borrowers in each county were underwater on their homes. Topping the list was Lincoln County at 23 percent.
Nearly 8 percent of borrowers are underwater in King County.
None of this surprises Peter Orser, the director of the Runstad Center for Real Estate Studies at the University of Washington.
A year ago, Orser would have said home sales were on fire in Seattle — within a three-mile radius of the Space Needle.
“I am now starting to see signs of an extraordinary pent-up demand,” Orser said. While that’s mostly up north, he said communities in Pierce and Snohomish counties are starting to feel the heat.
I am now starting to see signs of an extraordinary pent-up demand.
Peter Orser, the director of the
More people whose wages top $100,000 are moving to the Seattle area, he said. Think Amazon and other high-tech posts. Others who don’t earn as much are looking farther afield, which drives up property values in outlying areas.
“We’re trading travel time for affordability again,” Orser said. “That’s where we were prior to the recession.”
Since 2012, the bottom of the market, the median value of Tacoma homes sold has increased by more than a quarter. That’s still 7 percent down from the peak of $240,917 in summer 2007, and Olympia is down by the same margin. Seattle, meanwhile, has seen median home values climb by nearly a quarter since the bottom of the recession, to $533,000 in March.
$223,758Median price for homes sold in Tacoma in March, according to Zillow
$227,718Median price for homes sold in Olympia in March, according to Zillow
People who remain underwater are likely those who bought near the peak of the market just before the crash, Orser said.
“The people that are still being hurt are the ones that bought at zero down, zero documentation of income and zero credit check,” he said. “Those are the mortgages that are going to be underwater because of the mortgage practices before the recession.”