South Orange County Blog from Bob Phillips

Fewer Orange County homes under water

By Jeff Collins, of the Orange County Register,  July 17th, 2012

“CoreLogic reports that the number of Orange County homeowners who owe more to their lenders than their homes are worth is shrinking, the result of rising home prices in some sectors.

But 105,251 O.C. homes still were under water as of the first quarter of the year, representing 19% of all local homes with a mortgage, the Santa Ana-based home data giant reported this week. On the up side:

  • The number of homes that were worth less than their mortgages in the first quarter shrank by 6.3% from the quarter before, down from 112,280 underwater homes in the fourth quarter of 2011.
  • The percentage of homes with a mortgage that still had “negative equity” in the first quarter dropped from 20.2% in the fourth quarter.

“Rebounding home prices, a healthier balance of real estate supply and demand, and a slowing shamre of distressed sales activitiy helped to reduce the negative equity share,” said CoreLogic Chief Economist Mark Fleming.

On the down side:

  • Almost one in five local homeowners with a mortgage owe more than their homes are worth, making it difficult for them to sell their homes and move if they want to and making the risk of losing their homes to foreclosure more likely. This market “lock down” affects housing as a whole, reducing the pool of potential move-up buyers.
  • An additional 21,728 O.C. homes are worth just 5% more than their debt, or less, making it unlikely they’d get any money from the sale of their homes after expenses and repaying the mortgage. These homes accounted for 3.9% of residences with a mortgage – unchanged from the fourth quarter of 2011.

Analysts for Zillow.com came up with similar numbers. The housing website reported in May that roughly 109,000 Orange County homes were under water in the first quarter. By Zillow’s math, one in four homes with a mortgage was under water.”  ( End of Jeff’s article.)

While Jeff points out there is a “down side” to this latest news, I would submit that even the bad news has been getting better, and that there is still plenty of good news.  Things have been getting better in the local housing market, and show plenty of signs – to ME, anyway – that they will continue to improve. Improvement is good, even if it’s a bit gradual.

Care to talk about the local housing market?  Shoot me an email, or give me a call.

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