RealtyTrac: Fewer Florida Homeowners are Underwater

23.8 % of Floridians with a mortgage were seriously underwater, meaning the amount they owe on the mortgage is at least 25 % higher than their home’s current market value.

IRVINE, Calif. – April 23, 2015 – RealtyTrac's U.S. Home Equity & Underwater Report for the first quarter of 2015 finds that Florida continues to see more homeowners emerge from underwater status, where they owe more on the mortgage than their home's current market value.

According to the first quarter study, 23.8 percent of Floridians with a mortgage were seriously underwater, meaning the amount they owe on the mortgage is at least 25 percent higher than their home's current market value. That's down from 24.7 percent quarter-to-quarter and down from 31.2 percent year-to-year.

Nationally, however, the number of underwater owners grew 0.4 percentage points compared to the quarter before (Q4 2014). It's the first quarterly increase since the second quarter of 2012, but the percent is still down more than 4 percentage points year-to-year.

"At the end of 2014, we saw the lowest share of seriously underwater properties since we began tracking such data," says Daren Blomquist, vice president at RealtyTrac. "But in the first quarter, that share bumped up slightly as home price appreciation continued to slow down in many markets."

Blomquist also says more owners "have regained equity listed and sold their homes in the first quarter, cashing out on some of the home equity on the table in the U.S. housing market. The biggest change in the equity landscape nationwide was in the category of homeowners with between 20 and 50 percent equity, which saw a net decrease of nearly half a million between the end of the fourth quarter and the end of the first quarter."

That loss at the upper end impacts the underwater percentages.

"Meanwhile, most of the seriously underwater homeowners are still stuck in their homes as short sales and other foreclosure alternatives lose momentum, tilting the national home equity scales back slightly toward a higher share of negative equity," Blomquist adds.

Markets with the most seriously underwater properties

Markets with the highest percentage of seriously underwater properties in Q1 2015 were Lakeland, Florida, (28.7 percent), Las Vegas (28.4 percent), Cleveland (28.2 percent), Akron, Ohio (27.2 percent), Orlando (26.1 percent), Tampa (25.0 percent), Chicago (24.7 percent), Palm Bay, Florida (24.5 percent) and Jacksonville, Florida (24.3 percent).

Markets with distressed properties more than 50 percent underwater
Las Vegas (57.6 percent), Lakeland, Florida (55.1 percent), Cleveland (53.1 percent), Chicago (52.6 percent), Palm Bay, Florida (52 percent), Tampa (51 percent) and Jacksonville, Florida (49.4 percent).

Equity rich properties

About 19.8 percent of residential properties in the first quarter were equity rich (at least 50 percent positive equity). That's down slightly quarter-to-quarter but up 0.2 percentage points year-to-year.

Major metro areas with the highest percentage of equity rich properties were San Jose, California (43.7 percent), San Francisco, California (38.6 percent), Honolulu, Hawaii (36.2 percent), Los Angeles, California (32.2 percent), New York (31.0 percent), Pittsburgh, Pennsylvania (29.7 percent), Poughkeepsie, New York (28.3 percent), Oxnard, California (27.7 percent) and San Diego (27.0 percent).

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