(Source: Rachel Raskin-Zrihentimesheraldonline.com Times-Herald, Vallejo, Calif. (MCT) — About half of all residential properties with a mortgage in Solano County are underwater, about twice as many as the national figure, a new industry analysis reveals.
But that’s an improvement.
The number of homes here worth less than what’s owed on them has shrunk slightly, unlike nationally, where they rose a smidgen. But the number of mortgages approaching that situation locally — called near-negative equity — has increased some, according to Industry data analysis firm CoreLogic’s latest report released this week.
CoreLogic’s data shows that nationally 11.1 million, or 22.8 percent, of all residential properties with a mortgage were in negative equity at the end of the fourth quarter of 2011. This is up from 10.7 million properties, 22.1 percent, in the previous quarter.
On top of that, another 2.5 million borrowers in the fourth quarter had less than 5 percent equity, which is considered “near-negative.” Together, negative and near-negative equity mortgages accounted for nearly 28 percent of all residential mortgages nationwide, up from 27.1 in 2011′s third quarter.
In the Vallejo-Fairfield area, 49.7 percent, or 45,081 of residential properties with a mortgage, were in negative equity at the end of 2011, according to CoreLogic’s latest report. That compares to 51.1 percent, or 46,575 properties, in the third quarter, according to the report on negative equity data for properties nationwide.
In Solano County, another 5.1 percent, or 4,594
residential properties, were in near-negative equity for the fourth quarter 2011. That compares to 4.9 percent, or 4,503, in the previous quarter. But added together, nearly 55 percent of residential properties with a mortgage here are or are nearly underwater.
Paul Winders, owner/broker of Around Town Realty and president of the Solano Association of Realtors, said the local figures sound reasonable.
“It makes sense the total number underwater is less because a certain percentage (of those homes) foreclosed and now the new owner owes less,” Winders said. “It’s a good thing that fewer people are underwater, but the way it got that way is not that good. It would be better if values went up.”
The increase in near-negative may be explained by the fact that prices at the high and low end of the local market are still declining, he said. By high-end, Winders said he means homes costing more than $250,000 in Vallejo and more than $350,000 in Benicia.
“The very low end, condos especially, are still declining because they’re not financeable,” Winders said. “You need cash. We sold one for $16,000 last month.”
While Winders said he’s confident the Solano County real estate market will rebound eventually, he acknowledges it has a long way to climb.
“Our market was very volatile, like Arizona, Florida, Nevada, where (prices) went up so fast,” he said. “Now, homes are selling for less than what you can build them for, which is why you don’t hear the sounds of construction around much, like you used to, and those people whose jobs those were, are out of work.”
On the other hand, “there’s very little inventory now, there are few homes on the market, and a lot of interest in what’s available,” he said.
CoreLogic’s chief economist Mark Fleming has a similar take.
“While the economic recovery will reduce the propensity of the inability to pay (foreclosure) trigger, negative equity will take an extended period of time to improve, and if there is a hiccup in the economic recovery, it could mean a rise in foreclosures,” he said in a statement.
Contact staff writer Rachel Raskin-Zrihen at (707) 553-6824 or rzrihen@timesheraldonline.com.
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©2012 Times-Herald (Vallejo, Calif.)
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Source: Rachel Raskin-Zrihentimesheraldonline.com Times-Herald, Vallejo, Calif. (MCT)
