RISMedia's Real Estate Magazine

MAR 2017

Real Estate magazine is the industry's leading source for real estate news and information since 1980. Published monthly by RISMedia, Real Estate magazine offers timely and relevant real estate news to the industry's top brokers and agents.

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46 March 2017 RISMedia's REAL ESTATE According to ATTOM Data Solutions' Year-End 2016 U.S. Home Equity & Underwater Report, the amount of "seriously" underwater properties in the U.S. decreased by over one mil- lion last year, while the amount of "equity rich" properties increased by 1.3 million. Seriously underwater is defined as a property with a loan-to- value ratio 25 percent or more of its fair market value; equity rich is de- fined as a property with an LTV ratio 50 percent or less. "Since home prices bottomed out nationwide in the first quarter of 2012, the number of seriously un- derwater U.S. homeowners has de- creased by about 7.1 million, an av- erage decrease of about 1.4 million each year," says Daren Blomquist, senior vice president with ATTOM Data Solutions. "Meanwhile, the number of equity rich homeowners has increased by nearly 4.8 million over the past three years, a rate of about 1.6 million each year. "Despite this upward trend over the past five years, the massive loss of home equity during the hous- ing crisis forced many homeowners to stay in their homes longer before selling, effectively disrupting the historical domino effect of move- up buyers that feeds both demand for new homes and supply of in- ventory for first-time homebuyers," Blomquist says. Approximately 10 percent—5.4 million—of all properties with a mortgage are still seriously underwa- ter, according to the report, marking the lowest level since 2012. The top five states with the most seriously underwater properties in 2016 were Nevada (19.5 percent share), Illinois (16.6 percent), Ohio (16.3 percent), Missouri (14.6. per- cent) and Louisiana (14.5 percent). The majority of the top five metro- politan areas with the most seriously underwater properties was located in Ohio: Cleveland (21.5 percent), Akron (20.1 percent), Dayton (20 percent) and Toledo (19.9 percent). The top five states with the most equity rich properties in 2016, by comparison, were Hawaii (37.8 per- cent), Vermont (36.9 percent), Cali- fornia (36 percent), New York (34.9 percent) and Oregon (32 percent). The majority of the top five metropoli- tan areas with the most equity rich properties was located in California: San Jose (51.6 percent), San Fran- cisco (47.7 percent) and Los Ange- les (39.2 percent). With this substantial reversal of trend, how long will the inventory shortage last? The drop-off dynamic of shrinking underwater properties and expanding equity could indicate the answer is sooner than expected. RE For more information, please visit www.attomdata.com. Over 1 Million Properties Shed Underwater Status in 2016 A recently released report reveals underwater properties are steadily declining, with more than one million shifting status in 2016.

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