Cleveland, Las Vegas, Akron Post Highest Share of Seriously Underwater Properties;
San Jose, San Francisco, Honolulu Post Highest Share of Equity Rich Properties
IRVINE, Calif. — May 4, 2017 — ATTOM Data Solutions, curator of the nation’s largest multi-sourced property database, today released its Q1 2017 U.S. Home Equity & Underwater Report, which shows that as of the end of the first quarter of 2017 there were nearly 5.5 million (5,497,771) U.S. properties seriously underwater — where the combined loan amount secured by the property was at least 25 percent higher than the property’s estimated market value — up from 5.4 million seriously underwater properties in Q4 2016 but still down by more than 1.2 million from the 6.7 million seriously underwater properties in Q1 2016.
The 5.5 million seriously underwater properties at the end of Q1 2017 represented 9.7 percent of all U.S. properties with a mortgage, up from 9.6 percent in Q4 2016 but down from 12.0 percent in Q1 2016.
The report is based on publicly recorded mortgage and deed of trust data collected and licensed by ATTOM Data Solutions nationwide along with an industry standard automated valuation model (AVM) updated monthly in the ATTOM Data Warehouse of more than 150 million U.S. properties (see full methodology below).
“While negative equity continued to trend steadily downward in the first quarter, it remains stubbornly high in often-overlooked pockets of the housing market,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “For example, we continue to see one in five properties seriously underwater in several Rust Belt cities along with Las Vegas and central Florida. Additionally, close to one-third of homes valued below $100,000 are still seriously underwater.
“Several of the cities with the biggest quarterly increases in underwater properties saw a corresponding increase in share of distressed sales in the first quarter, creating a drag on overall home values, and in the case of Baton Rouge that increase in distressed sales may be in part attributable to the catastrophic flooding there in August 2016,” Blomquist noted. “Across the country, the share of seriously underwater homes was higher in high-risk flood zones.”
Baltimore, McAllen, Cleveland, post biggest quarterly increases in underwater homes
Among 88 metropolitan statistical areas with a population of at least 500,000 and sufficient home value and loan data, those with the biggest quarterly increase in the number of seriously underwater homes were Baltimore, Maryland (up 26,974); Philadelphia, Pennsylvania (up 8,919); McAllen, Texas (up 7,746); Cleveland, Ohio (up 7,631); and St. Louis, Missouri (up 6,844). All five of these markets saw the number of seriously underwater properties still decline from a year ago.
Other metro areas with a quarterly increase in underwater properties ranking among the top 10 were Columbus, Ohio; New York, New York; Milwaukee, Wisconsin; Baton Rouge, Louisiana; and Cincinnati, Ohio. Half of the top 10 metros with the biggest quarterly increase in the number of seriously underwater properties also saw an annual increase in the share of distressed sales in Q1 2017: Philadelphia, Cleveland, Columbus, New York and Baton Rouge.
Number of equity rich properties increases nearly 1.4 million from year ago
The report also found that as the end of Q1 2017, there were more than 13.7 million (13,718,473) equity rich U.S. properties — where the combined loan amount secured by the property is 50 percent or less than the estimated market value of the property — representing 24.3 percent of all U.S. properties with a mortgage. That was down from nearly 13.9 million equity rich properties representing 24.6 percent of all properties with a mortgage in Q4 2016, but it was up by nearly 1.4 million from a year ago, when there 12.4 million equity rich properties representing 22.0 percent of all properties with a mortgage as of the end of Q1 2016.
Historical U.S. Underwater & Equity Rich Trends
U.S. Properties Seriously Underwater
|% Seriously Underwater||
U.S. Properties Equity Rich
|% Equity Rich|
Nevada, Ohio, Illinois post highest share of seriously underwater properties
States with the highest share of seriously underwater properties as of the end of Q1 2017 were Nevada (18.9 percent); Ohio (17.1 percent); Illinois (16.5 percent); Louisiana (16.4 percent); and Missouri (14.5 percent).
Among 88 metropolitan statistical areas with a population of at least 500,000 and sufficient home value and loan data, those with the highest share of seriously underwater properties as of the end of Q1 2017 were Cleveland, Ohio (22.9 percent); Las Vegas, Nevada (22.1 percent); Akron, Ohio (20.3 percent); Dayton, Ohio (20.3 percent); and Toledo, Ohio (20.0 percent).
Other metros in the top 10 for highest share of seriously underwater homes were Baton Rouge, Louisiana (19.7 percent); Detroit, Michigan (17.1 percent); Chicago, Illinois (16.4 percent); Lakeland, Florida (16.2 percent); and St. Louis (15.3 percent).
Hawaii, California, New York post highest share of equity rich properties
States with the highest share of equity rich properties were Hawaii (38.4 percent); California (35.8 percent); New York (34.6 percent); Vermont (32.8 percent); and Oregon (31.3 percent).
Among 88 metropolitan statistical areas with a population of at least 500,000 and sufficient home value and loan data, those with the highest share of equity rich properties were San Jose, California (51.3 percent); San Francisco, California (46.6 percent); Honolulu, Hawaii (39.9 percent); Los Angeles, California (39.1 percent); and Pittsburgh, Pennsylvania (34.2 percent);
Other metro areas in the top 10 for highest share of equity rich properties were San Diego, California (33.6 percent); Portland, Oregon (33.6 percent); Austin, Texas (32.1 percent); Seattle, Washington (32.1 percent); and New York, New York (32.0 percent).
“While I wish the number of seriously underwater homeowners had fallen even more last quarter, the longer term data tells us that they are definitely trending lower,” said Matthew Gardner, chief economist with Windermere Real Estate, covering the Seattle market, which in the first quarter had more than 15,000 fewer seriously underwater properties and more than 57,000 additional equity rich properties compared to a year ago. “I’m expecting home prices in the Seattle area to perform well above average this year which should cause underwater homeowners to drop even further as we move through 2017. ”
Profile of seriously underwater properties
Some characteristics of the 5.4 million seriously underwater U.S. properties as of the end of 2016:
- 5 percent of non-owner occupied (investment) properties with a mortgage were underwater as of the end of Q1 2017 compared to only 7.0 percent of owner-occupied properties.
- 8 percent of properties with an estimated market value of $100,000 or less were seriously underwater compared to a seriously underwater rate of 9.3 percent for properties valued between $100,000 and $300,000; 5.0 percent for properties valued between $300,000 and $750,000; and 4.8 percent of properties valued above $750,000.
- 5 percent of properties in high-risk flood zones were seriously underwater while 9.6 percent of properties not in high-risk flood zones were seriously underwater.
- 0 percent of all properties secured by loans originated in 2006 were seriously underwater at the end of 2016, the highest share of seriously underwater of any loan vintage in the last 20 years, followed by 2007 vintage (23.8 percent seriously underwater) and 2005 vintage (21.7 percent seriously underwater).
Profile of equity rich properties
Some characteristics of the 13.0 million equity rich U.S. properties as of the end of 2016:
- 7 percent of non-owner occupied (investment) properties with a mortgage were equity rich as of the end of Q1 2017 compared to 23.6 percent of owner-occupied properties.
- 4 percent of properties located in high-risk flood zones were equity rich as of the end of 2016, compared to 13.0 percent of properties not located in high-risk flood zones.
- 7 percent of properties with an estimated market value over $750,000 were equity rich, compared to an equity rich rate of 29.5 percent for properties valued between $300,000 and $750,000; 20.8 percent for properties valued between $100,000 and $300,000; and 15.4 percent for properties valued up to $100,000.
- 0 percent of all properties secured by 1998 vintage loans were equity rich at the end of 2016, the highest share of equity rich of any loan vintage in the last 20 years, followed by 1999 vintage (44.5 percent equity rich) and 2000 vintage (40.6 percent equity rich).
The ATTOM Data Solutions U.S. Home Equity & Underwater report provides counts of residential properties based on several categories of equity — or loan to value (LTV) — at the state, metro, county and zip code level, along with the percentage of total residential properties with a mortgage that each equity category represents. The equity/LTV calculation is derived from a combination of record-level open loan data and record-level estimated property value data.
Seriously underwater: Loan to value ratio of 125 percent or above, meaning the homeowner owed at least 25 percent more than the estimated market value of the property.
Equity rich: Loan to value ratio of 50 percent or lower, meaning the homeowner had at least 50 percent equity.
About ATTOM Data Solutions
ATTOM Data Solutions is the curator of the ATTOM Data Warehouse, a multi-sourced national property database that blends property tax, deed, mortgage, foreclosure, environmental risk, natural hazard, health hazards, neighborhood characteristics and other property characteristic data for more than 150 million U.S. residential and commercial properties. The ATTOM Data Warehouse delivers actionable data to businesses, consumers, government agencies, universities, policymakers and the media in multiple ways, including bulk file licenses, APIs and customized reports.
ATTOM Data Solutions also powers consumer websites designed to promote real estate transparency: RealtyTrac.com is a property search and research portal for foreclosures and other off-market properties; Homefacts.com is a neighborhood research portal providing hyperlocal risks and amenities information; HomeDisclosure.com produces detailed property pre-diligence reports.
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