Tri-Cities underwater properties double Q2 last year’s share

The share of Tri-Cities properties rated seriously underwater by RealtyTrac’s Home Equity & Underwater Report more than doubled during Q2 compared to the second quarter of last year. During the same period the share of equity rich homes increased.

equity rich

Equity rich properties

Seriously underwater is defined as a property with a mortgage at least 25% higher than the property’s estimated value.

Equity rich is defined as a property that has a loan-to-value position of 50% or lower.


Seriously underwater properties

Before anyone starts pushing the “worried button” remember that the report looks at homes with outstanding mortgages. In most of the Tri-Cities counties nearly half of homes have no mortgage.

Nationwide the share of seriously underwater homes stood at 13.3%.

Here in the Tri-Cities the share is 10.1%.

Drilling down to the county level, the seriously underwater share of outstanding mortgages is trending higher and was in double digits for the second straight quarter in all but three counties – Sullivan, Washington TN and Unicoi.

In hard numbers the region’s seriously underwater properties totaled 9,861 compared to 4,371 during Q2 last year.

Nationwide, the universe of equity rich properties dropped to 19.6% in Q2.

All but two Tri-Cities jurisdictions were above 20%. Bristol, VA and Washington Co. VA were just under the national share benchmark.

Sullivan Co. maintained its position as the jurisdiction with the highest share of equity rich properties – 32.8%.

The number of Tri-Cities equity rich properties totaled 27,122 in Q2 compared to 23,708 during the same period last year.

“Slowing home price appreciation in 2015 has resulted in the share of seriously underwater properties plateauing at about 13% of all properties with a mortgage,” said Daren Blomquist, vice president at RealtyTrac. “However, the share of homeowners with the double-whammy of seriously underwater properties that are also in foreclosure is continuing to decrease and is now at the lowest level we’ve seen since we began tracking that metric in the first quarter of 2012.”

While average home prices in the Tri-Cities have not paced the record-setting sales pace the June average price in all but three counties is better that June last year. On an annual sales price basis the price was down 0.9% in 2014 compared to 2013. At the half-year benchmark the year-to-date average price is 3.6% better than the first six months of last year.

While the foreclosure and delinquent mortgage rates in both Tri-Cities MSAs have declined to pre-recession levels, notice of trustee sales have dramatically increased this year.

The RealtyTrac U.S. Home Equity & Underwater is a count of residential properties based on several categories of equity — or loan to value (LTV) — 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, and is also matched against record-level foreclosure data to determine foreclosure status for each equity/LTV category.


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.

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