Number of Tri-Cities underwater properties increase; equity-rich properties decline

A little more than one of every four mortgaged homes in the Tri-Cities was equity rich in the fourth quarter of 2019, according to Attom Data Solutions. At the same time, a little more than one in 10 local mortgaged properties were seriously underwater. That’s an economic term, not a condition of all the rain we’re having.

An equity rich property is one with a loan with a mortgage than half or less of its estimated value. Seriously underwater is defined as a property with a mortgage that is 25% or more than its estimated value.

There was a time when several local counties had a higher share of equity rich properties than the national share. In Q4, only Johnson Co. had that bragging right. And only Sullivan and Washington counties had a smaller share of seriously underwater homes than the US share during the last three months of 2019.

It’s a mixed housing market status situation for local housing. One reason the share of equity rich properties has declined is homeowners tapped their equity to trade up or scale down with a new home. Others reinvested some of their equity on upgrades. They may be planning to sell or they’re aging in place. Even though the share has declined, there are almost 21,000 equity rich mortgaged properties in the region in Attom’s current report. And this is a region where almost half of the homes don’t have a mortgage.

The number of underwater mortgages is an economic stress signal. It doesn’t mean each and every one of those properties is headed for foreclosure. But it says the owners of almost 10,000 local properties are struggling for one reason or another.

By the way, the local foreclosure rates are less than 1 percent and at pre-recession levels.

“Homeownership continued boosting household balance sheets across the United States in the fourth quarter of 2019, as people paying off mortgages were much more likely to be in equity-rich territory than seriously underwater. That marked yet another sign of how much the country has benefited from an eight-year housing-market boom,” said Todd Teta, chief product officer with ATTOM Data Solutions. “Some big gaps in equity levels persist between regions and market segments. But as home values keep climbing, financial resources keep building for homeowners, which provides them with leverage to make home repairs, help their children through college or take on other major expenses.”



Categories: LABOR MARKET