Local equity rich properties increase, up-side down mortgages decline

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The hot housing market is making it a great time to be a homeowner in the Tri-Cities. The number of equity-rich mortgaged properties is up, and the number of upside-down mortgaged properties has declined.

“The ongoing price spikes we’re seeing help to cut down the number of seriously underwater properties and boost the level of equity-rich properties,” said Todd Teta, chief product officer with ATTOM Data Solutions, in his firm’s Q1 Home Equity and Underwater Report. “However, that may shift once the foreclosure moratorium is lifted, and that’s something we’re watching, partly because it could limit equity gains and draw people underwater. For now, though, the equity picture remains one of many signs that the long U.S. housing market boom keeps charging ahead.”

The count of equity-rich properties increased by 4,914 in the eight local counties included in the analysis accounted for 26.9% of mortgaged properties. The total was 24,548. An equity-rich property is one where the combined estimated amount of loans on the property is 50% or less of its estimated market value.

On the other side of the ledger, the number of seriously underwater properties declined by 1,625 from last year. The Q1 total was 7,236, or 7.9% of the local mortgaged properties. A seriously underwater property is one with a loan-to-value ratio of 125%, meaning the property owner owes at least 25% more than the property’s estimated value.

The improvement at both ends of the equity scale was consistent across the nation despite the fallout from the pandemic. Gains came as median home prices nationwide rose 16%, year over year, in the first quarter of 2021 and up at least 10% in most countries. The Northeast Tennessee Association of Realtors (NETAR) Home Sales Report shows the local median price was up 14.9% during the first quarter in the counties it monitors.

A separate report also notes the continued increase in mortgage delinquency rates. CoreLogic’s current loan performance report says the Johnson City metro area delinquency rate for owners who are 30 days or more behind is 5%, up from 3% last year. The Johnson City metro area includes Carter, Washington, and Unicoi counties.

The delinquency rate in the Kingsport-Bristol metro area is 5.7%, up from 4.3% last year. That metro area included Hawkins and Washington counties in NE Tenn. and Scott and Washington in SW Va.

ATTOM’s report includes eight local counties the 15 zip codes in those counties.

The county with the highest market share of equity-rich properties was Sullivan – 31%. The counties with the least percentage were Carter, Greene in NE Tenn., and Washington Co. in SW Va. Each had a total of 23%.

The county with the highest share of underwater properties was Greene – 15%. The lowest was Sullivan and Washington Co. Tenn. with 5% each.

The Q1 U.S. equity-rich rate was 31.9%. In Tennessee, it was 29.4%. None of the local counties had a higher rate than the U.S. rate.

The national underwater rate was 4.7%. In Tennessee, it was 5.5%. All the local counties had a higher rate.

The local zip code with the highest share of equity-rich properties was 37617 in Blountville and 37553 in Kingsport. Both had a 32% market share. The zip code with the lowest share was 37745 in Greeneville – 22%.

The local zip code with the highest share of underwater properties was 37743 and 27745 in Greeneville – 14%. The zip code with the lowest share of underwater mortgages was 37553 in Kingsport and 37659 in Jonesborough. Both had a market share of 3%.


Categories: REAL ESTATE