By DON FENLEY
TRI-CITIES, Tenn. – An equity check on mortgages shows high marks for the health of the Tri-Cities area housing market.
Compared to last year, it shows homeowners are in a much better position than they were a few years ago. The number of Tri-Cities area equity-rich mortgaged properties made a big increase from the first quarter of last year while the number of seriously underwater mortgages declined.
A short-term comparison to the previous quarter offers a similar health report card. The number of equity-rich properties declined slightly from the fourth quarter of last year, as did the number of underwater mortgages, according to Attom’s First Quarter Home Equity & Underwater Report. Attom is a leading curator of land, property, and real estate data. Local data shows the Tri-Cities area market is performing better than the national level.
Attom’s report shows an equity-rich decline in 32 states. Attom says, “The equity downturn, small as it was, stood as the latest indicator of how a decline in home prices across much of the country has started to affect homeowners following a decade-long market boom. It comes as home-seller profits have slid to their lowest point in two years.”
Locally, there hasn’t been a decline in the median existing home sales price, so the effect of the slight decline in equity-rich properties is muted. April’s median price was just below the price peak set during May last year. The performance of the move-up and luxury markets continues to outperform the local affordability market.
ttom’s assessment of the situation on the national level. “Homeowners across the US continue to sit in a far better position than they were just a few years ago, with historically elevated levels of wealth built up in their properties. However, the recent downturn in the housing market is chipping away at the bounty they reaped from a decade of price surges,” said Rob Barber, chief executive officer for Attom. “Home equity has fallen modestly amid a larger slump in profits homeowners are getting when they sell. It’s still too early to call this a long-term trend, and there are reasons to hope for a market turnaround this year. For now, though, various measures suggest that the best of the boom may be behind us.”
Equity-rich properties accounted for 47.2% mortgaged properties nationwide. Locally, 54.4% of the mortgaged properties were equity rich. With one exception, every local market included in Attom’s analysis had a higher share of equity-rich properties than the US share. The exception was Washington Co. VA, which had a 42.8% share.
The share of seriously underwater properties across the nation was 3% during the first quarter. The local average was 2.8%. Three markets – Greene, Bristol VA and Washington Co. VA – had a higher share than the US average.
An equity-rich property is defined as one with a loan to value of 50% or lower, meaning the property owner had at lease 50% equity.
A seriously underwater property is defined as one with a loan to value ratio of 125 percent or higher, meaning the property owner owed at least 25% more than the estimated value of the property.
Categories: REAL ESTATE