Equity Gains for 2015
January 29, 2016
More home owners are unlocking equity, which has pushed the number of underwater properties nationwide to about half of the peak reached in the second quarter of 2012, RealtyTrac reports in its Year-End 2015 U.S. Home Equity & Underwater Report.
Profile of Underwater Properties
According to RealtyTrac, here are some characteristics of seriously underwater properties as of the end of 2015:
- 41% were non-owner occupied; 59% were owner-occupied;
- 57% had been owned 10 years or less; 43% had been owned more than 10 years;
- 63% had a loan originated in 2008 or earlier; 37% had a loan originated in 2009 or later;
- 33% of all properties valued $100,000 or less were seriously underwater; 8.7% of properties valued more than $100,000 were seriously underwater.
By the end of 2015, about 6.4 million homes – or 11.5 percent of all properties with a mortgage -- were considered “seriously underwater” – in which the loan amount is at least 25 percent higher than the property’s estimated market value. That marks half the 12.8 million –or 28.6 percent of all properties – of seriously underwater properties in the peak of the second quarter of 2012, RealtyTrac reports.
“Over the past three and a half years, the number of seriously underwater properties has been cut in half, but we continue to deal with a long tail of seriously underwater properties, and it will likely be another five years at least before most of those remaining underwater properties move into positive equity territory,” says Daren Blomquist, vice president at RealtyTrac. “At the other end of the spectrum, the growing number of equity rich properties reflects a moribund move-up market and restrained leveraging of home equity by U.S. home owners.”
By the end of 2015, about 12.6 million properties – or 22.5 percent of all properties with a mortgage -- were considered “equity rich,” having at least 50 percent equity.
Profile of Equity Rich Properties
The following characteristics were found in the 12.6 million equity-rich properties as of the end of 2015:
- 23% were non-owner occupied; 77% were owner-occupied;
- 62% of equity rich homes had been owned for more than 10 years; 38% had been owned for 10 years or less;
- 52% had a loan originated in 2009 or later; 48% had a loan originated in 2008 or earlier;
- 47% of all properties valued more than $1 million were equity rich; 21.7% of properties valued $1 million or less were equity rich.
What’s more, also by the end of 2015, 49.7 percent of all homes in foreclosure had at least some equity – a record high since RealtyTrac began tracking in the third quarter of 2013.
Tracking the Highs
The following markets – with a population of at least 500,000 -- had the highest share of seriously underwater properties at the end of 2015:
- Las Vegas, Nev.: 27.7%
- Lakeland, Fla.: 24.4%
- Cleveland: 24.2%
- Akron, Ohio: 22.5%
- Orlando, Fla.: 22.2%
On the other hand, the following markets had the highest share of “equity rich” properties as of the end of 2015:
- San Jose, Calif.: 53.7%
- San Francisco: 47.6%
- Honolulu, Hawaii: 36.7%
- Los Angeles: 35.8%
- Pittsburgh, Pa.: 35%
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Updated: December 13, 2019