Can We Discuss Being Underwater In Your House?

Real Estate Agent with Keller Williams Realty 0575737

House In FishbowlCan we discuss being underwater in your house?

Underwater is fun in your swimming pool, diving around. NOT FUN in your house being upside down, or underwater, where what you OWE on your loan is MORE than what the house is worth. NEGATIVE EQUITY !! You feel like you are drowning.

New second quarter numbers out of researchers CoreLogic showed some "improvement" in my North Texas area of rates of houses with negative equity situations.

Dallas ws 14% of homes and Ft. Worth was 13.5% of homes, the whole DFW area IMPROVING from a year ago at 30.45%. The state of Texas comes in at 11.3%.

What about your area? Why do you need to care about this if you ARE STILL ABOVE WATER? Negative equity drives foreclosures and impedes the market recovery. Those areas with the highest negative equity have the biggest problem with foreclosures and getting housing back on track. Nationwide nearly 5 million borrowers are in severe negative equity situation. The reports say they owe a STAGGERING $766 billion more than their houses are worth. What areas are doing the worst and doing the best? Top five in each category:


  • Nevada     68.7%
  • Arizona     50.0%
  • Florida      45.4%
  • Michigan   38.0%
  • California  32.8%


  • Oklahoma       5.8%
  • New York        7.1%
  • Pennsylvania  7.3%
  • North Dakota  7.4%
  • Montana         7.7%

More than the raw numbers, look at the trends and see if your area is improving. A sign of getting out of the woods.



Re-Blogged 1 time:

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  1. Dave Halpern 08/27/2010 09:39 AM
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William J. Archambault, Jr.
The Real Estate Investment Institute - Houston, TX


Thank God for amortization!

No matter how far under water you are equity always returns. And, your home will always be paid off on the day you agree to, if you do as you said you would!

No other investment offers such sure security!



Aug 27, 2010 10:40 AM #1
William James Walton Sr.
WEICHERT, REALTORS® - Briotti Group - Waterbury, CT
Greater Waterbury Real Estate

Gary, you make a very valid point. I wonder where Connecticut is on that list.

Bill, that's true, but in too many cases it doesn't make any short-term sense to remain in a home when we really don't know when the equity will return.

Aug 27, 2010 01:43 PM #2
Steve Shatsky
Dallas, TX

Hi Gary... thanks for the snapshot of the negative equity conditions!  I have been wondering about this.

Aug 27, 2010 04:38 PM #3
Kristin Johnston - REALTOR®
RE/MAX Realty Center - Waukesha, WI
Giving Back With Each Home Sold!

I would love to know how WI ranks in there.....we are somewhat insulated, so that is always helpful....

Aug 28, 2010 03:27 AM #4
Sandy Shores FL Realtor®, Melbourne Real Estate
M & M Realty of Brevard Inc. - Melbourne, FL
Brevard County Real Estate, Florida's Space Coast

Gary, It's no surprise that many Florida homeowners are in distress. Many are opting for short sales to try and beat foreclosure. The good news for us is that our market still has buyers that are taking advantage of the great opportunities available.  Right now we are seeing investors, vacation and second home buyers and international buyers scooping up the deals - houses typically under $150K. The first time homebuyers have tapered off quite a bit since the end of the tax credit.  Houses over $250K are sitting a bit longer and the higher the price range, the fewer buyers we are seeing.

Aug 28, 2010 08:23 AM #5
Holly Weatherwax
Associate Broker, Momentum Realty - Reston, VA
A Great Real Estate Experience

The issue I have with being underwater is that unless you need to sell (moving, loss of job, other hardship), it is not something to worry about--as long as you can afford the payments that you signed up for! I think too many people are panicking about this.

Aug 29, 2010 02:29 AM #6
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Gary Woltal

Assoc. Broker Realtor SFR Dallas Ft. Worth
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