Nearly 1 in 10 L.A. Mortgages Is Still "Underwater"
The bad news is that nearly one out of 10 Los Angeles area homeowners with mortgages is still "underwater," that Great Recession term that means the balance of a home loan is greater than the asset is worth.
The good news is that the number of underwater mortgages in L.A. has decreased 70 percent since their peak in early 2012.
This is all according to the latest "Negative Equity Report," released this morning by real estate website Zillow. The site says 9.3 percent of L.A. area mortgage-holders are underwater these days.
For Orange County, that figure is 6.7 percent.
But the percentage of those "unable to sell their homes for enough profit to comfortably meet expenses related to listing a home and purchasing a new one," says Zillow, is 19.5 in the L.A. metro area.
In other words, nearly one in five mortgage holders in our town are stuck in such a situation.
The site describes this scenario as being "effectively underwater," even if the folks aren't technically below the watermark.
While negative equity (being full-on underwater) has gone down in L.A., it's actually up again in 21 of the nation's top 50 metropolitan areas, Zillow says.
"That’s because low end homes—the most likely to be upside-down—are losing value," the site said in a statement.
Zillow chief economist Stan Humphries:
... Negative equity is decidedly not an equal opportunity predator, and looms larger over the bottom 10 percent of homes, where homeowners are least prepared to withstand the assault.
Even in a recovering economy, folks at the comparative bottom (the median home price in L.A. is nearly a half-million dollars) are treading water.
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