A new report Thursday from the online real estate service Zillow finds that almost one home in 10 in San Diego is still “underwater” — valued at less than the outstanding mortgage — seven years after the Great Recession.
Zillow said 8.6 percent of San Diego-area homes overall and 12.7 percent of condominiums remained underwater in the second quarter of this year. Though high, this was less than the national average of 15 percent of all homes and 20 percent of condos.
The high rate of homeowners who owe more on their mortgages than their homes are worth is a lingering effect of the real estate crisis. At its worst, more than 15 million homeowners nationwide were upside down on their homes. Zillow noted that most of the homes still underwater are among the least expensive.
“The least valuable homes really bore the brunt of negative equity during the recession, and that’s where most negative equity remains concentrated today,” said Zillow Chief Economist Dr. Svenja Gudell. “As more first-time buyers enter the market seeking these less expensive homes, home value growth at the bottom end could continue to outpace growth overall, which will be good news for millions of underwater homeowners in these homes.”
Here’s how California’s metro areas ranked in the second quarter in terms of percentage of underwater homes:
- Riverside — 15.8%
- Sacramento — 13.0%
- San Diego — 8.6%
- Los Angeles — 7.8%
- San Francisco — 5.4%
- San Jose — 3.4%
Among the 35 largest housing markets, Las Vegas, Chicago and Atlanta continued to have the highest rates of homeowners in negative equity. Condo owners had the highest rates of negative equity in Las Vegas (36.7 percent), Chicago (32.6 percent) and Orlando (29.9 percent), while single-family homeowners had the highest rates in Las Vegas (23.8 percent), Atlanta (20.4 percent) and Chicago (19.2 percent).
