Arizona has 3rd most home owners underwater

Nevada, Florida and Arizona are the top three states with homes that have negative equity. However, on a national scale, eighty nine percent of American homeowners have properties with a mortgage — or about 44.5 million — had equity by the end of the fourth quarter of 2014, according to CoreLogic.

If the housing market continues at a steady pace and home prices rise by 5 percent this year, an additional 1 million home owners currently in negative equity could come back into the black by the end of 2015.

A large percentage of properties with equity are found at the high end of the housing market, according to the report. In detail, 94 percent of homes valued at more than $200,000 have equity compared with 84 percent of homes valued less than $200,000.
While more home owners are regaining equity overall, the number with negative equity is still high.

“Negative equity continued to be a serious issue for the housing market and the U.S. economy at the end of 2014, with 5.4 million home owners still underwater,” says Anand Nallathambi, president and CEO of CoreLogic. “We expect the situation to improve over the course of 2015.”

The states with the highest number of properties in negative equity in the fourth quarter were:

Nevada: 24.2%
Florida: 23.2%
Arizona: 18.7%
Illinois: 16.2%
Rhode Island: 15.8%

On the other hand, the following states had the most homes with (positive) equity:

Texas: 97.4%
Alaska: 97.2%
Montana: 97%
Hawaii: 96.3%
North Dakota: 96.2%

Many homeowners are taking the opportunity now to sell their home after years of waiting for market values to come back. Some are looking at avenues other than the traditional real estate agent to sell their home, such as cash investors that buy houses or the We Buy Houses property investor groups that save homeowners time and a lot of fees. Another reason buyers are looking at avenues other than a real estate agent to sell their house, “They got us into this mess in the first place, didn’t they?” said one unhappy Phoenix resident. “I’d rather sell my house fast, without the agent fees, ongoing mortgage, maintenance and hassle.”

Investors particularly in areas such as Phoenix, Arizona and across Florida, Nevada and Illinois are seeing a rise in home sellers looking to forgo the real estate agent and happy to sell their homes to local investors. They find that homeowners are more than happy to  cash out of their homes quickly and not risk a sudden market correction, which some analysts are predicting.

Whatever the case may be, it seems to be further proof that the U.S. housing market has well and truly hit the bottom and is now continuing to climb out of the serious predicament it found itself in since the 2008 housing bubble.


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