Northbay Uprising - Information for the liberated zones of the San Pablo Bay

2011-12-02 "Majority of Solano County mortgages underwater" by Rachel Raskin-Zrihen from "Vallejo Times-Herald" newspaper
[http://www.mercurynews.com/california/ci_19456890]
Just over half of all homes with a mortgage in Solano County are underwater, according to an industry study released this week.
And that's the good news.
In the Vallejo-Fairfield Metropolitan Statistical Area, 51.1 percent of all residential properties with a mortgage -- or 46,575 properties -- were in negative equity for the third quarter of 2011. That compares to 52.9 percent, or 48,263 properties, the previous quarter.
The number of residential properties in near negative equity -- another 4.9 percent, or 4,503 homes -- remained unchanged from the year's second quarter. This means about 56 percent of Solano County homeowners are underwater or are nearly so, with less than 5 percent equity.
This doesn't surprise incoming Solano Association of Realtors President Paul Winders of Around Town Realty. Saying he was speaking only as a Realtor, Winders credits the improvement to the number of local troubled mortgages that sold for a loss or were foreclosed on in recent months.
"So many were short sold or foreclosed and therefore fell off the statistics, and a lot of new owners and investors bought at the new, lower price and may now have some equity," Winders said. ''It's a good sign and means the market is adjusting."
Though experts have predicted a real estate turnaround for years, Winders said he believes that locally the bottom has been reached and things may be heading up.
"I believe it's beginning to turn up, especially the low end... the under $175,000 range, single family homes," he said. ''The higher end, like the Vista in Vallejo and Waters End in Benicia and some of the newer homes off Redwood (Street) and Ascot (Parkway), I'm not seeing an upward surge in prices at this point."
Winders also said he believes most home sales in Solano County are being made to owner/occupants, not investors, due in part to incentives banks are offering in closing cost credits and in setting aside a time period before offering to properties to investors.
Though an improvement locally, the Vallejo-Fairfield figures keep it among the hardest hit and slowest to recover from the nationwide housing crisis.
According to industry analyst firm CoreLogic, 10.7 million, or 22.1 percent, of all residential properties with a mortgage nationwide were in negative equity at the end of the third quarter. This is down slightly from 10.9 million, or 22.5 percent, in the second quarter. Add this to the 2.4 million borrowers at near-negative equity, and it accounts for some 27.1 percent off all mortgaged residential properties. That's down slightly from 27.5 in the previous quarter.
Negative equity, or being ''underwater" or ''upside-down," means borrowers owe more on their mortgages than their homes are worth.
"Although slightly down, negative equity remains very high and renders many borrowers vulnerable when negative economic shocks occur, such as job loss or illness," CoreLogic chief economist Mark Fleming said in a statement. ''The nearly $700 billion mortgage debt overhang has touched many corners of the market, and this overhang is holding back the recovery of the housing market and broader economy."

New real estate industry report highlights [Source: CoreLogic]:
--California, which has been in the top five for negative equity since tracking started in 2009, was surpassed in the year's third quarter by Georgia, which entered the top five for the first time.
--Nevada now has the highest negative equity percentage with 58 percent of all of its mortgaged properties underwater, followed by Arizona (47 percent) and Florida (44 percent). The top five is rounded out by Michigan (35 percent) and Georgia (30 percent).
--There are 8.6 million conventional loans in a negative equity position that have an average mortgage balance of $272,000 and are underwater by an average of $70,000.
--There are 1.5 million FHA loans in a negative equity position that have an average mortgage balance of $170,000 and are underwater by an average of $26,000.