A steady increase in home values has helped rebuild lost equity and reduce the number of “underwater” mortgages across South Florida.
As of the fourth quarter of 2013, 24.2 percent of Palm Beach County homeowners with a mortgage owed more than the properties were worth -- down from 37.1 percent a year earlier, according to Zillow.com, a real estate website.
In Broward County, the so-called negative equity rate dropped to 25.3 percent from 39.1 percent. The national rate is 19.4 percent.
Roughly half of Palm Beach County’s 60,400 underwater mortgage holders are relatively close to breaking even, though 20.6 percent still owe more than double what the properties are worth, Zillow said.
The trends are similar in Broward, which has 84,314 homes worth less than the mortgages.
“I think negative equity will still be with us for at least the next five years,” said Svenja Gudell, the firm’s director of economic research.
Most underwater borrowers bought or refinanced their properties from 2004 to 2006, before values plummeted in the housing crash.
These owners were stuck in their homes, unable to sell without bringing money to the closing table. But that’s changing as home prices rise.
‘You heard a lot of people say, ‘I want to be able to sell, but I can’t move yet,’” said xxx xxxxxx, a real estate agent for xxxxxx xxxxx in South Florida. “But now they’re more energized and rejuvenated.
“They know they have a shot, and it’s worth it to go out and start looking.”
Gudell expects negative equity to continue declining this year, but she said the rate of improvement will slow as foreclosure activity subsides.
Buyers who scoop up foreclosed homes help clear the market of underwater mortgages, Gudell said.
© 2014 Sun-Sentinel®
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The Metro Home Prices Report
from the National Association of Realtors
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