Portland Area Shows 8.7% Of Mortgages In Negative Equity
Portland’s Negative Equity Share Could Top 12%
In Portland-Vancouver-Beaverton, 37,065, or 8.7 percent, of all properties with a mortgage are in negative equity as of December 31, 2008 according to newly released data from First American CoreLogic. Negative equity, often referred to as “underwater” or “upside down,” means a borrower owes more on their mortgage than the home is worth.
An additional 14,598 mortgages, or 3.4 percent, are in near negative equity (these are defined as mortgages within 5 percent of being in a negative equity position), resulting in a total of 12.2 percent of all outstanding mortgages in negative equity and near negative equity for Portland-Vancouver-Beaverton.
Negative Equity Share Well Below National Average
Nationwide more than 8.3 million mortgages, or 20 percent of all properties with a mortgage, were in a negative equity position as of December 31, 2008. During the fourth quarter of 2008, a monthly average of nearly 230,000 borrowers became “upside down.” California led the way with a monthly average of 43,000 newly negative equity borrowers, followed by Texas (16,000), Nevada (15,000), Florida (14,000) and Virginia (14,000). Across the nation, the distribution of negative equity is heavily skewed to a small number of states. Nevada has by far the highest percentage of negative equity – more than half of mortgage borrowers in that state are now upside down. The average loan to value (LTV) ratio for properties with a mortgage in Nevada was 97 percent, or less than $8,000 in equity leaving the typical mortgaged homeowner with virtually no cushion for the rapidly declining home values.
Oregon Far From Being A Negative Equity Hotspot
At roughly 50,000 borrowers “underwater,” Oregon pales against California ranked first with more than 1.9 million borrowers in negative equity, followed by Florida (1.3 million) and Texas (498,000). See how fast you can spot Oregon below. Click on image to enlarge.
What does this mean for Portland’s housing market? Expect more short sales in the months ahead…
