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That compares with 18.2 percent in the previous quarter. Nationwide, 22.1 percent of mortgaged properties were in negative equity.
Nevada recorded the highest rate, with 58 percent of all mortgaged properties underwater. Arizona, Florida, Michigan and Georgia followed. Washington, with 17.3 percent of properties in the negative, ranked 16th in the nation, placing it between New Hampshire and Oregon.
“I think it’s certainly a trend that’s going in the wrong direction. It’s probably as much a reflection on the overall economy as anything else,” said Mike Larson, owner-broker at Allen Realtors and president of the Tacoma-Pierce County Association of Realtors.
Statewide, 245,694 mortgages were in negative territory – from a total of 1.42 million mortgages overall in the state. Across the country, 10.7 million mortgages were underwater, from a total of 48.5 million mortgages.
“As long as there’s a reluctance or a hesitation to buy, the values are going to continue to erode. As values erode, the number of people who are upside-down will increase,” Larson said.
Many of the homeowners whose mortgages are affected purchased their properties within the past decade.
“Values have gone back to 2003 levels. The values have gone back to where pricing was eight years ago,” said Kevin Tinsley, owner of All Tech Mortgage of Lakewood.
“Anyone who purchased a home, those people are underwater,” he said, noting the number of foreclosed properties, the number of homeowners who were upside-down and “the number who can’t really sell, who don’t have any equity.”
Tinsley said he expects “another three to five years of this. I think you have to have another new base of buyers. You’ve got about five to six years that it takes for those buyers to get in and get equity; you need those people who are ready to move up,” he said.
And it’s not just the people who bought. “It’s also people who refinanced,” he said.
Still, the times are good for potential homebuyers.
“Talk about the perfect storm for a buyer,” said Larson. “There’s available money, motivated sellers and a lot of homes from which to choose.”
Rates remain historically low, hovering around 4 percent for 30-year mortgages.
“There’s not going to be a bell that rings when we hit bottom. Those who can buy now are missing out on an historic time,” Larson said.
The blame for the situation, if there is there is blame to assign, can be broadly spread, Larson said.
“Bankers who created derivatives, to appraisers that established the values that were clearly inflated and artificial, to people in my industry as well,” he said.
“Until there’s something to stimulate the housing market that gets people off the fence, it’s probably going to stay the way it is” he said.
Tinsley said there are several programs aimed at assisting people whose loans are upside-down or otherwise troubled. “FHA, VA, there’s lots of programs,” he said.
The proportion of U.S. households that own homes is at 65.1 percent, the lowest point since 1996, according to the U.S. Census Bureau. That marks a shift after nearly two decades in which home ownership grew before peaking at 70 percent during the housing boom. First-time buyers usually account for up to half of sales. Over the past year, they have accounted for only about a third.
“It’s no longer the American Dream for the younger generation,” said Dan McCue, research manager at Harvard University’s Joint Center for Housing Research.
The Associated Press contributed to this report.
C.R. Roberts: 253-597-8535
c.r.roberts@thenewestribune.com
