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Submarine Housing Markets: Underwater Housing Across the U.S.

“The first map above, prepared by Zara Matheson of the Martin Prosperity Institute based on data from Core Logic, shows the percentages of mortgages that are underwater across U.S. metros. Las Vegas tops the list with nearly three-quarters of all mortgages underwater. More than half of all mortgages are underwater in Stockton, Modesto, Vallejo-Fairfield, Bakersfield, and Riverside, California; Port St. Lucie, Orlando, Cape Coral, and Fort Lauderdale, Florida; Phoenix, and Reno. In Miami, Tampa, and Detroit, more than 45 percent of all mortgages are underwater.” The above map clearly shows where the real negative equity is. The entire state of California and Florida is virtually in a deep negative equity position. Is this only a big state problem? Actually it isn’t. If we take a look at Texas some of the worst negative equity regions there have 5 to 15 percent negative equity. This isn’t to say that they were completely immune but clearly being a big state doesn’t mean you’ll be underwater. One thing Texas had was stricter regulations on home equity loans that kept people from using their homes like piggybanks and depleting their already built home equity. The worst market in terms of negative equity is Las Vegas. Nearly 73 percent of all loans are underwater! This is simply incredible. Much of the Las Vegas bubble was built from home equity from places like California. That is why the market has taken a bigger hit than California. I wanted to break down the actual data from the above article even further. There are 7 statistical areas from the CoreLogic report that actually have a negative balance for the entire market. These are the negative equity epicenters:

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