Vallejo area home mortgages regaining equity, still lag behind the nation

The number of home owners in Solano County still underwater with their mortgages continues falling, though it’s still higher than the national average, a new industry report shows. This means rising equity, which experts say can spur economic growth.

The most recent CoreLogic home equity report shows some 15 percent — or 13,305 — of Vallejo-Fairfield area residential properties with a mortgage were in negative equity as of the first quarter of 2015. That’s significantly lower than the 17,473, or 19.7 percent, in the same quarter last year. It’s also lower than the 14,221, or 16 percent, it was in the last quarter of 2014, according to the report.

Another 2,447 — or 2.8 percent — of properties here were in near negative equity for the first quarter of this year. This is unchanged from the end of last year and down from the 2,615 — or 3 percent — in the first quarter of last year.

“Equity recovery is well underway in Vallejo and to locals that means continued real estate market improvement. Local homeowners can feel comfortable in knowing that their values have improved over the last year and the future also looks bright,” Solano Association of Realtors President Rose Hadaway said. “As long as interest rates remain level, buyers too, can take advantage of the improvement. So it’s a win/win situation and now is the time to reap those rewards that were lost in the down market.”

CoreLogic, a leading global property information, analytics and data-enabled services provider, this week released new analysis showing 254,000 properties nationwide regained equity in the first quarter of 2015, bringing the total number of mortgaged residential properties with equity at the end of Q1 to about 44.9 million, or 90 percent of all mortgaged properties.

Nationwide, the total number of mortgaged residential properties with negative equity is now at 5.1 million, or just over 10 percent of all mortgaged properties. This is down slightly from the 5.4 million homes, or nearly 11 percent, that had negative equity in the fourth quarter of last year, a quarter-over-quarter decrease of nearly 5 percent. Compared with 6.3 million homes, or nearly 13 percent, reported for a year ago, the number of underwater homes has decreased by 1.2 million, or just over 19 percent.

Negative equity, often referred to as “underwater” or “upside down,” refers to borrowers who owe more on their mortgages than their homes are worth.

The study shows that of the more than 50 million residential properties with a mortgage nationally, some 9.7 million — or 19.4 percent — have less than 20 percent equity which is called being “under-equitied.” It also shows that 1.3 million, or 2.7 percent, have less than 5 percent equity, which is called near-negative equity. Borrowers who are “under-equitied” may have a harder time refinancing their existing homes or obtaining new financing to sell and buy another home, and those with near-negative equity are considered at risk of moving into negative equity if home prices fall, CoreLogic officials said.

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