CALIFORNIA BUSINESS MINUTE
Under Water
05-20-09
Hi, I am Tim Johnson and welcome to the California Business Minute.
The downturn in home prices has left about 20% of U.S. homeowners owing more
on a mortgage than their homes are worth, according to one new study by the
real-estate Web site Zillow.com.
The study illustrates that overall, the number of borrowers who are underwater
climbed to 20.4 million at the end of the first quarter from 16.3 million at
the end of the fourth quarter. The latest figure represents 21.9% of all
homeowners, and is up from 17.6% in the fourth quarter and 14.3% in the third
quarter.
In an article from the Wall Street Journal, Kenneth Rosen, chairman of the
Fisher Center for Real Estate and Urban Economics at the University of California,
Berkeley, said underwater estimates can be too high if they use price data that
includes a large number of foreclosures. Foreclosed homes tend to sell at a
discount, he said, making it appear that prices have fallen more than they
actually have.
Here are the numbers of the largest metropolitan areas with the highest
percentage of homes with negative equity in the first quarter of 2009:
Las Vegas 67.2%
Stockton 51.1%
Modesto 50.8%
Reno 48.5%
Vallejo-Fairfield 46.5%
Merced 44.4%
Port St. Lucie FL 43.5%
Riverside 42.8%
Phoenix 41.7%
Orlando 41.7%
I am Tim Johnson and this has been the California Business Minute.
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