Ohio plagued by underwater home values

Ohio ranked No. 3 in the nation at the end of last year for states with the highest share of homeowners with mortgages that are seriously underwater, or those who owed at least 25 percent more on their mortgages than their homes were worth.

The number of seriously underwater Ohioans represented 16.3 percent of all homeowners in the state, ranking just behind Illinois, where 16.6 percent of homeowners were underwater, according to the Irvine, Calif.-based real estate data tracker ATTOM Data Solutions. Nevada has the most seriously underwater homeowners at 19.5 percent.

The Dayton metro area fared worse than the state. A total of 20 percent of Dayton-area homeowners were seriously underwater at the end of last year, ranking the local metro No. 5 among the 88 largest metro areas, according to ATTOM. In the Cincinnati metro area, which includes Butler County, 11 percent of homeowners were underwater.

Still, equity figures can be misleading if they’re not broken down by individual neighborhoods and communities within the metro area, said Karen O’Grady, a Realtor at Coldwell Banker Heritage Realtors and DABR president: “When you look south of U.S. 35, you’re going to see a lot more price appreciation in those communities than other parts of the metro area.”

Last year, the average sales price in the Dayton area reached an all-time record of $161,380 in June, according to the Dayton Area Board of Realtors.

And local home prices are expected to continue to climb across the board by at least 2-3 percent this year, O’Grady said, which should bring equity values up and help address one of the biggest problems still plaguing the housing market — a lack of available properties for sale.

“Historically, we’ve got the lowest inventory I’ve ever seen in the market, and I’ve been doing this for over 20 years,” she said. “I’m sure there are pockets of people who would like to sell if they felt they could break even or get equity out of their homes. As prices go up, you’re going to have more people saying now may be the time to sell.”

While home equity has been steadily rising since negative equity peaked in 2009, many of Ohio’s biggest housing market’s are still struggling to regain their footing in the wake of the Great Recession.

According to ATTOM, four of the top five metros, including Dayton, with the highest share of seriously underwater homeowners in the fourth quarter of 2016 were in Ohio: Cleveland (21.5 percent); Akron (20.1 percent); and Toldeo (19.9 percent).

The highest percentage of homeowners with serious negative equity were found in Las Vegas, Nev., where 22.7 percent of homeowners were seriously underwater at the end of last year.

By comparison, the total share of seriously underwater U.S. homeowners was 9.6 percent at the end of last year — the lowest level since ATTOM began tracking negative equity in 2012.

“Since home prices bottomed out nationwide in the first quarter of 2012, the number of seriously underwater U.S. homeowners has decreased by about 7.1 million, an average decrease of about 1.4 million each year,” said Daren Blomquist, senior vice president with ATTOM Data Solutions.

The number of seriously underwater U.S. homeowners has declined as prices bounce back. The median home price in the U.S. in December was $232,200, up 4 percent from a year ago and representing the 58th-straight month of year-over-year gains, according to the National Association of Realtors.

Such price appreciation helped homeowners who already had positive equity in their homes build wealth, but some areas benefited more than others, according to the ATTOM report, which also tracked the share of homeowners in each state and metro area that were equity rich, or had 50 percent or more equity in their homes at the end of last year.

The Dayton area tied for dead last with 12.8 percent of homes considered equity rich — the same share as Memphis, Tenn. — while Ohio had the fifth-lowest share of equity rich homes among all states at 15.6 percent, ATTOM reported.

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