More than 27,000 homeowners in region have 'underwater' mortgages

Posted March 5, 2009

— More than 27,000 home owners with mortgages across the Triangle and Fayetteville have mortgages that are higher than their homes. And another 20,000 have properties that are close to being “underwater” or “upside down” in value.

Those are the grim statistics from analysis firm First American CoreLogic. Falling sales are pushing more home values in the Triangle region and across the country below the mortgages that are owed – thus the terms underwater and upside down.

More than 13 percent of homeowners in Raleigh-Cary, 16 percent in Durham and 20 percent in Fayetteville have mortgages that are underwater.

Not only are homes selling for less, but fewer are being sold, according to new data from the North Carolina Association of REALTORS.

Nationally, more than 8.3 million homes, or 20 percent of properties with a mortgage, are underwater, California-based CoreLogic reported. Another term used for such mortgages is “upside down,” meaning the owner owes more than the home is worth.

Equity in another 700,000 properties is within 5 percent of the mortgage amount, falling into a category the company calls “near negative equity.”

CoreLogic’s data is based on mortgage information about 45 million single-family homes across the U.S.

“The accelerating share of negative equity, combined with deteriorating economic conditions, means that mortgage risk will continue to increase until home prices and the economy begin to stabilize,” said Mark Fleming, chief economist at CoreLogic.

In Raleigh-Cary, CoreLogic reported that 17,208 properties are underwater. That’s 7.6 percent of the homes in the firm’s data.

Another 12,687, or 5.6 percent, are at near-negative equity.

The numbers are worse in both Durham and Fayetteville.

According to CoreLogic, 5,152 homes, or 9.9 percent, are upside down in value. Another 3,202 are near negative.

In Fayetteville, 4,812 homes, or 11.1 percent, are underwater, CoreLogic reported. Near-negative properties number 4,093 or 9.4 percent.

The housing market in the Triangle, Fayetteville and across the state fell further in January.

According to the N.C. REALTORS data, only 879 existing and new homes were sold in the Triangle. That total is a 43 percent plunge from the 1,553 sold in January 2007 and is a 19 percent drop from last December when 1,089 homes were sold.

Housing values also fell, declining to $224,831. That’s a 4 percent drop from January 2007.

In Fayetteville, January existing home sales fell 28 percent from a year ago to 278. Home values did increase slightly by $575 to $118,750 from the previous year.

Across the state, home sales declined 36 percent in January to 4,044 from 6,363 a year earlier. Housing values fell 10 percent to $192,537.


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  • davidbh61255 Mar 6, 2009

    The financial industry should be charged with ECONOMIC TERRORISM for changing the system to buy property so easily and then bundling it up and getting its bond rating changed from B to AAA!Yes the people cannot trust the powers that be in the world of high finance. It is obvious that if left to their own devices,{Bush] they will circumvent the rules, reg's and laws! If we NATIONOLIZE 1or 2 banks or investment houses the rest will fall in line! And please don't treat these CRIMINALS,better than any other criminal![madoff]

  • lilloan Mar 5, 2009

    This doesn't have anything to do with affordability and people qualifying for mortgages they had no business tackling. This is about supply and demand and there is absolutely no demand at the moment. I purchased my house in Holly Springs in 09/06 when the average on market period was 3.5 is now over 13 months in my neighborhood and homes that were selling for 15% over tax value are now selling for almost 10% under tax value. Not to mention there are two houses in foreclosure due to layoffs because the owners were unable to even short-sell in time. Values are getting ready to go down further, especially if another home or two enters foreclosure. Must be nice to be able to refinance to such fantastic rates....but I just went from $25K in equity to about $500 in a year!

  • foetine Mar 5, 2009

    The McMansion market in this area is taking a major hit. You can buy a house for less than the cost to rebuild it because they just aren't moving. Drive down St. Mary's/Old Lassister Mill Road and see all the houses squeezed on the street and guess how long they've been on the market.

  • meh_whatever Mar 5, 2009

    The upside down thing only matters if you're trying to sell your house... or I suppose, get it refinanced.

    If you went for a fixed rate and affordable payments to begin with, odds are less likely that you're in a fix, unless you got laid off (or if a couple, you both got laid off). Still, seems that everyone deserves a re-evaluation for tax purposes, if the values of homes have decreased by that much.

    Not everyone who is in trouble bought a gigantic, expensive house... some just bought a house that was reasonable, until they had no job and no way to pay for it.

    These things happen when there's a depression.

  • superman Mar 5, 2009

    This is absolutely no different than people who have automobile loans. When you buying a house there is always a remote possibility that they could be worth less. People bought when prices were high and now they crying cause the value is less. But in reality the value has nothing to do with anything unless you trying to sell it. If you bought more than you could afford and now find yourself in a financial bind-- thats your fault. Don't you just hate to hear grown people cry!

  • Usually_right Mar 5, 2009

    That means that our property taxes should go down too, right?

  • cartman Mar 5, 2009

    Where are all these underwater people coming from? I live in Wake county, and just refinanced my house (Yippee for the lower interest rates), so I had it appraised. It's worth more today than when I bought it 3 years ago. The other houses in my neighborhood are similar, so where is the big drop in the area?

    As a side note, I think people got themselves into this mess. Just because a bank or mortgage broker tells you they will give you a loan for a $500,000 house, when you only make $50,000 a year you have to realize that you can't afford it. People need to take some accountability for their actions.

  • BULLDOZER Mar 5, 2009

    Everyone reading this , when you get your 2009-2010 tax bill for your home, needs to request an adjustment of value. You are entitled to contest the value assessed within 60 or 90 days of receiving the bill. Let's slow the system down for those tax Nazi's and reclaim our rights.

  • Gatsby Mar 5, 2009

    The lesson a generation is learning about now is that your home is a place to live...Period.

    It is not a personel ATM machine...Its not a get rich quick pump & dump or a good investment. Just ask any renter if they would rather be paying rent this month or trade places with some of these people "upside down" in a cold Mcmansion.

    We must never forget the trouble home cheerleaders got us into by pumping real estate and encouraging flipping...Never again

  • Sidekick Mar 5, 2009

    I paid 30 years on my mortgage. Now my house is worth less than what I paid for it. Can I get a rebate?