Atlanta housing still leader in underwater mortgages

Underwater 2Despite several years of improvement in the housing market, metro Atlanta ranks third in the nation in the share of homeowners who still owe more on their mortgage than their homes are worth.

According to a study released today by Zillow, 17.6 percent of metro Atlanta homeowners still have negative equity, also described as being “underwater.”

That means that – at best – those owners would break even if they sold their homes. More likely, it would cost them money to sell the home. Nearly 37 percent of homeowners are effectively underwater, that is, “they don’t have enough equity to comfortably cover the costs of selling their home and buying a new one,” according to Zillow, a Seattle-based real estate data firm.

Sometimes, when a homeowner desperately wants to sell and there isn’t much hope that values will rebound soon, a bank agrees to a “short sale” in which the lender accepts whatever price the house brings in the market as payment for the mortgage.

But none of those options is attractive, so few underwater homeowners will chose to sell unless they need to. Moreover, the farther underwater, the less likely a short sale.

And nearly 15 percent of those who are underwater in Atlanta owe twice as much on their mortgage as the home is worth, Zillow said.

All of this contributes to a longstanding problem with Atlanta’s real estate market: there just aren’t enough homes for sale.

“As we move into the home shopping season, inventory is already low, and negative equity is keeping potential additional stock from becoming available,” said Svenja Gudell, Zillow’s chief economist. “Things are moving in the right direction, but some owners are still deeply underwater.”

Without a doubt, things in the region have come a long way: At one point after the housing crash, virtually all mortgages in metro Atlanta were underwater. And even two years ago, nearly one-in-three homeowners had negative equity.

Home for sale 4Atlanta’s housing market was among the hardest-hit in the crash and recession. And Atlanta’s improvement has paralleled the advance of other markets.

Now, only Las Vegas and Chicago have a higher share of negative equity than Atlanta.

Nationally, 13.1 percent of homeowners are underwater. During the past year, improved real estate values pulled about 2 million homeowners back above water, according to Zillow.

Highest metro rates of homeowners with mortgages who were “underwater” at the end of 2015:

Las Vegas   20.90%

Chicago  20.50%

Atlanta   17.60%

Baltimore   17.40%

Cleveland   17.10%

St. Louis    17.00%

Kansas City, MO     16.40%

Detroit  16.10%

Orlando  15.40%

Washington, DC     15.30%

Phoenix    15.20%

Philadelphia     15.00%

Tampa 14.70%

Indianapolis      14.60%


Source: Zillow







Reader Comments 0


This is one of the key factors in analyzing real estate investments in Atlanta. Lots of these underwater properties are grouped in similar areas and create a positive feedback loop for declining property values in a certain area. It's important to look at local budgets, planning, and why inventory is changing in a particular area to get an idea of where to invest.


So all these black families not able to refinance there homes under this Administration because they are underwater, however the rich and middle class whites in non black neighborhoods for the last 6 yrs have enjoyed 4% and under 30yr term interest rates that saves these families thousands of dollars per year.

Now Atlanta Mayor Reed and other black leaders in the communities are acting as if under President Obama everything is wonderful and pointing to a unemployment rate of 4.9% as if this was for blacks!

Why have these black leaders not demanded that the DOJ not deal with the corrupt foreclosure of blacks & Hispanics who had FHA & VA loans!

I have written here about the underwater rate long before this article but instead of saving our black children we worried about President Obama's legacy that ain't putting food on the table or a roof over our heads! Obama will leave office and all those Hopes of Changes will act like the fools y'all know these folks are going to act like. President Obama going to have Secret Service protect in DC, while these kicking in the door black males will be acting like the US Army in Afghanistan in searching for somebody to shoot and rob!