As a followup to yesterday’s post about underwater mortgages, I wanted to highlight a recent list of the states with the highest percentage of homes that are underwater. As a reminder, we’re talking here about homes that are worth less than their outstanding mortgage debt.
Without further ado, here are the top (or should I say bottom?) five states in terms of underwater mortgages:
- Nevada. An amazing 61.1% of homes are underwater in Nevada. This pattern has been driven by a 60% decrease in median home value from the peak of the market. Also, 13.4% of homes in Nevada are in foreclosure or 90+ days delinquent — second only to Florida.
- Arizona. Over in neighboring Arizona, 48.3% of homes are underwater. A 47.9% decline in median home values (second only to Nevada) is largely responsible for this statistic. A total of 7.1% of homes in Arizona are in foreclosure or 90+ days delinquent.
- Florida. Down in Florida, 34.7% of homes are underwater due to a 30.1% drop in median home values vs. the peak of the market. In addition, 6.5% of Florida homes are in foreclosure or 90+ days delinquent.
- Michigan. Up in Michigan, 34.7% of homes are underwater. In fact, our very own Matt Jabs was affected by this until he completed a short sale to get out from under his mortgage debt. Median home prices there have declined 30.1% since the peak, and 6.5% of home are in foreclosure or 90+ days delinquent.
- Georgia. Finally, 33.0% of homes are underwater in Georgia, where median home prices have declined 26.0% from the peak of the market and 8.0% of home are in foreclosure or 90+ days delinquent.
Honestly, I’m not really surprised by the contents of this list, as these are the states that have suffered the most in terms of high unemployment, failed banks, etc. during the recent economic downturn.
Perhaps the biggest surprise (at least to me) is that California didn’t make the list, but guess what? They’re only one spot away, sitting in sixth place, with just shy of 30% of mortgages underwater. The balance of the top ten includes Idaho (really?), Maryland, Ohio, and Virginia.
Of course, this list just looks at overall rates, and not magnitudes. I’d be willing to bet that many people in California are typically further underwater than those in, say, Michigan due to the generally much higher real estates prices there.
What do you think? Are you surprised by the results?