Nearly a quarter-million homes have negative equity in Massachusetts, a number that has grown roughly 5 percent over the past year, the Boston Business Journal reported Tuesday, September 13, 2011.
A home is considered “underwater” when its mortgage exceeds the property’s overall value. Although the percentage of Massachusetts homes that are underwater is quite a bit lower than the national average (15.7 percent in MA, 22.5 percent nationally), Corelogic, a provider of financial, property and consumer information, reported that Bay State percentages are trending upwards while the national average declines.
The negative equity could end up forcing a lot of homeowners that must move, for jobs, divorce or other personal reasons, to list their home as a short sale. Failing to get lender approval for a short sale could lead to foreclosure.
As of the end of June, 15.7 percent of Massachusetts homes were underwater compared to 14.9 percent at the third quarter 2010, a difference of 11,846 homes (234,443 in June 2011, 222.599 in September 2010). The Boston-Quincy metro region saw negative equity rates rise from 15.7 percent in September 2010 to 16 percent in June 2011.
Nationally, negative equity rates dropped to 22.5 percent in June, down from 23.1 percent at the end of 2010.
Comments