More SD Loans Were Underwater by End of 2008

Published: Wednesday, March 11, 2009 3:04 PM PDT

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The share of San Diego County homes worth less than the mortgage on them grew slightly from the third to fourth quarters last year, according to data released late last week.

The fourth-quarter share was 30.7 percent -- or 170,795 -- of mortgaged homes in the county in that underwater position, according to First American CoreLogic. In the third quarter, 29.7 percent of mortgaged homes were underwater.

This percentage does not count properties are that are owned free and clear, which account for one-quarter of the county's owner-occupied units. Not included in the owner-occupied ratio are second homes and investment properties.

I wrote about the underwater phenomenon in this December story:

For many underwater homeowners, their incomes and monthly payments will allow them to wait to sell until their homes are again worth more than what they owe the bank. But the statistic is an important indication of how many homeowners could be forced into short sales or foreclosure if they lose their jobs, need to move, or fall behind on their payments. Eventually, if the gap grows too large between the balance of the mortgage and the value of the house, some might walk away.

Another 4.4 percent of the county's homes with mortgages have what the firm calls "near negative equity" -- mortgages that are within five percent of being underwater.

The firm said Nevada and Michigan have the highest shares of mortgaged homes underwater. California came fifth, after those two and Arizona and Florida.

In sheer numbers, though, California ranks first with more than 1.9 million borrowers underwater. Here's a chart from First American CoreLogic to indicate that:

One other note: Thanks for all of your suggestions for upcoming housing stories. I'll be cracking on some of those soon.

-- KELLY BENNETT

2 Comments so far on this story...

Cool unusual graphic !

Posted by Lee | reply to this comment
March 11, 2009 3:07 pm

Yes. A brilliant way to show that data set. Much more effective than a bar graph.

Posted by snodman | reply to this comment
March 12, 2009 6:36 am

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