In our cover story on underwater home owners last month, some local real estate observers predicated a turnaround in the market. Looks like we're going to have to wait a while.
Nationally, the picture isn't pretty. A full third of homeowners owe more for their home than it is worth, according to Zillow statistics gleaned from the first quarter of 2012 and released last week. In fact, if you added up all the negative equity, it would equal a staggering $1.2 trillion.
But locally, the picture is even worse. In the Seattle area, just shy of 40 percent of homeowners are underwater. Seattle, once lightly touched by the housing crisis, is now the 12th sorriest city listed by Zillow.
Hey, it could be worse. In Las Vegas, an astonishing 71 percent of homeowners are underwater. In Phoenix, nearly 55 percent.
There's considerable range just in Washington state as well. Check out Zillow's interactive map, where you can plug in a county and see how it stacks up for equity. Pierce County has the dubious distinction of having the highest underwater rate in the state, at 49 percent. In contrast, Washington's drier regions, east of Puget Sound territory, are getting off easy. Consider tiny Garfield County, in southeastern Washington, with just 9 percent of homeowners underwater.
Lesson number one: Where there is no bubble, it cannot burst.
Zillow is putting a positive spin on its numbers. The Seattle-based company points out that most underwater homeowners aren't in danger of foreclosing. Only 10 percent, nationally as well as in Seattle, are more than 90 days past due on their mortgage.
But as we wrote in our cover story, the number of people in that position has climbed dramatically in Washington just in the past couple of years. That likely means a rash of foreclosures still to come. And in the mean time, untold numbers are living in a netherworld, waiting for the bank to take action on homes they have stopped paying for months or even years ago.