The share of San Diego homeowners who owe more on their mortgages than their houses could sell for today has grown significantly this year, according to new data released by First American CoreLogic.

At the end of June, the number of mortgaged homes in the county that are underwater had grown to 258,253. That’s 42.64 percent of all properties with a mortgage.

About another 23,000, or about 4 percent, are close to being underwater, the firm said.

This means almost 12 percent more homeowners are underwater than were six months previously. At the end of 2008, the share of underwater loans was 30.7 percent.

The new numbers for San Diego are quite a bit higher than the share of underwater loans nationwide. The firm showed more than 15 million loans underwater across the United States, representing about 32 percent of all mortgaged properties.

San Diego’s underwater share is in line with California’s, however, which was also 42 percent.

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. Second homes and investment properties aren’t counted in that owner-occupied ratio, but loans on such properties might be included in the underwater numbers.

Why is this number important? My first look was in December, in this story. Here’s why I am very interested to see how this number is changing:

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.

Along those lines, here’s a word from Mark Fleming, chief economist for First American CoreLogic, who said mortgage risk will stay “very elevated” until negative equity and unemployment numbers decline:

Negative equity continues to be the dominant driver of the mortgage market because it leads to foreclosures in the event a borrower experiences some kind of economic shock: job loss, illness or other adverse situation.


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