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Report: More than 1 in 5 Tampa Bay homeowners are still 'seriously underwater'

Published Jan. 28, 2016

Almost 170,000 Tampa Bay homeowners are still "seriously" underwater on their mortgages even as rising home values are making others "equity rich."

As of the end of last year, 20.7 percent of bay area borrowers owed far more than their homes were worth, RealtyTrac is reporting today. That was almost twice the national percentage and higher than in several other parts of Florida.

"Seriously" underwater is defined as owing 25 percent more than the home's estimated market value.

At the same time, nearly 18 percent of Tampa Bay borrowers were in the enviable position of having at least 50 percent equity in their homes.

"We continue to deal with a long tail of seriously underwater properties, and it likely will be another five years at least before most of these remaining properties move into positive territory," said Daren Blomquist, RealtyTrac's vice president. "At the other end of the spectrum, the growing number of equity-rich properties reflects a moribund move-up market."

A high percentage of homes with negative equity has a chilling effect on an area's real estate market because borrowers cannot sell without taking a loss. That means they are unlikely to move up to a more expensive home.

For Tampa Bay borrowers who are seriously underwater, values would have to rise more than 25 percent for them to break even on a sale.

As of the end of 2015, Hernando County had the highest percentage of seriously underwater borrowers, 27.1 percent, followed by Pasco (25.5 percent), Hillsborough (20.3 percent) and Pinellas (17.4 percent).

Tampa Bay's figures, while high, are still a vast improvement from early 2013 when nearly half of all borrowers were seriously underwater.

Nationally, 11.5 percent of mortgaged homes were seriously underwater, down from a peak of 28.6 percent in 2012. Lakeland and Orlando ranked among the top five metro areas with the largest percentages of underwater homes at 24.4 percent and 22.2 percent, respectively.

The Miami, Jacksonville, Sarasota and Fort Myers areas all had less than 20 percent of seriously underwater homes.

Markets with the lowest share of homeowners who owed more than the value of their properties were San Jose, Calif; San Francisco; Austin, Texas; Portland, Ore.; and Boston.

Contact Susan Taylor Martin at smartin@tampabay.com or (727) 893-8642. Follow @susanskate.