Report shows low percentage of Sonoma County homeowners underwater on mortgages

The numbers look better for Sonoma County, but the U.S. still has a large quantity of homeowners who are underwater on their mortgages, and the picture didn’t improve in the final months of 2014.

Nationally, the rate of homeowners trapped in negative equity, meaning they owe more on their mortgages than their homes are worth, remained unchanged at 16.9 percent in the fourth quarter last year, according to a report released Wednesday by Zillow. In comparison, negative equity previously had fallen for 10 straight quarters on a quarter-over-quarter basis.

Zillow called the flattening “a major turning point” for the housing market.

“The days in which rapid and fairly uniform home value appreciation contributed to steep drops in negative equity are behind us, and a new normal has arrived,” the report stated. “Negative equity, while it may still fall in fits and spurts, is decidedly here to stay, and will impact the market for years to come.”

Seven percent of Sonoma County mortgage holders owed more than their homes were worth in the fourth quarter, according to Zillow. The report didn’t provide earlier data for the county, but other real estate data services previously had reported that nearly one in three county mortgage holders were underwater at the end of 2009.

For Mendocino County, ?14 percent were underwater in the fourth quarter, while in Lake County the rate was 23 percent. In Napa County, the negative equity rate was 8 percent and in Marin County, 3 percent.

Those most likely underwater also happen to own the least expensive homes.

Zillow divided homes into three tiers by value. For the nation, 27 percent of mortgage holders in the bottom tier were underwater. In Atlanta, Chicago, Detroit, Kansas City, Las Vegas and St. Louis, more than four in 10 such homeowners had negative equity.

The report concluded that “some homeowners trapped very deeply underwater may essentially be in negative equity forever.”

To view the entire report, go to: http://bit.ly/1G7eLbd.

You can reach Staff Writer Robert Digitale at 521-5285 or robert.digitale@pressdemocrat.com. On Twitter @rdigit.