A shortage of houses on the market has pushed up home prices in many
markets, including California. But the supply could increase, cooling
price increases, if more homeowners escape negative equity positions and
regain the option of selling.
“The scourge of negative equity continues to recede across the
country,” CoreLogic Chief Executive Anand Nallathambi said in a
statement. “With fewer borrowers underwater, the fundamentals
underpinning the housing market will continue to strengthen.”
The inability of homeowners to sell and move -- say, for a better job -- also places a drag on the overall economy.
In California, an estimated 1.7 million homes were underwater at
year's end, or about a quarter of all homes with a mortgage. The
Riverside-San Bernardino-Ontario metropolitan area had 35.7% of its
homes with a mortgage in negative equity — the fifth-highest percentage
among the country’s largest metropolitan areas.
