From Today’s Boston Herald.
Nearly one Greater Boston homeowner in seven has slipped “under water” – owning a house or condo worth less in today’s market than the person’s unpaid mortgage balance.
Market tracker Zillow.com will report in a study due out today that 14.1 percent of Hub-area homeowners are under water, also known as having “negative equity.”
“It’s not great news for Boston, because negative equity can be a precursor to foreclosure,” Zillow spokeswoman Katie Curnutte said. “Not everyone with negative equity falls into foreclosure, but people on the edge have fewer options if they face layoffs or other setbacks.”
Nationwide, 14.3 percent of homeowners are under water, often due to declining market values and properties bought with little or no money down.
Locally, Lawrence and parts of Lynn have the area’s worst negative-equity problems, with 40.5 percent of homes sold there since 2003 now under water.
Curnutte attributed the two cities’ woes to heavy foreclosure activity, which has sent local property values plunging.
On the plus side, just 1 percent of homeowners in Boston’s trendy Midtown/Leather District area are under water – the Hub’s lowest negative-equity rate.
Curnutte said wealthy neighborhoods tend to have few negative-equity problems, as home values usually hold up better in affluent locales. She added that wealthier people typically buy homes using bigger down payments, leaving smaller unpaid loan balances.