Tuesday, August 17, 2010

FINANCE NEWS: Fewer homeowners are ‘underwater’

NEW YORK — The percentage of homeowners who owe more than their properties are worth declined in the second quarter as tax credits boosted prices in California and foreclosures surged, the real estate data provider Zillow.com said yesterday.

The Seattle firm found that 21.5 percent of homeowners were “underwater’’ on their mortgages, down from 23.3 percent in the first quarter and 23 percent a year earlier.

The decline came as property prices in California were bolstered by state and federal benefits for buyers, Zillow said. Prices climbed from a year earlier in 28 percent of the markets tracked in California, the most populous state. They gained 5.5 percent in the Los Angeles area, 5.9 percent in San Francisco, and 7.3 percent in San Diego.

“The double tax credits for some California homebuyers have certainly stimulated housing demand there and are partly responsible for the rapid — and likely unsustainable — rates of appreciation in many markets across the state,’’ Stan Humphries, chief economist at Zillow, said in a statement.

Home buyers seeking the federal benefit had to sign contracts by April 30 to qualify for a tax credit of up to $8,000 and have until Sept. 30 to complete their purchases. In California, buyers could qualify for a credit of up to $10,000 under a program that began May 1.

Foreclosures reached a high in June, with more than one of every 1,000 homes taken over by lenders, Zillow said. The number of properties receiving a notice of default, auction, or bank seizure climbed in three-quarters of US metropolitan areas in the first half of 2010, Irvine, Calif.-based RealtyTrac Inc. said on July 29

Associated Press August 10, 2010

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