RENO, Nev. (AP) - Las Vegas and Reno rank first and fourth nationwide respectively in the percentage of homeowners with negative equity, according to a report.
The report from home value tracker Zillow.com says 67.2 percent of Las Vegas-area homeowners were "underwater" on their mortgages during the first quarter of 2009. The Reno area had a 48.5 percent
negative equity rate.
Ranking second and third on the list were California's Stockton and Modesto. The survey covers 161 metro areas nationwide.
Nevada's high ranking on the list comes as no surprise, said Brian Kaiser, a housing and real estate analyst for the Center for Regional Studies at the University of Nevada, Reno.
"(Nevada) experienced some of the highest appreciation during the boom, as did the other areas at the top of the negative equity list," Kaiser told the Reno Gazette-Journal.
"The areas that experienced the highest highs set themselves up for the most dramatic pricing corrections, and that's exactly what's been happening in (Nevada) for the last couple of years," he said.
All of the metro areas in the top 10 were located in states that had the biggest housing bubbles: Nevada, California, Arizona and Florida.
Nevada has been hit especially hard because of its connection to California, said Mitch Argon, broker-owner of CalNeva Realty.
Equally important to the (Nevada) statistics is the fact that 15 of the top 25 markets ranked highest with negative equity are in California - a major feeder market for local area growth and a key driver of local homes values, especially at mid- to higher-price levels," Argon said.
Nicole Washburn of Sparks said she and her husband plan to continue making payments on their home despite being underwater on their mortgage.
But at 40 percent negative equity, Washburn admits the incentive to do so keeps decreasing. The couple's lender also informed them that loan modification was out of the question unless they start missing payments.
"I don't know if we'll ever get out from underneath our house," Washburn told the Gazette-Journal. "My husband and I have agreed not to walk away from our house because we made a commitment and feel that we have a responsibility to make our payments as long
as we can do so."
Kris Layman, president of the Reno-Sparks Association of Realtors, said she was skeptical about Zillow's numbers.
But Zillow spokeswoman Katie Curnutte defended the company's "more thorough" method of determining the figures.
Negative equity is limiting the number of people who can qualify for refinancing under the Obama administration's housing plan, which only can be used for mortgages up to 105 percent of a home's value.
Information from: Reno Gazette-Journal, http://www.rgj.com
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