For every five homeowners in the Bronx, almost one of them had debt that exceeds the value of their property during the first quarter, according to a negative equity report from Zillow.
The Bronx led the city in underwater mortgages, in which a sale would result in a loss. Property values in the borough fell by 12 percent from 2010 to 2012, according to Furman Center for Real Estate and Urban Policy data cited by Crain’s. Homes owned by first-time buyers often fall into the negative-equity category.
While almost 20 percent of Bronx homeowners have underwater mortgages, the quantity is much smaller in the Brooklyn, where only 9 percent is affected, the study showed.
“For anyone who is looking to get into the housing market, it is a lot harder to find first-time homes, since a lot of them are occupied by people who are underwater on their mortgages,” Stan Humphries, chief economist for Zillow, told Crain’s. [Crain's] — Mark Maurer