Los Angeles’ underwater homeowners are getting back on their feet.
The percentage of L.A. homeowners with negative equity — owners whose outstanding mortgage amounts have effectively eclipsed the value of their homes — fell to 7.1 percent in the third quarter from 9.4 percent a year ago, according to real estate listings website Zillow.
California owners are now much better off than their counterparts in other parts of the country. The national negative equity rate, one of the most persistent reminders of the housing market crash, was 13.4 percent in the third quarter, down from 16.9 percent a year ago.
San Francisco and San Jose are the only large markets where fewer than 5 percent of homeowners are underwater, while Las Vegas still has the highest rate of negative equity nationwide, with 22.1 percent of homeowners classified as underwater.
“Negative equity has become almost an afterthought in a handful of the nation’s hottest markets, but is holding back the recovery in dozens of large markets nationwide,” said Zillow Chief Economist Svenja Gudell. “Despite steady declines in negative equity, many cities are still facing tight inventory, especially among entry-level homes.” — Katherine Clarke