Underwater homes drying out in South Florida

A December 2011 photo of Miami's skyline (Credit: John Spade)
A December 2011 photo of Miami's skyline (Credit: John Spade)

South Florida used to be one of the country’s worst offenders for underwater mortgages, but the region’s strengthening housing market has aired out many of these properties.

A third quarter report from RealtyTrac shows South Florida isn’t even in the top 10 for sunken home loans.

Out of the region’s 2.5 million housing units, 21.9 percent of them are “seriously underwater,” according to the report, released Thursday. RealtyTrac measures that status by looking at owners who owe at least 25 percent more than what their property is worth.

That’s a significant improvement from the end of 2014, when roughly 24 percent of South Florida’s homes were submerged.

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Mike Pappas, owner of Keyes Co.,.

Mike Pappas, owner of Keyes Co.,.

“As prices continue to rise we see thousands of property owners move into positive equity,” Mike Pappas, CEO and president of the Keyes Company, wrote in the report. “This bodes well as our residential home inventory still remains low.”

Other Florida metropolitan areas did not fare as well during the third quarter: Six of the top 10 regions with the most underwater homes were in Florida. Lakeland had the biggest ratio of underwater homes at 28 percent, followed by Las Vegas, Nevada at 27.3 percent, and Cleveland, Ohio at 23.8 percent.

Nationally, underwater homes continue to surface as the global financial crisis fades out. The national rate was 12.7 percent, or 6,917,673 residential properties, down from 13.3 percent in the second quarter.