MIAMI – Aug. 17, 2017 – Home equity continues to revitalize the South Florida housing market.

Second-quarter figures from ATTOM Data Solutions show declines in “seriously underwater” homeowners and increases in equity-rich owners – the result of steadily rising home prices since 2012.

“A lot of wealth has been created for homeowners in South Florida over the last few years,” said Daren Blomquist, a vice president of ATTOM, a research firm based in Irvine, Calif. “In light of what we’ve seen in recent years, this is definitely a sign that the market is recovering.”

About 13 percent of owners with a mortgage in the tri-county region, or 203,401 people, owe at least a quarter more than their homes are worth, the data show. That’s down from 17.3 percent, or 262,591, in the second quarter of 2016.

Seriously underwater mortgages have plunged since the second quarter of 2013, when 41.7 percent had severe negative equity.

Meanwhile, equity-rich owners – those who have at least 50 percent equity in their homes – increased to 27 percent in the second quarter from 25 percent a year earlier.

The improvement on both fronts coincides with increases in home values over the past five years.

The median price for single-family homes in Palm Beach, Broward and Miami-Dade counties rose 8.1 percent in the second quarter from a year ago, according to the National Association of Realtors. Since the second quarter of 2012, the median price has soared 63 percent.

Real estate website Zillow said the booming market has led to 13 new $1 million ZIP codes in South Florida since 2014. The website defines a $1 million ZIP code as one in which at least 10 percent of the homes are worth seven figures or more.

Zillow said three ZIP codes in South Florida – 33410 in Palm Beach Gardens; 33332 in Southwest Ranches, Weston and Pembroke Pines; and 33122 in Doral – hit the milestone in the past year.

“As home values reach new peaks, $1 million homes are increasingly common, even in neighborhoods once considered middle class,” Svenja Gudell, Zillow’s chief economist, said in a statement.

Adam DeSanctis, a spokesman for the national Realtor group, said higher prices across the country also have led to sharp declines in distressed home and condo sales.

In the second quarter, less than 10 percent of all sales nationwide involved a distressed property. During the peak of the housing bust, nearly half of all transactions involved a short sale or foreclosure, he said.

Other factors in the return of lost equity are that owners are staying in their homes longer and aren’t abusing home equity lines of credit as they did during the last housing boom, Blomquist said.

Still, he said 13 percent remains an elevated level of seriously underwater mortgages. The ideal level would be less than 5 percent, he said. Nationally, 9.5 percent of owners were seriously underwater in the second quarter.

Source: Florida Realtors