The percentage of “underwater” homes worth less than they are mortgaged for rose sharply in San Mateo County in the first quarter of this year, more than in any other Bay Area county.
San Mateo County homes suffering from what is known as negative equity rose to 17.5 percent in the first quarter of this year as compared to 11 percent last year, Zillow.com reported. The change, driven by falling property values, reflected trends seen at the local, state and even national level.
For data on homes in negative equity by county and foreclosures by city, click on the photo to the right.
The numbers could signal another wave of foreclosures in the making. For residents with homes in negative equity, the options can often come down to either seeking a short sale, meaning a sale for less than the mortgage value of the house — or walking away and letting it fall into foreclosure, said Arton Chau, General Manager of Burlingame-based Home Buyers Alliance.
Chau, who specializes in negotiating short sales, says his clients are either encountering severe economic stress that renders them unable to make payments, or they can make payments but have found it makes more financial sense to let the underwater home go.
“For me, it’s really about getting them out of this difficult situation,” Chau said.
For communities like Daly City, already hit hard by the foreclosure crisis of recent years, the numbers could mean more bad news to come. The city had 791 foreclosed homes this January, down from 884 the previous year but still the highest number in the county.
“The foreclosures are absolute disasters,” said Daly City Councilman David Canepa. “These are the people who have been the fabric of our society. I saw the data, and it doesn’t look like it’s getting any better.”
Canepa said that foreclosures and negative equity impact the city’s source revenue of property tax, as well as the community as a whole. Though a renter himself, Canepa can’t escape the anguish of people losing their homes as he receives about two calls a month from people asking for help.
“It’s heartbreaking, these people are pouring their hearts out. We all got steamrolled by this economy.”
County Supervisor and Daly City native Adrienne Tissier said she began hosting foreclosure workshops three years ago when the first foreclosure wave hit.
“Everyone is talking about the economy coming back a little bit, but the foreclosure issue is still very, very real,” she said.
Tissier’s workshops aim to both help those who are battling foreclosures and those preparing for life after losing their home.
“My hope is if I help at least one person, that’s one more person that isn’t on the street,” she said.
The trend toward increased negative equity was not limited to San Mateo County. In San Francisco, the percentage of underwater homes rose from 8.4 percent this time last year to 21.8 percent, while Bay Area-wide it increased to 25.7 percent from last year’s 22.4 percent mark.
National and state negative equities were also up with the national numbers climbing to 28.4 percent from 22.2 percent last year, and California recording 32.2 percent, up from 28.7 percent.