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More equity rich in Bay Area, SoCal

More equity rich in Bay Area, SoCal

By Ron Trujillo/

The Bay Area and Southern California’s fast-rising home prices are making more homeowners feel wealthier.

Four of the five leading equity rich regions in the nation were in California at the end of the second quarter, according to a recent RealtyTrac report. Equity rich homeowners are those who owe less than 50% of their property’s value on outstanding mortgages (also often referred to as the loan-to-value ratio).

Los Angeles County has the fourth largest percentage of "equity rich" homeowners.

Los Angeles County has the fourth-largest percentage of “equity rich” homeowners.

San Jose has the largest percentage of equity rich homeowners at 53.7%, followed by San Francisco at 47%. Los Angeles (37.4%) and San Diego (32.1%) have the fourth- and fifth-highest percentage rates (Honolulu was No. 3).

It’s definitely great news for homeowners in those regions, but others in the state aren’t so lucky. The percentage of equity rich homeowners in the inland regions of Central and Northern California is much lower, anywhere from 18% to 25%.

The inland regions have lower-priced homes, but also much slower appreciation. In fact, the negative-equity rates and equity rich rates are rather close from Bakersfield to the Oregon border. So just as many homeowners are dealing with an underwater mortgage as those who owe less than 50% of the value of their home.

San Diego photo courtesy of William Garrett @Flickr.

Thinking about refinancing?

Near-record low interest rates have encouraged many California homeowners to refinance, but more should consider the move, which lowers the monthly payment.

About 912,500 homeowners are eligible for refinancing in the state, according to a report in Nerdwallet. The average homeowner would save $328 per month. Statewide, the monthly savings would be almost $300 million, or $3.6 billion per year.

Of course, homeowners should consider numerous issues before refinancing; most notably how long they will remain in their current home and the upfront costs.

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