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2 of 5 homeowners with a mortgage are equity rich

2 of 5 homeowners with a mortgage are equity rich

By Ron Trujillo/ron@calhomenews.com

More homeowners in California with a mortgage are “equity rich,” thanks to the dramatic run-up in home prices and the drop in money owed.

About two of every five homeowners with a mortgage were considered equity rich during the third quarter, owing less than 50% of the current value of their home, according to ATTOM Data Solutions. Basically, fast-rising home prices are outpacing the money owed on a mortgage.

For example, a homeowner who bought a home for $400,000 with a 20% down payment — or $80,000 — in 2013, could have a home valued at $600,000 five years later. The homeowner may still owe $300,000 on the mortgage, but they owe less than 50% of the home’s value.

California has the highest percentage (42.5%) of equity rich properties in the nation, followed by Hawaii (39.4%) and Washington state (35.3%).

Three cities in the state had  the largest percentage of equity rich homeowners, with San Jose leading the way at 73.9%, followed by San Francisco (59.8%) and Los Angeles (47.6%).

On the flip side, higher home values means a lower percentage of homes are seriously underwater, where the mortgage exceeds 25% of home’s current value.  Seriously underwater mortgage rates range from a paltry 2% in the Bay Area to 18% in Taft, a blue-collar community near Bakersfield.

Photo of rowhouses in San Jose by PBK PG/Shutterstock

High-priced San Francisco is the most affordable market for renters in California, really

Big paychecks make a big difference, including when it comes to paying rent.

More than 40% of apartments and homes for rent in Long Beach, Oakland, San Diego and San Jose are available for median renters without creating a financial burden, according to RENTCafe.

But less than one-third of median renters in Los Angeles, Sacramento and Fresno could afford rent without experiencing a financial burden. Los Angeles had the lowest percentage of burden-free rent at 23%, followed by Fresno at 31% and Sacramento at 32%.

San Francisco had the highest accessibility rate — or burden-free living — at 68% in California, largely because of the median pay of $92,100 per year. But the figure is a bit skewed, since 60% of San Francisco apartments are under rent control.

Raleigh, N.C. is the most affordable rental market, where 71% of median renters can afford an apartment without a financial hardship, according to RENTCafe.

California boasts most expensive ZIP codes in U.S., including first-place Atherton

California has the most expensive ZIP code for home prices, and six of the 10 priciest ZIP codes in the U.S., according to the annual PropertyShark report.

The appropriately named Golden State had 82 of the 100 priciest ZIP codes in the nation, including Atherton (ZIP 940207) at the top of the list with a median sale price of $6.7 million. Atherton’s median sale price is about 10 times the median-home price in California.

Santa Monica (90402) is the second most-expensive market in the state – and fifth priciest in the nation — at $3.762 million. Palo Alto (94301), Los Altos (94022), Portola Valley (94028) and Los Altos (94024) finished sixth through 10th in the nation.

Silicon Valley had 30 ZIP codes in the top 100 in the U.S. Los Angeles County has the most expensive ZIP codes in the nation and state with 19, followed close behind by San Mateo County at 17.

The city of San Francisco had nine ZIP codes on the list, tied with New York City for the most in the nation.

Photo of Santa Monica million-dollar home by Divanov/Shutterstock

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