Many South Florida borrowers remain underwater 10 years later

Many South Florida borrowers remain underwater 10 years later

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A decade after a collapse in the housing market triggered the 2008 Great Recession, South Florida still has many homeowners who owe far more money than their property is worth.

And even with home prices creeping up in recent years, Broward County is ground zero for underwater mortgages.

As of the second quarter of 2018, about 8% of Broward’s homes were “seriously underwater,” according to California-based Attom Data Solutions, a real estate research and analysis firm. That compares to 5% for Palm Beach County and 4% for Miami-Dade.

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Attom defines “seriously underwater” as properties where mortages and loans exceed the home’s estimated market value by at least 25%.

South Florida fared better than the U.S. average. One in ten homes across the United States was seriously underwater this spring, Attom reported.

Daren Blomquist, senior vice president for the company, said South Florida home sales prices remain 10 to 15% below their peak in 2006. “That’s kind of the number one factor” that leave homeowners owing more than the property may be worth, he said.

Blomquist said Broward’s high proportion of underwater homes, relative to neighboring counties, could be because many homeowners who bought before the recession “stuck it out” rather than go into foreclosure, meaning they still owe more than what they can fetch on the market. But they still have the house.

“High foreclosure rates are kind of like the reset button,” he said.

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