1 in 3 Providence, Kent homeowners underwater on mortgages
May 31st, 2012 at 5:00 am by Ted Nesi under Nesi's Notes, On the Main Site
The housing crash is still being felt across Rhode Island.
More than one out of every three homeowners in Providence County – 37% of all borrowers – are still underwater, meaning they owe more on their mortgages than their properties are worth, according to first-quarter data compiled by Zillow. That puts it among the worst 20% of all U.S. counties.
The situation isn’t much better in Kent County, which includes Warwick, where 34% of homeowners are underwater. Negative equity is much less prevalent in the southern part of the state, with underwater rates of 17% in Newport and Washington counties and 15% in Bristol County.
Three-fourths of Rhode Island residents live in Providence and Kent counties, and they’re caught in a regional phenomenon; at least 30% of mortgages underwater across a broad swath of Central Massachusetts, Northeast Connecticut and the northern half of Rhode Island, according to Zillow.
Housing prices in Rhode Island dropped 24% between the second quarter of 2006 and the first quarter of this year after soaring 151% from 1997 to 2006, according to the Federal Housing Finance Agency’s index.
(map via Zillow)
Tags: economy, great recession, home prices, housing, mortgages, realtors, recession, zillow
Nesi's Notes covers politics and the economy in and around Rhode Island for WPRI.com. (Twitter: 
[...] Just in case you thought the real estate crash was behind us, Ted Nesi reminds us that a third of homeowners in Providence and Kent County are still underwater on their mortgages. [...]
It is only going to get worse in 2013 when the Bush tax cuts end, There will be less economic growth when investors will be paying taxes at the income level on captial gains and dividends. When you remove incentives investors will sell investment before the end of December of this year and will look for investments that don’t produce capital gains or dividends. You will see more money move overseas.
The best thing you people can do is telll your elected officals is to reduce or better yet elminate all ridiculous antibusiness regulations and the excessive taxes. Rhode Island should have the lowest taxes in the country. There is no reason Rhode Island has such overgenerous benefits to it public sector employees and social service benefits. It is time to discourage people from getting welfare in Rhode Island. I really don’t care about your Nanna who never saved a penny for their retirement.
Next, most of the housing stock in Rhode Island is obsolete. In Providence County many of the triple deckers should have been torn down in the 1970′s and 80′s. Anybody who paid more than a $150K for a triple decker was greedy and got what they deserve. It is now the time to elminate zoning laws and allow owners and investors to redevelop and area. Lets be very clear investors are not government spending. That is a waste of money. It is also time to sell the housing projects. Local government should not be in the housing business or enabling people not to work.
“A decline in the national housing price level would need to be substantial to trigger a significant rise in foreclosures, because the vast majority of homeowners have built up substantial equity in their homes despite large mortgage-market financed withdrawals of home equity in recent years.”
Alan Greenspan, July 2005, in testimony to the House Financial Services Committee.
All macro issues aside the number one correlation with housing prices is JOBS.
No jobs = no household formation = declining home prices. Simple math.
[...] (typeof(addthis_share) == "undefined"){ addthis_share = [];}As I reported this morning, one in three homeowners in Rhode Island’s two largest counties are still [...]