TAMPA - The Tampa Bay area finds itself at the wrong end of two national housing rankings: leading the nation in underwater homeowners and near the top among foreclosures.
The new rankings prove that despite rising property values and multiple bids on some houses, the Bay area's housing market is hardly out of the woods.
New figures from CoreLogic, a property research firm, show that 41.1 percent of all mortgaged properties in the Tampa-St. Petersburg-Clearwater area had negative equity in the first quarter of this year, meaning the debt on the properties exceeds their value. Such properties are referred to as underwater or upside-down.
That's actually an improvement over the fourth quarter of last year, when 44.4 percent of local mortgages were underwater. However, it was the highest ratio among the nation's 25 biggest metropolitan areas, CoreLogic said.
All told, 255,925 residential properties with a mortgage in the Tampa Bay area were in that unenviable position. Among the homeowners facing it is Mel Bermudez, a Tampa real estate agent who's reminded of how much he's underwater every time he sells a home at today's still-low housing prices.
"I owe $433,000, and it's worth $250,000 on my best day," Bermudez said.
Around the country the news is generally positive, as fewer people find themselves underwater on their mortgages and more find themselves with a bit of equity in their homes. Nationwide, 19.8 percent of residential properties with a mortgage had negative equity in the first quarter, which is down from 21.7 percent at the end of last year.
The second report out Wednesday, from a foreclosure research and sales firm called RealtyTrac, ranks the Tampa Bay area third in foreclosure rate among metropolitan areas with at least 200,000 people. One in every 290 homeowners in the Tampa Bay area got some type of foreclosure filing in May, ranging from an initial notice of foreclosure to a bank repossession of their home.
Total foreclosure filings in the Bay area in May were up 32 percent over April and up about 4 percent over May 2012.
In fact, Florida won the dubious distinction of having the top three metro areas with the worst foreclosure rates. Miami led the nation among big metro areas, followed by Jacksonville and Tampa. Florida led all 50 states in foreclosure rate, with one foreclosure filing in May for every 302 housing units. That's about three times the national average, RealtyTrac said.
The huge rise of residential real estate investors may be a factor in the rising foreclosure rates, said RealtyTrac Vice President Daren Blomquist. In Tampa and around the country, big hedge funds and other investors are snapping up homes at break-neck speed and converting them into single-family rentals. That may be encouraging lenders to sell off their inventory of repossessed homes, rather than sitting on them.
"There is a perfect storm of factors that is making 2013 an opportune year to unload their foreclosure inventory," Blomquist said. "First, many of the questions surrounding proper foreclosure procedure have been cleared up, so lenders can proceed more confidently with foreclosures. Second, home prices are rising, which means they can now recoup more of their losses.
"And third, there is strong demand for single-family homes, particularly from institutional investors who are willing and able to purchase at the public foreclosure auction with cash."
Some real estate professionals are heartened by the Bay area's rising housing prices, which are up about 14 percent over the past year. But the combination of hundreds of thousands of underwater homeowners and high foreclosure rates shows that not everyone is sharing in the positive news.
Some homeowners can get lower interest rates and better terms on their underwater mortgages through the federal government's Home Affordable Refinance Program, or HARP, said Pam Marron, a senior loan officer in Hudson. The program is open to people whose mortgages are held or guaranteed by the government-sponsored housing entities Fannie Mae or Freddie Mac, and who are current on their mortgages.
However, a lot of Tampa Bay area residents have mortgages that aren't backed by those two companies or aren't guaranteed by the Federal Housing Administration or the Department of Veterans Affairs. They have fewer options to get out from under their mountain of debt, Marron said.
Kay Hubbard, a Tampa mortgage broker, encourages her clients to buy in dense, urban cities, places where there's no more land to build houses. So, homes tend to appreciate more there and homeowners there build equity quicker, she said. Real estate in South Tampa, for example, seems to be appreciating faster than most anywhere else, she said.
The Tampa-St. Petersburg-Clearwater area had the highest ratio of underwater mortgaged properties among the nation's 25 biggest metropolitan areas. The top five on that list are:
Metro area (% of mortgages underwater)
Tampa-St. Petersburg-Clearwater (41.1%)
Miami-Miami Beach-Kendall (40.7%)
Atlanta-Sandy Springs-Marietta (34.5%)
Warren-Troy-Farmington Hills, Mich. (33.6)