Over 20 Percent of NYC Metro Area Mortgage Holders Underwater, But Brownstone Brooklyn Largely Spared


The headline pretty much says it all: The percentage of mortgage holders in New York City and environs who have negative equity ticked up slightly from 20.1 in the fourth quarter of 2011 to 21.3 in the first quarter of 2012. As you can see from the map (from Zillow via The Real Deal), however, much of the pain was felt in New Jersey and Queens. Brooklyn, especially Brownstone Brooklyn, looks largely unscathed. And compared to the rest of the country, where almost one-third of homeowners are still underwater, New York isn’t doing too badly.

One-fifth of NYC-area Borrowers Are Underwater [The Real Deal]

7 Comment

  • It would be a mistake to place any stock in a survey that depends on Zillow-based house-level valuation data. Zillow’s valuation on an individual house level is highly inaccurate. For example, over the past year, the Zillow value for my house has swung through a 30+% range. It seems unlikely that prices have moved that much in Park Slope. (Over the past 4 years, Zillow believes that my house has swung through an even wider range: increasing and dropping 50+%…yes, increasing 50% at the hight of the recession.)

    While I have no way to verify, it may be true that Zillow’s values are correct *on average* (e.g., if you add all the Zillow valuations in Brooklyn, you get to an approximately accurate value for all real estate in Brooklyn since some valuations are too high and others too low). That, however, is meaningless when you are using the data to determine how many houses are under water. In this case, the fat tail of Zillow’s error curve dramatically distorts the data.

  • I agree, soslope. Zillow’s valuations seem totallbased on any recent sale but have no way of comparing +/- because of individual block, condition, etc., etc. This make work in new development but so much variation in place like brooklyn.
    Also – where are getting info on current outstanding balance of mortgage?
    public record of original amount…but how do you know how much someone owes today. In my case, public docs show one mortgage which is in reality a ‘line of credit’ that is not even being used.

  • Have to agree with the Zillow-bashing here. Their valuation of my house is completely insane–it has swung literally more than 200% up and down in the last two years. I have no idea what is going on there but after hilariously overvaluing my house to the tune of two million dollars over value they are now substantially undervaluing it, at least by 400 thousand.

  • Have to agree with the Zillow-bashing here. Their valuation of my house is completely insane–it has swung literally more than 200% up and down in the last two years. I have no idea what is going on there but after hilariously overvaluing my house to the tune of two million dollars over value they are now substantially undervaluing it, at least by 400 thousand.

  • That being said however, it would surprise me if too many brownstone brooklyn owners were under water. For reasons we can argue til the cows come home, Brownstone Brooklyn has not seen the kinds of price depreciation seen in other parts of the country and has, if anything, seen rising prices since the crash.

  • And NYC never trails trends and our banking center across the river (which employees nobody in Brownstone Brooklyn TM) has no exposure whatsoever to the rest of the nation (let alone Europe) so I guess were out of the woods. Buy buy buy.

    ***Half Peak Comps Euroding***