The continuing rise in home prices in metro Atlanta is giving homeowners with underwater mortgages optimism that they’ll be able to sell eventually and break even, or possibly even make a profit.
A report Friday from Zillow, the online real estate listing service, showed 35 percent of metro Atlanta homeowners with outstanding loans in the fourth quarter owed more than their homes were worth. The rate, however, was a noticeable drop from the 54 percent who were underwater the same period a year earlier.
Metro Atlanta was still among three cities with the highest share of homeowners dealing with negative equity in the country. The others were Orlando and Las Vegas.
Rising home prices, partly the result of a shortage of available homes for sale, may prompt homeowners with rising equity to consider selling, which should increase the supply of homes as spring arrives.
S&P Case-Shiller reported earlier this week home prices in metro Atlanta rose more than 18 percent in 2013. December was the 13th consecutive month of double-digit home price increases.
According to the Atlanta Board of Realtors, the median sales price for January was $180,000, up 22.4 percent from the year before.
Prices are expected to continue rising but at a slower pace even as more buyers enter the market and inventory remains tight. The pace of the decline in the number of underwater mortgages also will slow locally and nationally.
Zillow said the national underwater mortgage rate dropped to around 19 percent in the fourth quarter, the first time it has been below 20 percent in years. The cities with the lowest negative equity rates were San Jose, Austin and Houston.
