> Pct. Homes Underwater: 31%
> Total Property Value: $2.8 trillion
> Mortgage Debt Outstanding: $1.9 trillion
> Median Home Value Drop From Peak: -32.7% (4th largest drop)
> May Foreclosure Rate: 1 out of every 259 homes
No state comes close to the $1.9 trillion of mortgage debt that California has. The reason for this is primarily that it has the largest overall property value in the country, as well as the second-highest median home value of $330,037. According to the Financial Crimes Enforcement Network (part of the Treasury Department), reports of mortgage fraud increased more than 31% in the first quarter of 2011. And most of these filings are from the period leading up to the financial crisis. Currently, no state has more reports of mortgage fraud than California. It appears the state’s housing situation can only get worse as the unemployment rate of 11.7% is the second highest in the country. California’s vacancy rate, meanwhile, is the sixth lowest.
> Pct. Homes Underwater: 36%
> Total Property Value: $196.3 billion
> Mortgage Debt Outstanding: $165.3 billion
> Median Home Value Drop From Peak: -33.3% (5th largest decrease)
> May Foreclosure Rate: 1 out of every 311 homes
Michigan’s economy and housing market was already in bad shape leading up to the recession, and things have only gotten worse. The state’s unemployment has been the highest in the country for more than a year, despite the state experiencing a net loss in population between 2000 and 2010 – the only state in the country to boast this statistic. Michigan home value began to decline before the recession hit, after peaking in 2005. Since that time, home prices have dropped by 33%. The state has the fourth highest foreclosure rate in the country, and the highest east of the Mississippi.
> Pct. Homes Underwater: 46%
> Total Property Value: $814.3 billion
> Mortgage Debt Outstanding: $723.3 billion
> Median Home Value Drop From Peak: -42.1% (2nd largest drop)
> May Foreclosure Rate: 1 out of every 461 homes
No state has a larger gross vacancy rate than Florida at more than 20%. When the housing market flourished, the state geared up for the impending retirement of millions of baby boomers by constructing tens of thousands of new homes. When the market collapsed, real estate investments in the state were hit hard. Florida’s home value has plummeted by more than 40% — the second largest drop in the country, and nearly one in two mortgaged homes was underwater.
> Pct. Homes Underwater: 50%
> Total Property Value: $249.3 billion
> Mortgage Debt Outstanding: $233.4 billion
> Median Home Value Drop From Peak: -42% (3rd largest drop)
> May Foreclosure Rate: 1 out of every 210 homes
Arizona is the true horror story of the housing crisis is the Southwestern U.S. Through the first half of the decade, states like Nevada, Utah and Arizona were experiencing record growth in population, business and, as a result, new construction. Conditions began to go very much the other way in 2008, and the states that once led in property value growth and employment, like Arizona, fell through the floor. In the third quarter of 2006, Arizona had median home value of $254,655. By the second quarter of 2010, that value had dropped by more than $100,000. Half of all mortgaged homes are underwater.
> Pct. Homes Underwater: 63%
> Total Property Value: $100.7 billion
> Mortgage Debt Outstanding: $115.5 billion
> Median Home Value Drop From Peak: -50.3% (the largest drop)
> May Foreclosure Rate: 1 out of every 103 homes
No state has suffered more, in every aspect, from the effects of the recession. Like Arizona, Nevada’s property value has plummeted since the middle of the decade, losing more than $150,000 on average (more than 50%) in just five years. Nevada is also the only state in the country in which total homeowner debt is actually higher than the total property value of owned homes – nearly 2 in 3 mortgaged homes is underwater. In May alone, nearly 1% of every owned home in the state was foreclosed, the highest rate in the country.
-Michael B. Sauter, Douglas A. McIntyre