Where underwater homes are still a big problem

New data from Zillow has good news and bad news for the real estate market.

First, the number of homeowners that are "underwater" in their mortgages, meaning they owe more than their property is worth, fell to 6 million in the fourth quarter of 2015 from 8 million a year earlier. Unfortunately, many property owners are still in that unenviable position, despite the overall economic and housing market recovery.

According to Zillow, more than 820,000 underwater homeowners owe more than twice what their home is worth. The problem is especially prevalent in markets that were hit hard when the real estate market burst a few years ago such as San Antonio, Texas, Detroit, and Charlotte, North Carolina.

"Things are moving in the right direction, but some owners are still deeply underwater," said Zillow chief economist Svenja Guddell, in a press release. "As we move into the home shopping season, inventory is already low, and negative equity is keeping potential additional stock from becoming available."

Being underwater prevents sellers from listing their homes, many of which are in less expensive areas that first-time homebuyers would find affordable. Though the amount of so-called negative equity declined by about $75 billion in the period, many owners are so far underwater that they might not be able to resurface for several years because the rate of improvement has fallen considerably.

Not surprisingly, Zillow found the Las Vegas market had the highest negative equity rate of 20.9 percent. The region was at the epicenter of the housing crisis, though prices there have rebounded. According to the University of Nevada-Las Vegas, prices have jumped 49.7 percent since hitting bottom in January 2012. The overall U.S. market saw a 23.6 percent increase over the same time.

The Chicago market ranked second in Zillow's data, with a negative equity rate of 20.5 percent, followed by Atlanta, Baltimore and Detroit. Philadelphia, Houston, and Orlando, Florida, also had double-digit negative equity rates.

Still, the U.S. housing market had its best year in nearly a decade in 2015, as existing-home sales gained 6.5 percent, according to the National Association of Realtors. Growth, however, is expected to moderate this year to between 1 percent and 2 percent.

Here are some highlights in the Zillow data:

Fourth-quarter 2015 negative equity rates

Las Vegas: 20.9 percent

Chicago: 20.5 percent

Atlanta: 17.6 percent

Baltimore: 17.4 percent

Fourth-quarter 2015 share of underwater homeowners who owe more than 200 percent of home value:

San Antonio: 17.4 percent

Detroit: 17.3 percent

Charlotte: 16.9 percent

Chicago: 16.6 percent

Kansas City: 15 percent

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    Jonathan Berr is an award-winning journalist and podcaster based in New Jersey whose main focus is on business and economic issues.