There's a Growing Problem of Underwater Properties in Colorado

There's a Growing Problem of Underwater Properties in Colorado
Although the real estate market in Colorado has been on a tear for years, recent signs suggest that a cool-off may finally be on the way — including the increasing number of homes in various parts of the state that are underwater.

According to the folks at Attom Data, who've just released a new report about home equity during the third quarter of 2018, a home is considered to be seriously underwater when the combined balance of loans is at least 25 percent higher than the property's estimated market value.

In other words, the owners of the house owe a quarter more than it's worth.

Attom Data's figures show that more than 4.9 million properties in the United States qualified as seriously underwater during 2018's third quarter, representing 8.8 percent of all American properties with a mortgage. That's actually down from 9.3 percent in the second quarter of 2018 but slightly up from 8.7 percent in the third quarter of last year.

Included in the report is a heat map that allows users to discover the number and percentage of underwater properties in communities by zip code — and compared to many places in other parts of the country, including the so-called Rust Belt, Colorado's in comparatively good shape, as graphically depicted in a screen capture below. The five zip codes with the highest share of seriously underwater property range from 59.2 percent in one section of Cleveland, Ohio, to 71 percent in a portion of Trenton, New Jersey — but the largest percentage in Colorado is the 81611 zip in Aspen, at 19.4 percent.

However, the latter number is up considerably from this time last year, when 15.4 percent of properties in Aspen's 81611 zip code were seriously underwater, a previous Attom Data analysis shows. The same is true for the Colorado zip with the second-highest percentage, 81657 in Vail, which has gone from 11.3 percent of homes seriously underwater to 15 percent over the past twelve months.

At present, the problem is considerably less severe in Denver and along the Eastern Slope. But if the market's winds have finally shifted, that could change. And thousands of Colorado homes are seriously underwater right now.

Continue to count down thirty Colorado zip codes, ranked from those with the lowest to the highest percentages of seriously underwater properties. Note that "MSA" stands for "Metropolitan Statistical Area."
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Michael Roberts has written for Westword since October 1990, serving stints as music editor and media columnist. He currently covers everything from breaking news and politics to sports and stories that defy categorization.
Contact: Michael Roberts