Fewer Springs homeowners upside-down on mortgages, new study says

A national housing report released Monday sent mixed signals about Colorado Springs’ single-family housing market.

Nearly three out of every 10 homeowners — 28.8 percent — owed more on their mortgages than what their properties were worth during the second quarter of this year, according to Zillow.com, the Seattle-based online real estate service.

That’s down from 34.4 percent in the first quarter and 29.7 percent in the second quarter last year.

A smaller percentage of homeowners with negative equity — known as being upside-down or underwater — would seem like a good thing for the market.

However, after looking at Colorado Springs-area conditions, the decline in upside-down homeowners probably resulted from more homes in foreclosure being taken back by lenders, said Katie Curnutte, a Zillow spokeswoman. When lenders take back homes, they’re removed from the negative equity rolls, she said.

 “It is definitely a good news, bad news thing,” Curnutte said.

“You don’t want to see more people losing their homes. But that’s just part of how the formula (Zillow’s negative equity determination) works.”

Meanwhile, Zillow estimated Springs’ median single-family home values dipped to $193,700 in June, a 1.9 percent decline from the same month last year.

The decline wasn’t all bad, however. Other communities that saw a tremendous increase in values several years ago experienced a big drop when the national economy went into recession.

Colorado Springs’ slight decline means it fared better, Curnutte said.

Whether good or bad news, some local real estate were skeptical of Zillow’s numbers. Harry Salzman of Salzman Real Estate Services, said he suspects the percentage of area homes with negative equity is much lower; the Springs has several older neighborhoods with owners who have built up equity after being in their properties for many years, he said.

Likewise, the latest Pikes Peak Association of Realtors figures show a 5.3 percent year-over-year price increase for June, and Salzman questioned if Zillow takes into account views and other local factors that affect prices.

Zillow officials stand by their accuracy, Curnutte said. When it comes to home values, Zillow doesn’t only look at prices of homes sold, but examines all properties, she said.

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