Las Vegas homes go underwater

Home prices are still falling nationally. More in some areas and less in others, but they still are in retreat. People who bought real estate in the last five years or so are in real danger of being upside down. Or underwater. That's when the balance on the underlying mortgage is higher than the home's value. Those who put nothing or very little down are most vulnerable.

Zillow.com, a well-known real estate website, just released a report on the first quarter of 2009 according to which 21.9% of all homeowners are now taking a bath. It was 17.6% in the fourth quarter, so the increase is clear.

In the same report Las Vegas has claimed the top spot with 67.2% of homes currently underwater. That is a troublesome number. Mortgage borrowers who put quite a bit of money down could still be okay here in Southern Nevada, at worst perhaps 5 to 10% upside down. That should make them eligible for the latest housing rescue plan, the Making Home Affordable one, where refinance can be done up to 105% of the home's value. As long as other important criteria is also met.

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