More Underwater Homeowners Bail Themselves Out in 3rd Quarter

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underwater homesThe housing market's downturn was so severe that it has taken years to even begin approaching pre-meltdown normalcy, but as it improves, more homeowners are finding themselves in much better financial positions.

During the third quarter of the year, negative equity in the housing market took a sizable tumble, according to the latest data from the tracking firm Zillow. Now, the number of homeowners nationwide who are underwater on their mortgages stands at 28.2 percent, down from the 30.9 percent observed in the previous three-month period. It's also the first time that negative equity slumped below 30 percent since the company started tracking the data in the first quarter of 2011.

Still, though, 28.2 percent of the total housing market means that more than 14 million homeowners have an underwater mortgage some six years after the housing crisis began, the report said. But in the third quarter alone, that was a decline of about 1.3 million people. Experts attribute the turnaround to rising home values, as prices jumped 1.3 percent in the third quarter.

"The fall in negative equity rates means homeowners have additional options for refinancing or selling their homes," said Zillow chief economist Dr. Stan Humphries. "But while we're moving in the right direction, a substantial number of homes are still locked up in negative equity, unable to enter the existing resale market despite the desires of their owner. The housing market has found real momentum of its own but is not immune from shocks to the broader economy."

During this period, all 30 of the nation's largest metropolitan areas saw quarterly declines in negative equity, the report said. Among the highlights on this list were Atlanta, which fell to 50.4 percent of properties, but were dealing with those as high as 54.4 percent just three months ago. Similarly, Las Vegas saw negative equity slip to just 63 percent of homes from 68.5 percent. Phoenix also saw a decline, to 45.5 percent from 51.6 percent.

Obviously, many housing markets still have a long way to go in terms of recovering, and those are typically the ones that also took the biggest hit when the housing downturn began. Mortgage delinquency and default have been major problems in much of the Southwest and Southeast for years, and only now are meaningful improvements beginning to be made.

See more on Credit.com:
How Refinancing Can Affect Your Credit
What You Need to Know About House-Hunting in the Off Season
A Mortgage Can Help (or Hurt) Your Credit

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More Underwater Homeowners Bail Themselves Out in 3rd Quarter

Location: Cherry Hills Village, Colo.
Price: $4.995 million
Beds/baths: 6/8
Sq. ft.: 11,949

If you can believe it, the price of this gorgeous Colorado homestead -- which the listing calls "the best lot in Cherry Hills" -- is reduced to entice buyers. The foreclosure has a gourmet kitchen, his and her pool cabanas, two guest suites and lovely gardens. "Priced to sell!" the listing says, and who wouldn't want to buy?

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Location: Leland, Mich.
Price: $4.75 million
Beds/baths: 7/6
Sq. ft.: 5,718

This prime lakefront property on Lake Michigan was built in 1996 and has three natural stone fireplaces, tougue-and-groove wood ceilings, as well as three wells on the property. Part of the lot may be available for development depending on local zoning laws.

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Location: Jupiter, Fla.
Price: $4.3 million
Beds/baths: 6/8
Sq. ft.: 9,153

You'd never guess that there would be a foreclosure in the same town as Celine Dion's famous manse, and one with an epic backyard water park. And from the looks of it, who would guess that this home would be said foreclosure? With grand archways, spiraling staircases and rooms awash in rich cherrywood, it is certainly not your typical foreclosure.

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Location: Monterey, Calif.
Price: $3.798 million
Beds/baths: 4/6
Sq. ft.: 6,266

The lawn may be a little bit overgrown, but this foreclosed California home can still be a dream come true with a little TLC. It has a large kitchen with wraparound granite countertops, a huge master suite and long, beautiful gallery walkways.

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Location: Las Vegas
Price: $3.55 million
Beds/baths: 5/8
Sq. ft.: 11,641

Las Vegas is one of the cities that was hit the hardest during the foreclosure crisis, but that doesn't mean that all its homes in foreclosure are dumps. This foreclosed mansion proves that: It has a grand entry foyer with sprawling marble floors, a modern-to-the-minute kitchen -- and even a theater!

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Location: Naples, Fla.
Price: $3.5 million
Beds/baths: 6/8
Sq. ft.: 8,355

The foreclosure crisis clearly didn't spare even the most exclusive of enclaves: This massive estate has private lake and golf course views, a four-car garage, soaring salon with fireplace and grand staircase, and even a private "in-law suite" in the eastern wing.

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Location: Greenwood Village, Colo.
Price: $3.3 million
Beds/baths: 6/9
Sq. ft.: 9,881

Still pretty new, this home sits on a 2.5-acre lot with beautiful mountain views. The good news is that, even though it's been foreclosed on, it should be in very good condition.

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Location: Henderson, Nev.
Price: $3.25 million
Beds/baths: 6/8
Sq. ft.: 12,872

This giant foreclosure has a massive kitchen, dual grand staircases, a backyard pool with fountain, and a gorgeous wine cellar.

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Location: Boulder City, Nev.
Price: $3 million
Beds/baths: 6/7
Sq. ft.: 9,245

You might recognize this palatial foreclosure: We wrote about it in August. But it's what's behind the home that is most memorable.

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There's an entire water park in the backyard, including a "lazy river," a water slide and a water mill.

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The interior of the home is equally impressive, with monstrous rooms and unique wood detailing.

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