How do we derive the calculations of negative equity for owner-occupants?
We use county deeds records from 377 counties in 31 states plus the District of Columbia (AL, AZ, CA, CO, CT, DC, FL, GA, IL, KS, KY, MD, MA, MI, MN, MO, NV, NH, NJ, NM, NY, NC, OH, OK, PA, SC, TN, TX, UT, VA, and WI ) and the 2000 US census. We consider all properties with a sales or refinancing on or after 2000. With rising house prices, a property whose last transaction took place prior to 2000 is unlikely to have negative equity. We identify investor-owned properties as those in which the tax bill is sent to a different address than the property itself. We assume that properties with missing mailing address information are owner occupied. The sample is limited to residential properties described as condominiums, town houses, and single family homes. From the most recent transaction, we compute an estimated value as of August, 2008 by multiplying the last sale price by the percentage change in house prices in that county based on a county-level price index. Using the history of prim