It's been a long time since such a small percentage of New Jersey homeowners were drowning in money still owed on their home.

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According to new figures from online real estate database ATTOM Data Solutions, a little more than 163,000 properties with a mortgage in the Garden State were considered "seriously underwater" in the third quarter of 2017, meaning the homeowner owed at least 25 percent more on the mortgage than the home is worth.

That represents 9.9 percent of mortgaged properties in New Jersey — the lowest percentage, by far, recorded in New Jersey at least since the first quarter of 2012, according to the data.

More than 21 percent of mortgaged properties in New Jersey were considered seriously underwater in the third quarter of 2013. Just over 12 percent fell in that category in the second quarter of this year — more than 233,000 homes.

According to Jeffrey Otteau, president of Otteau Valuation Group in Matawan, the reduction in the number of negative-equity homeowners is linked to a continually-strengthening housing market.

"As home prices go higher, they improve that negative equity calculation. It reduces the number of people who are underwater," Otteau told New Jersey 101.5.

Otteau said a large portion of this seriously underwater group likely purchased their homes when prices were at their peak last decade, with little or no money down.

During the recession, home prices in New Jersey declined by about 25 percent. The state's been one of the slowest in terms of housing recovery. Prices here have rebounded over the past decade, but still remain 10 percent lower than their 2006 peak, while home prices nationally are 10 percent above their pre-recession peak.

Otteau predicts home prices will continue to increase in at least the few years ahead. In New Jersey, prices have risen at a modest rate of about 3 percent annually.

The continued rise in prices, he noted, can be linked to an inventory shortage.

"We've seen over the last several years, month after month, an increased number of homebuyers buying houses, at the same time when the available supply of homes for them to choose from is quite scarce," Otteau said. "So that supply and demand imbalance — more buyers and very few houses on the market to choose from — is causing home prices to rise."

According to Otteau, about 10,000 single-family homes are being constructed in New Jersey on a yearly basis. In the 90s, that number was around 25,000.

Nationally, according to ATTOM Data Solutions, there were 4.6 million U.S. properties (8.7 percent) considered seriously underwater in the third quarter of 2017 — down by more than 800,000 from the previous quarter.

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Contact reporter Dino Flammia at dino.flammia@townsquaremedia.com.