Fewer Chicagoans are underwater on their mortgages these days, but local homeowners — particularly those with condominiums — are in worse shape than borrowers elsewhere in the country.
In its second-quarter report on negative equity, Zillow found that 14.4 percent of homeowners nationally were underwater on their mortgages, meaning they owed more on their loans than their homes were worth. That's the first time the level has been below 15 percent since the real estate bubble burst in 2008.
In the Chicago area, however, the negative equity rate fell, but it remained much higher than elsewhere. It was 22 percent in the second quarter, down from 23.7 percent earlier in the year and from 26.8 percent a year ago.
Underwater homeowners have proven to be one of the impediments to a speedier recovery of the housing market, as homeowners couldn't sell properties bought during headier times for the sums necessary to get them out from under crushing debt burdens. If they sought to sell them for less than the loan amount due, in what's called a short sale, they were at the mercy of lenders.
In turn, that kept down the inventory of homes made available for sale, creating a seller's market for desirable properties. Only in the past year or so have property values in the Chicago area risen, making it easier for more once-underwater homeowners to at least come close to breaking even, and making it easier for them to consider putting their homes on the market.
Still, among the nation's biggest housing markets, Chicago, Las Vegas and Atlanta have the highest rates of homeowners with underwater mortgages.
The range is large, however, depending on whether one owns a condo or a house, Zillow found.
Nearly a third of condos in the Chicago area were underwater, compared with 19.2 percent of single-family homes. Condo owners were also in far worse shape in Orlando and Las Vegas.
Among all homes in the Chicago area, ZIP codes with the largest year-over-year improvements in the percentage of underwater mortgages included 60537, Millington; and 60545, near Plano. Both communities are southwest of Aurora. The percentage of underwater homeowners in 60537, for example, went to 22.7 percent of homes with a mortgage, from 40.4 percent a year ago.
read more at: http://www.chicagotribune.com/business/ct-chicago-negative-equity-0907-biz-20150904-story.html
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