Sue Fox, @Properties. Direct 773.816.1788

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Nearly half of Chicago houses are underwater

filed under: Buyers, Chicago home prices, Foreclosures, Market conditions, Short sales posted on November 18th, 2011

UNDERWATER IN

UNDERWATER IN LOGAN SQUARE: It's not much to look at, but this 2-bedroom house at 2829 N Elston sold for $159,500 in August after just a week on the market. It was a short sale, meaning the seller owed the bank more than the house was worth. Property records indicate that owner took out a $250,409 mortgage in 2007. Almost half of Chicago houses with mortgages are now underwater, according to data compiled by Zillow.

Although you don’t often hear Chicago mentioned as one of the epicenters of the housing bust — the media tends to focus on sun-splashed cities like Las Vegas, Miami and Los Angeles — our market has definitely been staggered by the downturn. Illinois was ranked #1 nationwide in the number of foreclosures earlier this year, and now comes a report that says almost half of all houses with mortgages are underwater in the Chicago area.

More than 46% of Chicago’s single-family houses are worth less than what the homeowner owes on the mortgage, a condition known as being underwater, according to the real estate website Zillow. That’s much worse than the national average of 28.6% of homes with mortgages that were underwater this fall.

And the pain seems to be increasing in the Chicago area: The percentage of underwater houses jumped 9% from the second quarter to the third quarter of 2011.

Yet Stan Humphries, Zillow’s chief economist, told the Chicago Tribune there was still reason for optimism. “I didn’t think this was a particularly bad housing report,” he said. “We are much closer to the end of the housing recession than the beginning. I still think of Chicago being more of an average case of housing recession. It’s nowhere in the league of Phoenix and Vegas.”

The Zillow data also showed that 42% of the homes sold in the city of Chicago in the third quarter sold at a loss , compared to 34.4%  nationally. Zillow said Chicago-area home prices fell 9% in the past year, to a level last seen here in 2000.

Written by Sue Fox //

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