April 23--One-quarter of homes with a mortgage in the Chicago area, and almost 24 percent in Illinois, are "seriously" underwater, meaning homeowners owe at least 25 percent more on the loans than the property's value, according to data released Thursday.
The report from RealtyTrac, which shows the percentage of underwater homeowners growing in most parts of the nation, helps explain why more homes are not coming on the market, despite the desires of would-be sellers. They simply don't have the equity in their properties to be able to sell them unless they bring cash to the closing table or get approval from their lender for a short sale.
Also driving up the percentage of underwater borrowers is the slowing rate of appreciation that many housing markets are seeing, a trend that economists say is a return to more normalized boosts in housing prices. In the Chicago market, median prices of home sales in March posted a dramatic year-over-year spike after eight months of flat or declining prices.
In Illinois, 21.4 percent of homes with mortgages were "seriously" underwater at the end of 2014, a dramatic improvement from the 29.7 percent recorded in March 2014.
"Most of the seriously underwater homeowners are still stuck in their homes," said Daren Blomquist, a RealtyTrac vice president.
Underwater Chicago-area homeowners can at least take some solace in the fact that residents in other markets, like Orlando and Lakeland, Fla., and Akron and Cleveland, Ohio, are even more underwater.
Also Thursday, real estate brokerage Redfin reported that while new listings continue to be added to the market, the vast majority of homes listed for sale have been on the market for at least a month. Nationally, new listings rose 9.2 percent last month but 70 percent of all listings were at least 30 days old.
mepodmolik@tribpub.com
