Fewer homes underwater in Chicago area

The Chicago area housing market continues to bounce back. The number of Chicago homeowners with upside-down mortgages decreased between the first and second quarters of this year, although the city still has more underwater mortgages than the national average, according to a CoreLogic report cited by the Chicago Tribune. People looking at real estate in Chicago could be encouraged by recent reports indicating a strengthening of the housing market and local economy.

The CoreLogic report revealed that at the end of June, 30.1 percent of Chicago residential properties were underwater. The source revealed that Chicago had 460,684 homes that were "upside down." The national negative equity percentage was reported at 22.3 percent.

However, the CoreLogic report revealed that Chicago is showing improvement. At the end of March, there were 503,574 properties that were reported as underwater, which represents 32.7 percent of all Chicago area homes with a mortgage. This means that from the end of the first quarter to the end of the second in June, the percentage of Chicago area homes underwater improved by 2.6 percent.

The Chicago Sun-Times cited the CoreLogic report further, looking at how Chicago matches up against the statewide numbers for Illinois. In the state of Illinois, there were 576,822 homes underwater at the end of the second quarter, which represented 25.8 percent of all homes with mortgages. This percentage is down 2.2 percentage points from 28 percent at the end of quarter one.

CoreLogic Mark Fleming said in a statement, "The level of negative equity continues to improve with more than 1.3 million households regaining a positive equity position position since the beginning of the year."

Fleming attributes these nationwide improvements to the higher home prices that were observed in the spring and summer seasons, lower inventories of available homes on the market and fewer bank-owned sales.

A September 13 article in the Chicago Tribune argued that homeowner optimism is on the rise in the city and around the country. The article cited a recent survey by ZipRealty, which indicated that 94 percent of Zip customers who purchased a home in 2008 still own that home today. From their perspective as a homeowner, 61 percent of those surveyed ranged from being neutral to significantly better off than they were four years ago.