Almost One-Third of All Chicago-Area Homeowners are Underwater

I’ve got good news and bad news about Chicago-area mortgages.
I like to get the bad news out of the way: According to a Zillow report on the second quarter of this year, 28.9% of all home mortgages in the Chicago area had negative equity, which means those homeowners owed more on their loans than their homes were worth.
Now the good — or bright-side — news: That 29% is an improvement over the 31.8% level recorded in the first quarter by the online real estate site.
It’s good to see an improvement, but Chicago’s percentage is significantly higher than the national level, which fell from 23.3% in the first quarter to 21.5% in the second.
“As the national housing market limps toward stabilization, individual markets are a mixed bag,” said Zillow Chief Economist Dr. Stan Humphries.
“Home sales are declining significantly in the post-tax credits environment, but the impact of falling home sales on already-declining home values is yet to be seen. Recent trends in home values suggest the nation could reach a bottom in the latter half of 2010, but we continue to be cautious about the impact of declining home sales.”
More bad news, good news: Zillow reports that home values in the Chicago area have fallen 27.2% since July 2006, when prices were at their highest.
The bright side: Home values in the Chicago area rose 1.6% in the second quarter.
Mindboggling: Zillow also reports that foreclosures reached a new peak in June, with more than one out of every 1,000 U.S. homes being foreclosed upon.