Nearly half of Chicago-area mortgages are underwater

Research from Zillow found 46 percent of single-family homes in the Chicago area were underwater in the third quarter of 2011, significantly higher than the 29 percent reported nationwide. Homes with negative equity in the Chicago area increased 9 percent compared with the second quarter.

The report showed 43.4 percent of all homes sold in the Chicago area in the third quarter were sold for a loss, compared with 34.4 across the United States. Further, various cities within the region experienced significant price declines, with 64 percent of homes in Antioch sold for a loss, 30 percent in Downers Grove and 50 percent in Lansing.

But Dr. Stan Humphries, chief economist for Zillow, said this is not a horrible housing report for the region.

"I still think of Chicago being more of an average case of housing recession," Humphries told the Chicago Tribune. "It's nowhere in the league of Phoenix and Vegas."

According to the source, the most recent Standard and Poor's /Case-Shiller home price index found a 5.8 percent year-over-year decline in the Chicago area after analyzing August data. The Zillow report found only 26 metropolitan markets reported housing price appreciation in the third quarter compared with the second, and Humphries expects home prices to drop another 3 to 5 percent in 2012. 

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