An expiring tax credit brought more buyers into the market this spring, but that didn’t mean home sellers profited handsomely from the increased demand.
Forty percent of all homes sold in the Chicago area in March sold for less than the seller paid, according to data compiled by Zillow.com and based on public records.
The study also found 31.8 percent of all single-family, detached homes with mortgages in the Chicago area were underwater at the end of March, meaning the homeowners owed more on the loans than the properties were worth. At the end of December, 27.5 percent of local home mortgages had negative equity.
Nationally, 23.3 percent of single-family homes with mortgages were underwater in March, up from 21.4 percent in December.
“The transactional volume of what’s selling is quite different than the prices,” said Stan Humphries, Zillow’s chief economist. The 40 percent is a “pretty good indicator of how much pain there is in the market.”
Among the communities where more than two-thirds of the homes sold for a loss in March: Carpentersville, Glendale Heights, Huntley, Lindenhurst, Park Forest, Round Lake, South Elgin, Waukegan and Zion.
Where did sellers have the best shot of making a profit? According to the report, at least 75 percent of the homes in Buffalo Grove, Elmhurst, Evergreen Park, Hinsdale, La Grange, Mount Prospect, Niles, Norridge, Palos Heights and Riverside sold for a gain in March.
Within Chicago, 62 percent of all homes sold for a gain in March, or 57 percent of single-family homes and almost 70 percent of condos.
Given the continued decline in home values nationally, Humphries predicted the housing market won’t hit bottom until the third quarter, but that doesn’t mean the fourth quarter will bring real improvement.
“We think once we’ve hit bottom, we’re looking at three to five years of negligible appreciation,” he said.