Illinois home values in some areas have never fully recovered from the real estate market crash, trapping some homeowners in houses that they are ready to move out of.
Trapped in their underwater mortgages
For example, Steinar Andersen of Huntley Illinois is ready to move out of the state. He is a disabled veteran who cannot work because of service-related injury who still owes $187,000 in principle on his home.
“We really should be living in Arizona as it is more “disability friendly” and the property taxes are much less,” he said. He can’t though because he is so far underwater on his home loan.
Another example is Collen Percy and her recently retired husband, currently living in Plainfield.
“We’re stuck,” she said. “We would love to sell and go live in a smaller home so we don’t have the upkeep and tax burden.”
Unfortunately, they are $85,000 underwater on their suburban Plainfield home. They’re concerned that rising property taxes are further eroding their home’s value, pushing the opportunity to sell even further into the future.
Illinois has the highest rate of underwater homes
A study of negative equity by real estate site Zillow found that nationwide, less than 10% of homeowners have negative equity in their homes.
In Illinois however, 16.4 percent of homeowners owe more on their mortgage than their home is valued at. Nationally, only the State of Louisiana had a higher rate.
In Chicago, the negative equity rate is at 20%, overtaking Las Vegas as the city with the highest negative equity rate in the nation.
The combination of negative equity and high property taxes can mean homeowners who want to relocate can’t actually sell their homes.
“It makes it difficult to move for a new job opportunity to relocate elsewhere,” Zillow economist Sarah Mikhitarian said.
The high property tax rates in Illinois serve to help slow or decrease the value of homes.
Home prices in Illinois, while up since 2013, are still down 10 percent compared with the market peak in 2006, according to data from the Federal Housing Finance Agency.
Illinoisans need reforms to make owning a home more affordable, and staying in or moving to the Land of Lincoln more attractive.
You may call The Law Offices of Lora Matthews Fausett P.C. with your questions: 630.858.0090
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The Law Offices of Lora Fausett P.C. provides real estate law services including loan modifications, buying and selling legal assistance, short sales and deeds in lieu, mortgage foreclosure defense, and more.