State

Illinois residents’ underwater homes keeping them here

Steinar Andersen would like to move out of Illinois to a more "disability friendly" state but cannot leave as his house is heavily underwater. He is among the 16.4 percent of Illinois homeowners who owes more on his mortgage than his house is worth.
Steinar Andersen would like to move out of Illinois to a more "disability friendly" state but cannot leave as his house is heavily underwater. He is among the 16.4 percent of Illinois homeowners who owes more on his mortgage than his house is worth.

Steinar Andersen is a disabled veteran, widower and father of a disabled stepson who is ready to move out of Illinois.

But he can’t. Employed as an information technology manager, he and his wife bought an old farmhouse near Huntley in 2005. After the housing bubble burst and the state widened a nearby road, he’s deeply underwater on his loan.

“I still owe $187,000 in principle,” said Andersen, 55, now fully disabled from a service-related injury. “Once I get to $90,000 in principle in about 10 years, I’ll be able to sell at a $130,000 loss.”

Andersen would like to move out of state.

“We really should be living in Arizona as it is more ‘disability friendly,’ and the property taxes are much less,” he said.

Andersen isn’t alone. 

Collen Percy and her recently retired husband are $85,000 underwater on their suburban Plainfield home. They’re worried about property taxes eroding their home’s value further, pushing a potential payoff of their home further into their twilight years.

“We’re stuck,” she said. “We would love to sell [our home] and go live in a smaller home so we don’t have the upkeep and tax burden.”

It’s no secret that a large number of Illinoisans want to become ex-Illinoisans. A poll conducted by Southern Illinois University at Carbondale showed that every other person they asked about running for the border would if given the opportunity. Their reasons were common gripes for residents here – taxes, weather, lack of jobs or education elsewhere.

Two new reports on home equity reveal that a number of Illinoisans, like Andersen and Percy, may be chained to the state by a mortgage larger than their home is worth.

A study of negative equity by the real estate website Zillow found 16.4 percent of Illinois homeowners with a mortgage owed that is more than their home was valued as of the end of 2017.

CoreLogic’s data from the first quarter of 2018 showed 9 percent of mortgages in Illinois are underwater. Nationally, only Louisiana (10.3 percent) had a higher percentage of underwater mortgages.

According to Zillow’s estimates, almost one in 10 Huntley homeowners are underwater on their mortgages, amounting to $62 million in negative equity. Like Andersen, those borrowers would have to pay the balance to sell their home.

“There is nothing left in this state to want to remain living here,” Andersen said.

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