ABC7's Leah Hope has more on the impact of this downturn:
Those trying to relocate for a job or find more space for a growing family will likely not get what they want if they are trying to sell. Understanding the market and options is helping some folks move forward.
The park is their backyard for now. Homeowner Erica Rivera and her sons live in a condo in east Garfield Park. The boys need space, but selling now is not an option.
"There's no condos listed in our area that are not short sales...so we we're not going to sell for less than it's worth," Rivera said.
Rivera will try rent their condo and rent a house with a yard for the boys.
"It's painful," said Rivera. "That was the first place that I bought. I bought six years ago, thinking in the future I'll make some money off of it, and no."
In the last year, home values have dropped 13.8 percent in the Chicago area. That's down 38 percent from the peak.
The Chicago area hit a new record with 45.7 percent of homes with negative equity -- meaning homeowners owe more on their mortgage than the home's worth, commonly referred to as upside down or underwater.
"Underwater homeowners across the country really keep people from taking advantage of economic mobility. It's a drag not just on the housing market but the greater economy," said Geoff Smith, Woodstock Institute.
Smith is senior vice president with the non-profit watchdog group the Woodstock Institute. He suggests homeowners focus on getting mortgage payments affordable and hanging on.
"It's a very difficult situation," said Smith. "You don't expect the housing market to return in any dramatic way. That would mean patience is the most important virtue."
The good news in all this: it's a great time to buy.
Jen Lavender-Thompson took advantage of the good homes prices and bought last year. The trade off: They lost money selling, but hoped the value of the new South Loop row house will eventually grow.
"It could take up to a year to sell your condo now," said Lavender-Thompson. So, yeah, I do feel like you're kind of shackled to your real estate now."
Smith says in this market homeowners who adapt or reign in their expectations will have the ability to move more freely. So instead of expecting to make money, he says, the new attitude is "breaking even" is a win and the use of the home was value enough.
