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Homeowners Hold Their Breath

Why underwater owners are still years away from resurfacing

Home equity in the Chicago area is showing the effect of nearly five years of declining house prices. At the end of 2010, according to a report from the National Association of Realtors (NAR), homeowners here who bought in 2005 were underwater by $53,146 (the average amount their debt on the home exceeded the home’s value). When will things turn around? Assuming an immediate rebound in prices in 2011 and a price growth of 4 percent a year, it will take six years, the report stated. “[But] if prices stay flat for a year and then go back to growing normally, you’d have to factor that in,” says Danielle Hale, an NAR research economist. “It would take that much longer.”

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