The U.S. Home Equity & Underwater Report for December 2013 showed Illinois was one of the highest states nationwide for residential properties considered deeply underwater, with 32 percent of all properties so designated. Only Nevada (38 percent) and Florida (34 percent) were higher.

Homes considered deeply underwater carry a loan-to-value (LTV) ratio of 125 percent or more. That means that if the homeowner were to sell a property at full value, the purchase price would not cover the full amount of the outstanding loan.

The study also found Chicago continues to suffer a glut of distressed homeowners and properties, with fully a third of all properties considered deeply underwater. According to RealtyTrac, more than 700,000 properties in the Chicago-Naperville-Joliet metro area had a LTV ratio of greater then 125 percent.

Within the city limits, some areas of Chicago struggle worse than others with housing issues, particularly foreclosures.

A 2013 study of the first half of the year by the Woodstock Institute shows a key section of the southwest side of the city contains a particularly strong concentration of foreclosures.

The Chicago City and Regional Foreclosure Activity report shows two adjacent wards on the Southwest Side—the 13th and the 18th—had the highest levels of properties with foreclosure filings in the first half of 2013.

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