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The biggest lingering concerns in the housing market are the high level of underwater homeowners and how long properties spend in distress without being resolved.

Underwater homeowners owe more on their home than it's worth. They're more likely for foreclosure due to a sudden job loss, illness or divorce. They also have a harder time qualifying for a loan modification or refinance to better terms.

Loans have to already be delinquent to qualify for a modification.

Federal programs have been expanded so underwater borrowers can qualify to refinance, even with negative equity. Previously, requirements were for the homeowner to have positive equity. A higher pace of refinance activity is believed to be helping lower delinquency rates, according to Nelson's and Richter's findings.

A refinance pays off an existing loan and issues a new loan usually at better interest rate terms.

On average more than 20 percent of Ohio homeowners were underwater in 2011 and 2012, although the levels of negative equity vary widely across the state ranging from 5 to 44 percent.

Home prices are not rising in Ohio as fast as states with stronger recoveries, which would help restore equity, Richter said.

"If they don't have any equity in their home and they have a shock...by not making a house payment they're not going to lose equity," Richter said.

The other trouble spot is what happens to a property once it falls more than 60 days delinquent. The longer a loan is delinquent, the less likely that it will recover.

Of all the loans statewide that became distressed in the first six months of 2011, half of them were still delinquent a year later, the researchers said. The turnaround to complete a foreclosure is "sluggish."

During the time it takes to process a foreclosure, properties can become vacant, attract vandalism and crime, and lose property value.

"It adds uncertainty to the housing market," Richter said. --

Dayton area housing market by the numbers

11,609 homes sold in 2012, an 8.7 percent rise from 10,680 sales in 2009

$122,425 average home sold price in 2012, down less than 1 percent from $123,273 in 2009

36% Montgomery County homeowners "underwater"

8% Ohio mortgage delinquency rate at end of 2012, versus 10% at end of 2009

SOURCES: Dayton Area Board of Realtors, Federal Reserve Bank of Cleveland, Zillow Inc.

Clark County housing market by the numbers

1,122 homes sold in 2012, an 11.6 percent rise from 1,005 sales in 2009

$93,932 average home sold price in 2012, compared to $93,528 in 2009

31% Clark County homeowners "underwater"

8% Ohio mortgage delinquency rate at end of 2012, versus 10% at end of 2009

SOURCES: Western Regional Information Systems & Technology, Federal Reserve Bank of Cleveland, Zillow Inc.

Butler County housing market by the numbers

3,812 homes sold in 2012, a 17 percent rise from 3,259 sales in 2011

$136,675 average home sold price in 2012, compared to $134,464 in 2011

29% Butler County homeowners "underwater"

8% Ohio mortgage delinquency rate at end of 2012, versus 10% at end of 2009

SOURCES: Multiple Listing Service of Greater Cincinnati, Federal Reserve Bank of Cleveland, Zillow Inc.