Slowly But Surely Chicago Works Through The Foreclosure Crisis

It’s no wonder that there are fewer and fewer foreclosures being sold in Chicago lately. RealtyTrac just released their September Foreclosure Market Report and although it shows a slight uptick from August that’s just noise. There is an unmistakable longer term downward trend. For instance the numbers are down 43.5% from a year ago and we’ve been on that trajectory for a while now. The foreclosure component showing the greatest decline from last year are the defaults. You might not be able to tell that from the graph below but trust me it’s there. Chicago’s rebounding housing market is helping with that.

The number of Chicago homes in foreclosure – i.e. the shadow inventory – is on a steady decline at about 1000 homes per month. I started to track this on the graph below back in February. It’s basically a straight line at this point. Although this number could never reach zero at this rate we would be through the shadow inventory within 29 months.

Here is Daren Blomquist’s monthly quote on the national foreclosure picture. He’s a vice president at RealtyTrac:

The September and third quarter foreclosure numbers show a housing market that is haltingly returning to health. In a healthy housing market foreclosures are rare but streamlined while still protecting the rights of the homeowner. While foreclosures are clearly becoming fewer and farther between in most markets, the increasing time it takes to foreclose is holding back a more robust and sustainable recovery.

The sharp jumps in foreclosure activity in some local markets may come as a surprise to some. These spikes in activity demonstrate that while millions of distressed homeowners have been pulled back from the precipice by foreclosure prevention programs over the past several years, once those programs expire or are exhausted, a percentage of these troubled homeowners are still susceptible to falling into foreclosure. In addition even slight economic downturns at the local or regional level can push these homeowners hanging on by a thread over the edge.

You mean to tell me that the government can’t solve everyone’s problems?

Elsewhere in the report RealtyTrac pointed out that “September was the 36th consecutive month with an annual decrease in U.S. foreclosure activity” and “U.S. foreclosure starts in the third quarter were at a seven-year low.” Not bad.


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