About a week ago ATTOM Data Solutions issued their Q1 2020 U.S. Foreclosure Market Report for the nation and updated their RealtyTrac data. Although foreclosure activity was up 42% from the previous quarter it did manage to come in 3% below Q1 of 2019.
Keep in mind that for all intents and purposes March was basically pre-Coronavirus since the impact of shutting down the economy had not been realized quite yet.
It’s always quite amazing to see just how high this activity once was when we were in the throes of an economic crisis. Are we headed back there? All bets are off. In the short run, no because homeowners are receiving (is that the right word?) forbearance. In fact, we might actually see a temporary decline in foreclosure activity because of this. However, if economic activity remains depressed for too long this will in fact turn into a new foreclosure wave.
In their report ATTOM Data Solutions gave honorable mention to Illinois for having the third highest foreclosure rate in the first quarter and Chicago had the 6th highest foreclosure rate among metro areas with population above 1 MM people.
ATTOM Data Solutions also reported on the average time required to complete a foreclosure. Based on the graph below I’d say that we just hit the lowest completion time in a bit more than 3 years. But it’s still 673 days?!?!?!
For Chicago foreclosure activity came in at the lower end of the recent range. In particular, bank repossessions hit a record low. But that’s not necessarily a good thing because that’s part of the completion process and you don’t want foreclosures piling up.
Chicago Shadow Inventory
The backlog of foreclosures is perhaps the most significant indicator of how serious the foreclosure problem is in Chicago. And we did make some nice progress working through that backlog in March. After plateauing for most of 2019 it finally started another descent. March declined by 331 units and we are now comfortably below 5000 units.
Gary Lucido is the President of Lucid Realty, the Chicago area’s full service real estate brokerage that offers home buyer rebates and discount commissions. If you want to keep up to date on the Chicago real estate market or get an insider’s view of the seamy underbelly of the real estate industry you can Subscribe to Getting Real by Email using the form below. Please be sure to verify your email address when you receive the verification notice.