Chicago Foreclosure Activity: Biggest Increase In Almost 4 Years

Last week ATTOM Data Solutions updated the data on their RealtyTrac Web site and also released their Q3 2019 US Foreclosure Market Report. My intentionally attention grabbing headline comes from looking at the RealtyTrac data. It is indeed accurate to say that September’s Chicago foreclosure activity had the biggest year over year gain in almost 4 years but in reality it was only an 8.4% increase. Compare that to many previous months with 20 – 30% decreases and the 3 previous months all setting record lows in activity. If you look at the graph below you’ll see just how volatile the data is so I wouldn’t get too concerned about a single blip.
It looks to me like September’s increase was mostly driven by an increase in defaults, which is not a good thing since these represent the start of new foreclosures. Both auctions and bank repossessions were near the lower end of their historic range.
ATTOM Data Solutions’ foreclosure market report highlights that foreclosure activity across the nation was actually down in the third quarter by 19% from a year ago and that this hit a 13 year low. They also point out that foreclosure activity is currently 49% below the pre-recession averages (that’s the 2006 – 2007 timeframe).
Another interesting tidbit from this report is that Illinois currently has the 4th highest foreclosure rate in the nation but that is still down 29% from our pre-recession average.

Chicago Foreclosure Activity
Chicago foreclosure activity has declined dramatically since the housing crisis.

Chicago Shadow Inventory

As I’ve mentioned in previous posts on foreclosures I like to keep an eye on the total number of Chicago homes in the foreclosure process because that’s what really impacts the real estate market – the shadow inventory. The graph below shows fairly steady progress in working through this backlog but I’ve recently been mystified by essentially no progress for 9 months. The line went flat after a big drop – until today when it dropped by another 1107 units.
We’ve seen this before. Instead of consistently working its way down it takes these long pauses, followed by big steps down. Of course, I don’t believe this is a real effect at all. It must be a data problem – or someone is periodically cleaning up messes. Kinda annoying. Nevertheless, in the last year this shadow inventory has declined by 2081 homes, which is a pretty healthy improvement.

Chicago homes in foreclosure
Chicago’s shadow inventory of homes in foreclosure is about 1/5 of what it once was.

#Foreclosures #ChicagoForeclosures
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.

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