After hitting at least a 5 year low in November, Chicago foreclosure activity spiked at the end of the year according to data that was part of RealtyTrac’s 2014 Year End Foreclosure Market Report released yesterday. The data in the graph below goes back to early 2009 and you can see that the spike in December we almost entirely due to a huge increase in the number of properties scheduled for auction. Nevertheless, overall activity is still down from last December.
Daren Blomquist, vice president at RealtyTrac, discussed the rise in auction activity which is also occurring at the national level:
There was an increase in scheduled foreclosure auctions in some judicial foreclosure states in 2013, and as we expected that resulted in a rising number of sales to third-party investors at foreclosure auctions in 2014. We expect a continued high level of sales to third-party investors at the foreclosure auction in 2015 corresponding to the recent rise in starts and scheduled auctions.
At the national level foreclosure starts have recently picked up after steadily declining for 5 years (see graph below). However, Andres Carbacho-Burgos, Senior Economist at Moody’s Analytics, noted that “The December surge in foreclosure starts is not a cause for concern, as it comes from a previously existing supply of distressed properties. The national pool of distressed mortgages has not increased despite the surge in foreclosure filings.”
Chicago Shadow Inventory
The graph below shows the backlog of Chicago properties that are in some stage of foreclosure. Although it has been steadily declining ever since I started to track it you can clearly see how the decline is tapering off. It’s entirely possible that we are fast approaching the limits to the decline in foreclosure activity.
Daren Blomquist commented on the same patterns in foreclosure activity at the national level:
The U.S. foreclosure numbers in 2014 show a foreclosure market that is close to finding a floor and stabilizing at a historically normal level. But a recent surge in foreclosure starts and scheduled foreclosure auctions in several states in the last few months of 2014 indicate that lenders are gearing up for a spring cleaning of deferred distress in the first half of 2015 in some local markets.
#realestate #chicagorealestate #foreclosures
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