Chicago Foreclosure Activity: Shadow Inventory Hits New Low

ATTOM Data Solutions (the parent of RealtyTrac) released their April Foreclosure Market Report last week along with their Chicago foreclosure activity data. The nation hit the lowest level of activity since November 2005 and as the release points out:

A total of 34,085 U.S. properties started the foreclosure process in April, down 6 percent from the previous month and down 22 percent from a year ago and continuing well below the pre-recession average of more than 77,000 foreclosure starts per month between April 2005 and November 2007.

The release includes the graph below that plots foreclosure starts but you should note that “foreclosure activity” includes more than just foreclosure starts. What the graph also shows is that the rate of completions is now very close to the rate of starts which means that the banks are finally dealing with the problems almost as fast as new ones pop up. However, I don’t believe that a completion in their sense is the only way for a foreclosure to be dealt with – otherwise we would have seen a huge spike in shadow inventory over the last few years with the gap shown. I suspect that a fair number of homeowners are able to redeem the property and I don’t think that is counted as a completion below.
Daren Blomquist, senior vice president at ATTOM Data Solutions, commented on the dramatic decline in foreclosure activity over the last few years:

Foreclosure activity continued to search for a new post-recession floor in April thanks in large part to the above-par performance of mortgages originated in the past seven years. Meanwhile we are seeing an elevated share of repeat foreclosures on homeowners who often fell into default several years ago but have not been able to avoid foreclosure despite the housing recovery.
The data for Chicago shows a similar low point in total foreclosure activity as shown in my graph below. However, as I pointed out last month, there has been a bit of a recent uptick in foreclosure starts lately, which is a little concerning. In addition, auctions hit the lowest level in the last 16 months while bank repossessions hit the lowest level in the last 4 months. Neither of these last two developments is really good because we want these foreclosures to be resolved and that’s a significant way for them to be resolved.
Chicago Foreclosure Activity

Chicago Shadow Inventory

Speaking of resolving foreclosures…I do track how many are outstanding and the trend is once again looking good after stagnating for a considerable period of time. As the graph below shows we are once again working through the shadow inventory and will hopefully break below 10,000 in the next few months.
Chicago homes in foreclosure#Foreclosures #ChicagoForeclosures
Gary Lucido is the President of Lucid Realty, the Chicago area’s full service discount real estate brokerage. If you want to keep up to date on the Chicago real estate market, get an insider’s view of the seamy underbelly of the real estate industry, or you just think he’s the next Kurt Vonnegut 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.

Enter your email address:Delivered by FeedBurner


Leave a Reply