Recently, the Chicago Tribune posted an article about REO properties and the fact that from 2005 to 2008, the Chicago housing market hs seen a 575% increase in REO homes. First, what is an REO?
An REO (Real Estate Owned) is a property that goes back to the mortgage company after an unsuccessful foreclosure auction. The property “reverts” to the bank. It becomes an REO, or “real estate owned” property.
By comparing the two images with red dots indicating the number of REO homes in each neighborhood, we can see that there has been an increase in REO across all neighborhoods. While most of the increase comes from the outer neighborhoods, no neighborhood is immune. Even neighborhoods in the center of the city such as the Near North Side and Lincoln Park have their share of REO properties, albeit a fraction of those we see in the South and West areas of the city.
Hardest hit with REO properties is the Austin neighborhood with over 600 REO properties in 2008. On the other end of the spectrum is the Armour Square neighborhood with only 2 REO properties. You can see the specific breakdown for each Chicago neighborhood here.
