It’s always problematic to try to determine when a trend has broken because you are always trying to react to the latest month’s data and one month can easily have undue influence on your eyes. This challenge is clearly top of mind as we try to read the tea leaves in RealtyTrac’s October US Foreclosure Market Report released this morning along with data specific to Chicago.
As you look at the graph below focus on the blue area – properties receiving some kind of default notice. This is the earliest stage of the foreclosure pipeline and it feeds all other stages so it’s a key indicator of where foreclosure activity is really headed. The numbers for October are basically flat to May of this year so that’s 6 months without a significant decline. If this is really an indication of where foreclosure activity is going to be in Chicago for a while then it’s rather disappointing since up until now the overall numbers looked like they were on a decline.
This spike in defaults earned Chicago special mention in the report as having the third highest foreclosure rate among the large metro areas:
Chicago foreclosure activity dropped annually for the 11th consecutive month, but a 30 percent month-over-month jump in foreclosure starts helped the metro area’s foreclosure rate rank third highest among the 20 largest metro areas nationwide in October. On in every 427 Chicago-area housing units had a foreclosure filing during the month.
Chicago Shadow Inventory
However, there is a more optimistic trend visible in the picture of homes in some stage of the foreclosure process. Those numbers continue to show a steady decline of about 1000 units per month – for now. Of course, if the number of defaults stabilizes then this decline will eventually peter out.
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