The RealtyTrac foreclosure market report for October, which was released yesterday, shows a slight increase in Chicago foreclosures and foreclosures at the national level from the previous month. However, the increase is in line with the normal variability in these numbers so it really doesn’t tell us anything. The more telling trend is seen by comparing the numbers to the previous year and that’s down by around 22% – in total.
Auction activity was actually up by a slight amount over last year but the most relevant component of the activity are the defaults, which represent the front end of the pipeline, and that shows healthy declines from last year – as does the bank repossessions.
Daren Blomquist, vice president at RealtyTrac, had the following thoughts on the October uptick for the nation:
The October foreclosure numbers are not a complete surprise given that over the past three years there has been an average 8 percent monthly uptick in scheduled foreclosure auctions in October as banks try to get ahead of the usual holiday foreclosure moratoriums. But the sheer magnitude of the increase this year demonstrates there is more than just a seasonal pattern at work. Distressed properties that have been in a holding pattern for years are finally being cleared for landing at the foreclosure auction.
There is still strong demand from the large institutional investors at the foreclosure auction in some markets, but even in markets with decreasing demand at the foreclosure auction, banks can be confident in selling REO properties quickly and at a good price. That’s because there is still strong demand from buyers, particularly in the lower price ranges, combined with a dearth of distressed homes listed for sale.
RealtyTrac also provided a graph from which we can see how Chicago compares to other major metro areas in terms of improvement over the last year. As you can see we are one of the metro areas showing the greatest improvement.
Chicago Shadow Inventory
The backlog of Chicago foreclosures is still steadily declining, albeit at a slower rate than a year ago.
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