I’m running out of ways of saying that Chicago’s foreclosure problem is gradually going away. Every month when RealtyTrac releases their foreclosure market report the news is pretty much the same. Either there isn’t much change or the activity declines further. Such is the case with the May foreclosure market report.
As you can see in the graph below the big drop over time is in defaults. When prices rise the number of people underwater on their mortgages declines and the prospects of actually coming out ahead improves so people are less likely to want or allow someone to take their home away. Nationally foreclosure starts reached their lowest level since December 2005.
Nevertheless, the Chicago area remains among the top 20 metro areas in default rates at #16 according to RealtyTrac.
Chicago Shadow Inventory
And the total number of Chicago homes in some stage of foreclosure also continues to decline. They are either being sold off or redeemed prior to completion of the foreclosure process at a faster rate than new defaults are entering the pipeline. This is why we continue to see a decline in the percentage of sales that are distressed.
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