RealtyTrac just released their March Foreclosure Market Report – the first report in 3 months as they took a break from this activity to release several other reports. The data for Chicago shows that activity has pretty much bottomed out in the last few months.
It’s hard to tell from one month to the next because of the volatility in the data so this is where the graph below comes in handy. The least volatile segment is the defaults, which is not affected by the whims of banks and courts and which feeds the foreclosure pipeline. Therefore, they are perhaps the best indicator of the outlook for foreclosures and that measure has been showing steady declines on a year over year basis for 42 out of the past 43 months.
RealtyTrac shows a similar pattern at the national level but going all the way back to the early part of 2010 and it looks like the nation is still on a downward trend.
However, Chicago is still in worse shape than it was prior to the recession according to a map that accompanies this report. The broad metropolitan statistical area that extends as far away as Naperville and includes small portions of Indiana and Wisconsin is still running at 17% higher levels of foreclosure activity that before the recession. That map also shows an interesting pattern at the national level, with the east coast of the country also still in worse shape while the west coast is now in better shape.
Daren Blomquist, senior vice president at RealtyTrac, commented on this pattern with some optimism regarding the markets that are lagging in improvement:
Despite a seasonal bump higher in March, foreclosure activity in most markets continues to trend lower and back toward more healthy, stable levels. More than one-third of the 216 local markets we analyzed were below their pre-recession foreclosure activity averages in the first quarter, and we would expect a growing number of markets to move below that milestone the rest of this year — while the number of markets with a lingering low-grade fever of foreclosure activity continues to shrink.
Chicago Shadow Inventory
The other disturbing fact is that the number of Chicago homes in the foreclosure pipeline has actually increased slightly in the last 2 months and is now at it’s highest level in 7 months. That’s going in the wrong direction! It’s also rather surprising since the defaults are declining but it’s hard to tell exactly how many homes exit the foreclosure pipeline via the various channels.
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.