A little more than a week ago RealtyTrac’s September foreclosure market report was rather ho hum – low single digit changes in foreclosure activity at the national level. However, Chicago foreclosures showed a significant spike in activity, driven primarily by an increase in bank repossessions, which were up 87% from last year and up 235% from August. But August had the lowest level of bank repossessions since I’ve been collecting the data so it could just be a timing thing – i.e. many August repossessions got delayed into September for whatever reason.
Also, when you look at the big picture in the graph below you can clearly see that month to month volatility like this is pretty normal. The overall trend is still a bottoming of the activity.
As for the other categories of foreclosure activity – defaults and auctions – that was in line with recent levels.
Chicago Shadow Inventory
Repossessions, along with auctions, are the later stages of the foreclosure process and as such lead to properties getting back into productive use. So, as long as properties exit the foreclosure process at higher rates than defaults occur we should see a decline in homes in foreclosure – i.e. the shadow inventory.
The graph below tracks this shadow inventory over time and indeed it continues to decline but at a much slower rate than it did in early 2013 when I first started to collect the data.
RealtyTrac also recently released their 3rd Quarter Zombie Foreclosure and Vacant Property Report, which looks at homes that are in the foreclosure process and vacant – i.e. they are possibly abandoned and neglected. This report looks at the data a lot of different ways – percent of vacant homes that are in foreclosure, percent of vacant homes with mortgages, and percent of vacant homes that are underwater – but it doesn’t exactly answer the obvious question: what percent of homes in the foreclosure process are zombies?
However, I can answer that question by looking at various data from RealtyTrac and it looks like 20,050 homes are zombies out of 870,247 homes in the foreclosure process. So that’s only 2.3%, which is a lot smaller than I expected. The media makes it sound like these zombies are everywhere, which might grab attention with the popularity of zombie themed entertainment, but it’s just not true.
#realestate #chicagorealestate #foreclosures
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. Please be sure to verify your email address when you receive the verification notice.