RealtyTrac released their October Foreclosure Market Report on Thursday and it’s a mixed bag. I certainly didn’t find the national data that interesting or enlightening. For Chicago the most interesting observation is that defaults, on a year over basis, have either been declining or rising by small single digit percentages in every month since I’ve been tracking the component data – except one month. Clearly there has been a tremendous improvement in our housing market that has stemmed the influx of foreclosure properties.
On the other hand, bank repossessions and auctions were up over last year but they jump around so much that you really have to mentally smooth out the data when you look at it. With these two categories of activities representing the tail end of the foreclosure process you would actually like to see them running at fairly high levels to clear out the shadow inventory of foreclosures.
Chicago Shadow Inventory
The only problem with that narrative is that despite a fairly steady flow of repossessions and auctions over the last few years Chicago’s shadow inventory has really flattened out. Gone are the days when it would decline by 800 or more units in one month. In fact, October’s level was actually up over September. That was the second time in less than a year where we saw an actual increase in the level of shadow inventory.
I don’t understand why this is happening since you would expect the auctions and repossessions to be steadily driving this number down. Could we really have reached a steady state where we are perpetually dealing with the most intractable properties that you can’t even give away?
#ChicagoForeclosures #foreclosures #ChicagoRealEstate
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.