RealtyTrac Market Report: Not Much Progress In Chicago Foreclosures

Given all the signs of improvement in Chicago foreclosures you would think that the foreclosure data would reflect the positive trends. Nevertheless, the Chicago data from Thursday’s release of RealtyTrac’s November Foreclosure Market Report does not look so exciting and it’s hard to figure out why.
Look at the graph below and you’ll see that total activity remains at the lowest levels since I’ve been tracking the data but it’s not declining further. However, the good news is that defaults hit another low while bank repossessions and auctions continue to exceed defaults. Since bank repossessions and auctions are the ultimate resolution of foreclosures that means that the foreclosure pipeline should be getting thinner.
Chicago Foreclosure Activity

Chicago Shadow Inventory

The only problem with that story is that the shadow inventory – the properties flowing through the foreclosure pipeline – is not getting any lower. It seems to be stuck in neutral, as you can clearly see in the graph below. Sorry that I don’t have an explanation for this but I remain baffled by this whole phenomenon.
Chicago homes in foreclosure
At the national level much the same dynamic is at play with defaults hitting a 10 year low. Daren Blomquist, Vice President at RealtyTrac, discussed how the industry is working through the backlog of foreclosures:

Banks are continuing to work through the backlog of lingering foreclosures, pushing bank repossession numbers higher in the short term even as foreclosure starts drop to new lows. This also means the share of active foreclosures tied to bubble-era loans is shrinking, with 59 percent of all loans in foreclosure originated between 2004 and 2008. While that is still a disproportionate share of active foreclosures, it continues to decrease from 61 percent earlier this year and 75 percent two years ago.

#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 using the form below. Please be sure to verify your email address when you receive the verification notice.

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