TCW - Jobs, Money & Opinion

Foreclosures Drive the Chicago Residential Real Estate Market

RE Blog-5.30.11.jpgMany homeowner's and investors in the Chicago area are disappointed by the current value of their residential property that appears to still be decreasing.  They are concerned "if and when" the price for their home will return from record lows.

Most who bought their home between 2000 and 2007, during the housing "bubble" are greatly affected by the downturn in the market.  The value of their property is often 30-40% less than the market highs during this time; much lower than economists expected.  Many homeowners that do not have to sell are waiting on the sidelines for the residential market to improve.  But, will it and when?

The driving issue which is slowing down a recovery is the large amount of foreclosures that are still entering the Chicago market from homeowners and investors that can't afford to maintain and finance their property. 


Keith Jurow who publishes the MVP Housing Report that analyzes the top cities in the country by accumulating data from a number of sources including: realtytrac.com, Midwest Real Estate Data and FNC.com, predicts that the value of homes in the Chicago metro area will continue to decline. Here are some of his findings:

  1. For the first (3) months of this year, more than 50% of all sales in Chicago were REO's or short sales.  In the seven county Chicago metro markets, nearly 52% of all sales in February were distressed properties.  These numbers tell us that the amount of "normal" sales is steadily shrinking, bringing down the value of all residential real estate.
  1. Prices for single-family homes less than 2,000 sq.ft. are back to levels of 8/2002, which means they are worth less than owner's paid.  So few buyers between 2004-2006 provided a down payment more than 10% with most having a total mortgage debt that exceeds the current value of their home.
  1. 45,182 properties had foreclosure fillings serves on them in 2009 and even more in 2010.  For the six county Chicago areas this swells to 150,000.
  1. There are a large number of first liens that are delinquent by 90-plus days that have not even been put into default yet by servicing banks.
  1. At the end of 2010, more than 11% of all active first liens in the Greater Chicago MSA were seriously delinquent by at least 90 or more days or in a formal default.

 The bottom-line is that we are still in for a "rocky road" in Chicago residential real estate.  For more information on the Chicago report by Keith Jurow check out MVP Housing Report on the popular investor site, Minyanville.

Recommended

[?]

Recent Posts

Subscribe

No Comments

Leave a Comment?

Some HTML is permitted: a, strong, em

What your comment will look like:

said:

what will you say?

Most Active Pages Right Now

ChicagoNow.com on Facebook

TCW - Jobs, Money & Opinion on Facebook

Today's Chicago Woman on Facebook