5 Year Supply Of Distressed Homes In Chicago

 

groundhog-shadow.jpg

Maybe the groundhog didn't see his shadow last week but S&P sure did. Well, actually S&P looked at shadow inventory on January 25 and it was long and dark for Chicago. Shadow inventory is the sum total of all distressed homes that are either already owned by banks or in some stage of trouble on their mortgages - e.g. at least 90 days delinquent on their mortgage payment. As of the end of 2010 Chicago had almost a 6 year supply of such homes - 59 months worth to be exact - and that's up from 52 months at the end of the 3rd quarter and 42 months at the end of 2009.

As I've recently pointed out, distressed homes represent about 50% of all home sales in Chicago and they are putting considerable pressure on all home prices. If these homes are going to be hanging out there for another 6 years what the heck is that going to do to pricing? Will they merely put a lid on future price increases or are we in for further significant declines?

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    Gary Lucido

    After 20 years in the corporate world and running an Internet company, Gary started Lucid Realty with his partner, Sari. The company provides full service, while discounting commissions for sellers and giving buyers rebates.

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