RealtyTrac came out with their July Foreclosure Market Report the other day and it shows a continued depressed rate of foreclosure activity in Chicago and the nation. In the Chicago graph below you can see that this is the 10th month in a row where the foreclosure activity is below the previous year, which was also true of the entire country. RealtyTrac doesn't comment much on the local markets but they did say that for the entire country July had the lowest foreclosure activity in 44 months. I think it's a safe bet that the same is true for the Chicago housing market.
Unfortunately, none of this means much. It's not like the foreclosure problem is going away. RealtyTrac continues to blame foreclosure processing delays for the decline and these delays are a direct result of increased bank scrutiny and a myriad of government assistance programs that are only dragging out the inevitable:
July foreclosure activity dropped 35 percent from a year ago, marking the 10th straight month of year-over-year decreases in foreclosure activity and the lowest monthly total since November 2007. This string of decreases was initially triggered by the robo-signing controversy back in October 2010, which forced lenders to substantially slow the pace of foreclosing...It appears that the foreclosure processing delays, combined with the smorgasbord of national and state-level foreclosure prevention efforts — including loan modifications, lender-borrower mediations and mortgage payment assistance for the unemployed — may be allowing more distressed homeowners to stave off foreclosure.
Unfortunately, the falloff in foreclosures is not based on a robust recovery in the housing market but on short-term interventions and delays that will extend the current housing market woes into 2012 and beyond. A stabilizing economy and improving job market are the long-term keys to a housing market recovery.