RealtyTrac's May foreclosure market report reveals that foreclosure activity in Chicago is continuing to trend downward and is now at the lowest level since I've been tracking it - 4 years. Looking at the graph below you can see that in particular bank repossessions are way down from a couple of months ago and auction activity is also down substantially. This picture is consistent with the much lower level of distressed sales than in years past.
Meanwhile, the number of properties that are in some stage of foreclosure - the dreaded shadow inventory - is also trending downward. Chicago currently has about 34,204 homes in the foreclosure process, which is down a couple thousand from early May.
Interestingly the report notes, as you would expect, that states with the much smoother non-judicial foreclosure process have already moved through the foreclosure crisis and are on the way up.
Among the nation’s 20 largest metros, those with the biggest increases in median home prices tended to be in states where a non-judicial foreclosure process has allowed foreclosures to be absorbed by the market more quickly. Seven of the 10 metros with the biggest jumps in median home prices from a year ago were in non-judicial states, while all five metros with flat or declining median prices were in states with a judicial foreclosure process.
Of course, nothing is easy in Illinois. We have a judicial foreclosure process that pretty much guarantees that you can live in your house for 2 years for free before you get thrown out while government bureaucracy bogs the system down.
Speaking of ineffective government policies...Daren Blomquist, vice president at RealtyTrac, noted that “Foreclosure activity continued to bounce back in some markets where it may have appeared the foreclosure problem had been knocked out by an aggressive combination of foreclosure prevention efforts over the past two years.” In other words, you can't legislate away the laws of economics.
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