I'm really running out of ways of saying that Chicago foreclosure activity has bottomed out. The graph below has been updated based upon this morning's release of the RealtyTrac Foreclosure Market Report for December and, as you can see, the data has been bouncing around at the same level for several months now.
The good news is that foreclosure activity is running at the lowest levels since I've been tracking the data. That's good news when it comes to defaults, which represent potentially new foreclosures. However, auctions and bank repossessions are also running at very low levels and that's actually not so good because they represent the ultimate resolution of foreclosures - unless of course the homeowner actually redeems their property.
One other little tidbit that came out of the RealtyTrac Foreclosure Market Report was that the Chicago metro area had the 14th highest foreclosure rate in the country at 1.58%.
Chicago Shadow Inventory
This low level of auctions and bank repossessions explains why the shadow inventory of properties stuck in the foreclosure process has also bottomed out in Chicago. Of course, I don't know what a normal level should be.
Looking back on the entire year for the whole country RealtyTrac noted that 2015 had the lowest foreclosure activity level since 2006, which was essentially the peak of the housing bubble. In addition, 2015 was the second year in row during which the foreclosure rate was below 1% - 0.82% to be exact. And foreclosure starts hit a 10 year low. According to Daren Blomquist, vice president at RealtyTrac, foreclosure activity has returned to normal across the nation and we are in the final stages of cleanup:
In 2015 we saw a return to normal, healthy foreclosure activity in many markets even as banks continued to clean up some of the last vestiges of distress left over from the last housing crisis. The increase in bank repossessions that we saw for the year was evidence of this cleanup phase, which largely involves completing foreclosure on highly distressed, low value properties.
#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.