As I mentioned last month RealtyTrac is not releasing their normal Foreclosure Market Report for February. However, they did just release their updated data which shows that Chicago foreclosure auctions surged last month and you can see how dramatic this is in the graph below. The yellow area represents the auction activity and it's up 313% over last month and 261% over last year. This is actually good news since it shows that progress is finally being made in clearing the backlog of foreclosures.
The other area that showed a big increase was bank repossessions, shown in purple below, which jumped 77% over last year. Again, this is an area that shows progress in dealing with the backlog since it's the final stage before a property is put on the market.
The area that remains low is defaults, shown in blue below, and that's also good news as defaults represent the early stage of the foreclosure process that feeds into the pipeline.
Chicago Shadow Inventory
Sadly, the total pipeline of Chicago properties in the foreclosure process actually increased last month - up over 600 units from last month. Since I've been tracking this data I've only seen an increase 3 other times, and never an increase of this magnitude. So this is certainly not good news but it's also a bit mysterious. After all, the bank repossessions and auctions have been increasing so I would have expected this shadow inventory to be declining. Of course, what RealtyTrac tracks is not the completion of bank repossessions or auctions but rather the filing of notices of those events. So there could be a delay in seeing the benefit from those actions. We'll see what happens to these numbers over the next few months. I'd expect to see them decline.
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.