The month of November produced results that were met with mixed emotions. Chicago areas home sales jumped more than 36 percent in November, but the Illinois foreclosure rate was the third highest in the country.
The Illinois Association of Realtors reported that 7,604 detached single family homes and condominiums sold in the nine-county Chicago area last month. In 2011, there were 5,582 sales in November. November marks the 17th straight month of year over year monthly increases in sales.
Several factors contributed to the increase in home and condominium sales. Lenders have loosened up a bit for qualified applicants thus giving more people the option to buy. Pre-foreclosure short sales are becoming relatively easier than in the past thus encouraging sellers to go this route if they can qualify. Then there are those individuals who are simply worried about the uncertainty of the financial markets and who decide to park their funds in real estate.
Not So Good News
According to RealtyTrac, one in every 392 housing units had a foreclosure filing in November in Illinois. Only Florida and Nevada had higher foreclosure rates that Illinois. This marks the 11th consecutive month where foreclosure numbers increased on a year over year basis.
The total number of foreclosure filings on properties, 13,520 was down from October and is a seven month low, but is still up from November of 2011. Illinois continues to buck the national trend which saw a 3% decrease in foreclosure filings in November.
Daren Blomquist, vice president of RealtyTrac attributes the overall drop in foreclosure activity to a 71 – month low in foreclosure starts in November. Blomquist explained that this is “more evidence that we are past the worst of the foreclosure problem brought about by the housing bubble burst six years ago.”
There is still a belief that more foreclosures are on the way. It can take banks one or two years in some cases to get from the beginning of the foreclosure process to the end where they actually are able to put the home on the market. This means that many homes that went into foreclosure in the last one to two years are still out there waiting to hit the market at some point in the future. This bit of uncertainty about the exact number of properties in this situation continues to keep many consumers on the sideline.
It is good news that there has been an increase in pre-foreclosure short sales because that means that many homes heading for foreclosure were sold prior to that lengthy process. That oftentimes means the homes were sold while they were still in relatively good condition thus helping improve the sales prices. This helps strengthen consumer confidence in the shaky real estate market.
The mixed signs mean at the very least that there is a lot of activity in the real estate market. Sales are increasing and many buyers are going the short sale route to get out of one bad deal so they can move on and hopefully qualify for a home purchase again in the future. Lenders are not giving away money, but they are accepting applications and writing mortgages at an increasing rate for qualified buyers. Illinois continues to lag behind with the third highest rate of foreclosures, but sales are increasing thus showing that things are improving.
See Our Related Blog Posts:
The "Foreclosure Discount"
Short Sale Snafus