Why is Chicago still identifiable as one of the cities in America with the largest share of distressed home sales, including foreclosures and short sales? That is a question recently posed in an article in Crain’s Chicago Business, which reported that “Chicago’s housing market is struggling to slim down its stock of distressed homes.” A business data report from CoreLogic made clear that more than 20% of houses sold in September 2015 were identified as foreclosures or short sales.
What do you need to know about foreclosures in Chicago? Do the recent statistics suggest that our city has not fully recovered from the financial crisis?
Rate of Distressed Home Sales in Chicago is Double the National Average
Based on the data gathered by CoreLogic, Chicago has the “fifth-highest percentage [of foreclosures and short sales] among major U.S. cities and more than double the national rate of 9.7%.” The rate of distressed home sales in Chicago is not too far off from the highest number in the country. The percentages look like this, in order of highest-rate of distressed property sales:
· Orlando, Florida (22.7%);
· Tampa, Florida (21.5%);
· Baltimore, Maryland (21.2%);
· Miami, Florida (21.2%);
· Chicago, Illinois (20.8%);
· Newark, New Jersey (15.7%);
· Las Vegas, Nevada (15.5%);
· St. Louis, Missouri (14.4%); and
· Atlanta, Georgia (12.6%).
As you can see, there is a relatively large drop-off after Chicago’s statistics, and the rates among the top five cities are comparatively close in number. Statistics suggest that the rate of distressed home sales in Chicago is not declining with a quick enough pace. At this same time last year, the rate of distressed property sales was at 21.4%—a number that is less than one point higher than this year’s total.
Many Chicago-Area Homes Remain Underwater
According to a real estate agent in the Chicago area, the “region’s volume of distressed homes is coming down, but it’s not happening fast enough.” She predicts that we will continue to see high numbers of distressed home sales for at least two more years, and possibly more. Why have we not witnessed a quicker decline in the number of foreclosure sales and short sales in our city?
Generally speaking, the “local residential market has bounced back from the crash,” the article emphasizes. At the same time, however, home price growth has not been moving in a steadily upward direction. As a result, a number of houses in Chicago remain underwater, meaning that they are worth less than what the owner currently owes on the mortgage. When homeowners cannot make enough money by selling their homes to pay off their mortgages, they are more likely either to default (resulting in a foreclosure) or to agree to a short sale.
Another potential reason for the high number of distressed home sales in Chicago is the fact that Illinois is a “judicial state” when it comes to foreclosures. In other words, all foreclosures go through our courts, and this can take a long time. At the same time, many Chicagoans are not making the kind of money they were before the crash and thus are not able to afford monthly mortgage payments.
If you have questions about foreclosure in the area or if you need help avoiding foreclosure, you should discuss your options with an experienced Oak Park foreclosure defense attorney as soon as possible. Contact the Emerson Law Firm today to learn more about our services.
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