More Renters Due to Foreclosure Crisis

We are nearing a decade since the housing crash occurred, homeowners began dealing with foreclosure in large numbers, and the recession began. Experts tell us that, as a nation, we are firmly within a period of economic recovery. Yet have Chicago residents truly gotten back to a way of living that many enjoyed prior to the housing crash? According to a recent article in the Chicago Tribune, there are far more renters in the U.S. than there are homeowners, suggesting that the recession may have had a more significant impact than some of us might have been led to believe.

Lingering Effects of the Foreclosure Epidemic

The recession, and the stark economic difficulties it brought, may not have faded as soundly as some have suggested. In particular, the after-effects of the foreclosure epidemic remain quite visible in the ratio of homeowners to renters across the country. Many of the current renters in the country dealt with their homes going into foreclosure. While they may have bounced back economically and gotten their personal finances under control, the history of foreclosure and economic setbacks may be what has left so many Americans as renters.

Before the housing crash, Americans tended to have a higher rate of homeownership than citizens of most other nations. However, as the article explains, a recent study conducted by the Harvard Joint Center for Housing Studies explored “rental trends in the U.S., Canada, and Europe and reported that Americans are now average rather than remarkable.” To be sure, approximately one-third of all U.S. residents rent their apartments or houses, a number that places our country “right in the middle of households that rent throughout the nations studied.”

In addition to determining the sheer number of renters in the U.S. compared to those in other similar countries, the study also established that Americans actually are worse off in certain regards than other renters in Canada and Europe. As the article clarifies, “Americans are in worse shape than people in any other country when it comes to being able to afford the apartments and houses they rent.” In other words, it looks as though more Americans are putting themselves in danger of being unable to afford the payments that keep them in their rental homes.

“Unprecedented Surge” in Home Rentals Across the U.S.

The Harvard study got underway following news that there has been an “unprecedented surge in rental demand in the U.S.” over the last ten years. After the housing crash, the Chicago Tribune reports that eight million American homeowners lost their houses to foreclosure. As such, we should not be too surprised that the demand for rental units rose from about nine million to a whopping 43 million households. The article intimates that many of those new renters were forced into renting as a result of credit score declines due to foreclosure.

Homeownership in the U.S. is currently at its lowest rate since 1965. Currently, only about 62% of Americans are homeowners.

Contact a Foreclosure Defense Lawyer in Oak Park

While we discuss the declining number of homeowners, there are still residents of the Chicago area who are struggling to keep their homes. If you have questions about avoiding foreclosure, an experienced Oak Park foreclosure defense attorney can help. Contact the Emerson Law Firm today for more information.

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Report Shows Noticeable Decrease in “Zombie” Foreclosures

Do Chicago residents still need to worry about vacant homes in foreclosure blighting neighborhoods? According to a recent article in Marketwired.com, the total number of “zombie” foreclosures throughout the country has decreased by about 30% over the last year. That number is good news for homeowners who are concerned about vacant properties on their streets, and it is a particularly positive update for Chicago residents who are hoping the value of their properties will increase.

What else should you know about the dwindling rate of zombie foreclosures in Chicago? Does the salient decrease in vacant homes suggest that residents of Chicagoland no longer need to worry about the threat of foreclosure?

Fewer Zombie Foreclosures Across the Country

The article cites a recent report from RealtyTrac, which provides housing data for cities throughout the country. A couple of weeks ago, RealtyTrac released its “Q2 2016 U.S. Residential Property Vacancy and Zombie Foreclosure Report13,” which provided details about the total number of vacant zombie foreclosures in America. In short, many of these vacant properties remain in urban areas of the country. As of May 2016, almost 1.4 million properties remained vacant due. This number (1,398,046 to be exact) represents around “1.6% of all residential properties” in our country, according to the article.

How many of those vacant properties are empty because of foreclosure? In total, there are 19,187 vacant residential properties throughout the United States that are “actively in the foreclosure process.” In total, this number represents “4.7% of all residential properties in foreclosure.” While that might sound like a lot of homes, the good news is that the number is on the decline. It is down more than three percent from April 2016, and it is down by 30.1% from May 2015. The total number of vacant homes that are currently in foreclosure has dropped by more than 30% over the last year.

According to the article, the “strong seller’s market” has enabled lenders to sell more vacant homes and to lower the number of zombie foreclosures. As Daren Blomquist explained, “as these zombie foreclosures hit the market for sale they are providing a modicum of relief for the pressure cooker of escalating prices and deteriorating affordability that have defined the U.S. housing market in recent years.”

Higher Rate of Zombie Foreclosures in Illinois

Despite the fact that there are far fewer zombie foreclosures now than at this same time last year, Illinois still is ranked among the states with the highest number of vacant properties. According to the article, Illinois had the fourth-highest rate of vacant zombie foreclosures as of May 2016, with 1,074 listed in this category. When it comes to metropolitan areas with vacant zombie foreclosures, Chicago was ranked third-highest with 857 properties. The only cities with higher zombie foreclosure numbers were New York and Philadelphia.

The housing market is getting better, and Illinois neighborhoods are improving. However, foreclosure issues remain. If you have questions about avoiding foreclosure, and experienced Oak Park foreclosure defense lawyer can assist you. Contact the Emerson Law Firm today for more information.

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Update on Distressed Homes in Chicago

How are Chicago neighborhoods faring when it comes to housing recovery and distressed homes? It has been a number of years since the housing bubble burst, but distressed homes still line a number of streets. However, according to a recent article in Crain’s Chicago Business, the fact that distressed homes remain on the market is not necessarily a bad thing. The article suggests that these properties are an “improbable bright spot” in “Chicago’s lackluster residential real estate market.”

Finding Value in Distressed Properties

For individuals selling their homes, there is not a lot of opportunity in the Chicago market to make a profit right now. However, as the article notes, “banks and other firms selling foreclosed houses were far luckier.” The median sale price for distressed homes, including foreclosures and short sales, actually rose by 6.3% in 2015. To put that number in perspective, the median sale price increase for conventional home sales was only 0.4% last year. In other words, the price increase on distressed homes was 16 times better than the price increase on standard properties.

This gap between distressed and conventional property sales is not limited to lower socioeconomic brackets. The disparity in sale prices “shows up even in many more-affluent parts of Chicago and its suburbs where the real estate recovery came earlier and stronger than it has for the metropolitan market as a whole,” according to the article. On the Near North Side of Chicago, for instance, lender-mediated sales rose by about 6% by the end of 2015, compared with a 2.8% price increase for conventional properties. In Buffalo Grove, for example, lender-mediated sales climbed nearly 19%.

Need for an Improving Economy in Chicago

While it might seem as though high selling prices on distressed homes is a good thing, it may point to a sluggish Chicago economy. Chicago has seen relatively stagnant job growth and limited investment returns. The decline in conventional home sales may be evidence of the sluggish economy.

In terms of decreasing conventional home prices in Chicagoland, sales showed no growth at all in Evanston last year, and home prices dropped in Oak Park by 4.1%. In other words, the conventional real estate market does not look especially good outside out distressed home sales. But at the same time, the fact that more distressed homes are getting bought is a good thing, no matter what lens you view it through, according to the article.

According to Jonathan Smoke, the chief economist at Realtor.com, this trend is a common one toward the end of real estate recovery periods. While he remarks that Chicago remains behind in its recovery compared to many other urban areas in the U.S., the price gap that we are seeing between distressed and conventional properties simply makes clear that Illinois is “working through [its] foreclosure overhang.”

If you have questions about distressed properties or avoiding foreclosure, an experienced Oak Park foreclosure defense attorney can help. Contact the Emerson Law Firm today to learn more about how we can assist you.

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