Home foreclosure filings rose 30 percent in the Chicago area last year, a sign that the region's mountain of distressed residential property isn't going away anytime soon.
The area ranked ninth in foreclosure activity in 2012 among 212 metropolitan areas tracked by RealtyTrac Inc. The region had 125,598 filings, or one for every 30 housing units, the most activity among Midwestern cities.
Though local home sales have picked up, foreclosures remain a concern, threatening to depress prices and delay the recovery in many Chicago neighborhoods and suburbs. Yet the faster lenders act to clean up the mess from the housing bubble, the sooner foreclosure-burdened areas can rebound.
“Markets with increasing foreclosure activity in 2012 took the first step in finally purging delayed distress left over from the bursting housing bubble,” Daren Blomquist, vice president at Irvine-based RealtyTrac, said in a statement. “Meanwhile, the underlying fundamentals in many of those markets are slowly improving, making it an opportune time to absorb additional foreclosure inventory this year — and that is particularly good news for buyers and investors hungry for more inventory to purchase in those markets.”
The Chicago area ranks the ninth-best place to buy foreclosed homes based on a RealtyTrac formula that takes into account factors such as the supply of foreclosed properties and price discount paid for them. The Palm Bay-Titusville-Melbourne, Fla. area ranked first, followed by places including New York, Jacksonville, Fla., and Orlando, Fla.
The Chicago area's large number of homes that have been repossessed by lenders or face foreclosure have attracted vulture investors aiming to buy up the properties, rent them out and eventually sell them at a profit. Buyers include the Cogsville Group LLC, based in New York, and Oakland, Calif.-based Waypoint Homes.
The Chicago area has the most homes that are lender-owned or facing foreclosure on an absolute basis, more than 120,000. But it has a three-year supply of foreclosed homes when adjusted for sales volume, trailing places like New York (about eight years) and Philadelphia (three-and-a-half ), according to RealtyTrac.
Sales of foreclosed properties in the Chicago area accounted for 30 percent of total residential sales last year. On average, foreclosed properties here sold at a 46 percent discount to non-foreclosed ones.
Stockton, Calif., had the most foreclosure activity last year (one filing per 25 housing units). Other metro areas that ranked higher than Chicago included Miami (one in 27) and Atlanta (one in 29). Nationally, there was one foreclosure filing for every 72 units.
Read more: http://www.chicagorealestatedaily.com/article/20130130/CRED0701/130139962/chicago-area-foreclosure-activity-jumps-in-2012#ixzz2JZVu8jNh
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