IN CHICAGO Foreclosures Taking Longer to Sell – Nobody Wins!
IN CHICAGO Foreclosures Taking Longer to Sell – Nobody Wins!
ONE-THIRD OF CHICAGO SINGLE-FAMILY FORECLOSURES LEFT UNSOLD END OF 2008!
Our Team sees Foreclosed Homes and Short-Sale Pre-Foreclosures in many Chicago Neighborhoods.
In modest-priced neighborhoods like Portage Park Jefferson Park Albany Park and Dunning some 1920’s-era Chicago Bungalows are fetching in some cases prices as much as 40% less than what the sold to their current owners only two or three years ago. Many are boarded-up reminders in otherwise tranquil neighborhoods that we are still in the midst of a housing downturn here.
Down in the more tony neighborhoods of Chicago – The Gold Coast River North The South Loop even Lincoln Park – condo prices have fallen by 1/3 or more over the past 12-18 months. The windows of these condo units are not boarded up of course – but often times assessments are unpaid the units sit vacant and market time continues to increment higher each day.
Here in Chicago the problem of bank-owned foreclosures is most acute in the most economically-depressed neighborhoods many of these predominantly African-American in make up. During the First Quarter 2009 according to a story by reporter Mary Ellen Podmolik in The Chicago Tribune 2099 single-family properties across the city became bank-owned foreclosures. Roughly 50% of these were in neighborhoods where the population was at least 80% African-American.
Some properties in the most depressed neighborhoods sit unsold for a year and a half often longer according to a study by The Woodstock Institute.
One middle-class ethnically-diverse neighborhood greatly impacted is Chicago Lawn on the Southwest Side of Chicago. On certain blocks in this community more than half of the buildings are boarded up lawns overtaken by weeds yards strewn with garbage with seemingly no likelihood for a quick sale..
According to Woodstock Institute data the median number of days for a foreclosed property in the Chicago Lawn Neighborhood was 274 days – and that was back two years ago. Likely that number is higher today. In 2005 the average Market Time for Bank Foreclosed properties in the neighborhood was still high but not quite so high – 180 days!
Most foreclosure sales in the neighborhood go to investors who often leave the property unimproved unrepaired and neglected waiting for the next growth spurt in the real estate market to come.
To help deal with the foreclosure problem locally a Southwest Side Community Group the Southwest Organizing Project is working with lenders who own the REO Foreclosed Properties including mega-lender Bank of America to forge an agreement to better upkeep the foreclosed properties they own. This initiative has barely made a dent in the problem however.
Last year more than 1800 residential foreclosures were initiated in the 60629 Zip Code of Chicago – the area that includes the troubled Chicago Lawn Neighborhood. Often it takes more than one year to complete a foreclosure. During this time current owners often leave or fail to maintain the property properly as their level of despair grows.
The federal Making Home Affordable Loan Modification Program was geared to adjust mortgage payments so their owners can avoid foreclosure. But to date only 12% of borrowers eligible for more-affordable loan modification work-outs have begun them.
And still day by day new foreclosures funnel into the system in the Chicago Lawn Neighborhood and elsewhere. Last week giant Mortgage Loan Investor and Guarantor Freddie Mac announced that mortgage defaults hit a record-high 3.13% of its loan portfolio in August. This number is expected to climb as more of the exotic interest-only and pay-option ARM loans reset to higher interest rates in the coming months.
DEAN MOSS & DEAN’S TEAM CHICAGO
