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Chicago sees a burst of foreclosure activity in the auctions
May 24th, 2013 12:16 PM

April was one the busiest months Cook County has seen in Foreclosure activity since August of 2010.  A whopping 3000 residential units came through the auctions just last month.  When compared to the 1500 in March and the 1800 from a year ago, that tells us one thing.  There is STILL a lot inventory out there.

Of course not all properties scheduled to go to a foreclosure auction actually make it all the way the through, but this surge of activity is movement in the right direction to stabilize Chicago’s real estate market.

"For Illinois as a whole, we've now seen seven straight months where (foreclosure starts) are down from a year ago.  That's a good sign.  There's fewer properties being added,” said Daren Blomquist, a RealtyTrac vice president.  

The foreclosure process reached a high of 30 months from the start to the auction date last month.  That’s a two and a half year process. 

Judicial Sales is only one of four corporations that handles foreclosures in Cook County and currently handling the larger portion of residential foreclosures.   Just last Thursday, only 50 properties came up for auction, while 75 cases that were originally scheduled for that day, were either cancelled, rescheduled, or sold prior to the auction.

Peter Birnbaum, president and CEO of Attorneys' Title Guaranty Fund Inc., also the parent company of Judicial Sales, said, "We're still really busy.  The backlog, between the robo-signing and the settlement and all the lenders calling a time out, that created a backlog of old cases."

On average, only 6 out every 50 residential units that come to auction are bought by an investor that out bids the lender.  The remaining units are bought back by the lender as a bank owned property, also known as an REO, and typically placed into a package of properties to be sold in bulk.

If you aren’t shocked yet by these numbers, here are a few more stats.   Chicago ranks #4 out of the top 10 markets in the country for foreclosure activity.  That’s not all; approximately 35% of all current Illinois homeowners are more than 25% underwater.  These are just foreclosures awaiting the inevitable.  Realistically, only a small percentage of these underwater homeowners will avoid foreclosure though a short sale or loan modification. 

"As many areas of the real estate market have shown signs of recovery, the interest in bidding at foreclosure auctions has jumped substantially.  The auctions are becoming a standing-room only event where bidding is very active and fierce, compared to even 6 months ago," said Benjamin De Los Monteros of Cherry Picker Investments, an auction buyer firm.

To sum that all up, foreclosures aren’t going anywhere quickly.  Chicago still has a lot of inventory to get through. 

Posted in:General
Posted by Michael Hobbs on May 24th, 2013 12:16 PMPost a Comment

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