Sue Fox, @Properties. Direct 773.816.1788

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Foreclosures spike again in Chicago

filed under: Buyers, Edgewater, Foreclosures, Market conditions posted on November 3rd, 2012


FORLORN, AND FINALLY FORECLOSED: This 3-bedroom 1997 Edgewater home bounced on and off the market for five years, starting at a price of $689,000. Located at the corner of Thorndale and Ravenswood (right across from the Metra tracks), it failed to find a buyer and by late 2010 was being offered as a bank-approved short sale for $525,000. Still no takers. After being foreclosed upon by the bank, it sold a month ago for $385,000 -- a relative bargain for this neighborhood.

After falling amid an outcry over improper bank behavior, foreclosures are once again rising sharply in Chicago and Illinois as a whole.

Last week, RealtyTrac reported that foreclosure activity in the Chicago region jumped 34% from the third quarter of 2011. Notices of default, the first step in a foreclosure action, were filed against nearly 19,000 local homes.

Chicago, which has been one of the hardest-hit cities nationally in terms of foreclosures, is now doing much worse than the rest of the country — where foreclosure activity dropped 16% in the last year. Foreclosures are now at their lowest level nationwide in more than five years, according to RealtyTrac. In Illinois, however, foreclosures shot up 31% over last year.

The real estate website Zillow just started displaying information on homes that are in foreclosure but not yet for sale, and it showed 11,000 such condos and single-family houses in city of Chicago alone. Many of them are clustered in ravaged neighborhoods on the South side, but the distressed properties extend into even the city’s priciest zip codes as homeowners struggle to hold onto homes whose value has fallen about 30% in recent years.

According to RealtyTrac, it takes about two years on average for a lender to foreclose on a Chicago home, so a troubled address listed on Zillow could be a long way from being offered for sale. Still, look for increasing waves of foreclosures to hit the local market in 2013, a trend that could help hold down prices.

Written by Sue Fox //

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