WSJ: Foreclosures Hitting the Chicago Area Hard
The Wall Street Journal looks at foreclosures bringing down prices across the nation on the front page today.
Most interestingly was where Chicago fell compared to the rest of the nation with the number of foreclosures.
Looks like the Chicagoland area is among the highest in the nation as a percentage of overall housing.
Wave of Foreclosures Drives Prices Lower, Lures Buyers [Wall Street Journal]
That was a pretty good article.
Could we really have more foreclosures, as a % of housing units, than the Los Angeles area?
I notice Miami-Dade is not on this list, which seems strange, because that place has 10 years worth of inventory.
The outlying suburbs skew the “Chicago” statistics. I am not saying that foreclosures are not increasing in the city proper as well, but it seems that there are more now in the collar counties.
There is no affordability problem in chicago, the wsj journal is plain wrong. Why, just today the msm reported prices and sales were up in the Chicago area. Anyone who thinks flippers and real-estate agents are suffering is just deluded. We should soon see a resumption of double-digit annual price appreciation as the Fed revives the amazingly flexible American economy.
I can’t tell if Sam is joking or not.
anyone who refers to “msm” (mainstream media) is being sarcastic. Like people who refer to SAD (std American diet.)
That’s what I was hoping, for his sake.
Miami-Dade has three years worth of inventory, I believe (but it will grow as all of those condo towers close.)
I think the difference is that they haven’t yet gone into foreclosure there. Apparently, the Chicago metro area has one of the highest foreclosure rates as a percentage of the overall listings (if you believe the chart above.)
And yes- that includes the area out to Joliet (as per the chart.) But the other metro areas don’t just include the cities either. The Detroit foreclosure rate isn’t just Detroit but the suburbs out to Dearborn.
If you look at the foreclosure listings frequently you can see the devastation in the city on the South Side. Thousands of homes in foreclosure, some as low as $15,000.
The numbers aren’t as great on the North Side, but there is stress in areas like West Bucktown and Logan Square now.
The chart only shows that the banks and flippers in Chicago are in the most pain compared to flippers in any other metro region (and by a long shot).
It doesn’t count principal home/condo owners. Throw those into the mix and places like Ohio and Michigan take the lead. The silver lining for them is their houses never appreciated much to begin with, so places like California and Florida are in the some really bad pain for some.
I wouldn’t be owning small or mid-size banking stocks or thrifts in my portfolio these days. The FDIC has been beefing up their bank failure staff quietly the past half year awaiting the coming storm.
This WSJ article does show that for those of us on the real estate sidelines, theres going to be some good deals in certain areas. Think “pre-2003” prices.
Sabrina, what Miami actually has is a 10-year supply of condos.
They possibly have only a three-year supply of houses. It’s the condo development that went really berserk.
At market peak, 2005, about 5700 condos sold.
As of November, 2007, there were over 25,000 condo units on the market, with 25,000 more coming on line in coming months.
I was down there very recently, and it is surreal. 4 immense buildings fronting Biscayne Bay, 300-660 units each, and only about 20 lights on between all 4 buildings at 8pm on a weeknight. The 4th bldg was under construction, and it was the very building at which the crane collapsed today.
Bank United “blacklisted” 191 Miami condo buildings for further financing. They will not write any loans for any of these mostly luxury buildings, and Wachovia will not write loans for anything in South Florida.
Now, someone here in Chicago told me that Lincoln Park has a 7-year supply of upper-bracket (over $2MM)homes on the market. Can you verify that? It doesn’t seem like there are so many houses on the market there, but then, there are not so many people who can afford $2-4 million clams for a house.
The amazing thing is that these things were all in the planning stages as of 2002-2003? Did these developers not avail themselves of demographic studies that could tell them about how many buyers there were in a given income bracket, and that maybe they were building more $700 sq ft condos and $3.5MM houses than their markets could absorb.
Looks like the Chicagoland area is among the highest in the nation as a percentage of overall housing.
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I would like to know the square mileage of the “Chicagoland area”. There are vast swaths of land that uninhabitable for the average RE consumer.
If you look at the foreclosure listings frequently you can see the devastation in the city on the South Side. Thousands of homes in foreclosure, some as low as $15,000.
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If you dig into the numbers on the southside, I have seen pricing for those now $15,000 were $150,000 in ’05-’06.
Stuckinthecity: It’s not talking about square miles in the chart. It’s talking about the number of foreclosures as a percentage of the housing market (the number of homes.) So the Chicagoland area scores high because of the sheer volume.
LA is a bigger metro area- but the foreclosures aren’t anywhere close to approaching what we are seeing here in Chicago- mainly because housing has been more in demand in California than Illinois for many years (until lately.) California foreclosure rates have been historically low the last few years as housing mania took over. People were able to sell long before their houses ever went into foreclosure. Not so in Illinois.
Laura: I can’t find the stat right now, but Chicago Magazine and Crain’s have both talked about the amount of inventory at the upper end.
I never heard it was 7 years in LP though. In mid-2006, there was a 20 month supply of homes over $1 million. I’m sure it’s more now (as that was two years ago.) If it was seven years, prices would be coming down sharply.
Laura is pretty much right on the mark with Miami. I’m renting in Sunny Isles Beach (North Miami Beach)….right on the beach and cheaper and bigger than Chicago….should work out well (no worries) and will study the market at my leisure or the next 6-12 months to see where I’ll want to buy eventually….. It is a renter’s market…… there are thousands of $1M+ units that have been built and are still being built to complete some of these projects…..sooo many condos, sooo few interested in buying now……and sooo many desperate owners and developers …. another multi-building developer was just rumored to have gone bellyup today….
Here are some mls stats for detached single family homes for Lincoln Park (area 8007, defined by Diversey, North Ave, river and lakefront.)
Active Listings are as of this morning.
6 month sales were closed 9/26/07 through 3/25/08.
3 month sales were closed 12/26/07 through 3/25/08.
Price Listings 6 mo. Supply 3 mo. Supply
I don’t know if the table will work this time, but here goes.
Price Listings 6 mo. Supply 3 mo. Supply
OK, last try. Sorry if it runs together, but is there any way to post tables here?
Price Active 6 mo. Supply 3 mo. Supply
G, how about just summarizing what it said? 😉
Here are some mls stats for detached single family homes for Lincoln Park (area 8007, defined by Diversey, North Ave, river and lakefront.)
Active Listings are as of this morning.
6 month sales were closed 9/26/07 through 3/25/08.
3 month sales were closed 12/26/07 through 3/25/08.
That was too much typing not to work again.
Summary: price segments range from approx 15 to 25 mo. supply.
Sabrina, not arguing with you. Just voicing my dislike for the ol’ Chicago-Naperville-Joliet thingie. Somewhere in the middle of that huge triangle is a median priced house of $240,000. However, in the hoods I’m looking I cannot find a decent 3bd SFR for under $400,000 that I don’t have to spend 100g’s on updates and there won’t be any gang graffiti on my garage in the morning.