Market Conditions: Chicago Fourth Quarter Foreclosure Filings up 10.2%
The Chicago Tribune reports that foreclosures continued to rise in Chicago and the metro Chicago area in the fourth quarter of 2009.
Data is from the Woodstock Institute:
Woodstock found that for Chicago, initial foreclosure filings increased by 10.2 percent, but the activity varied widely by neighborhood. Some of the largest percentage gains last year were in Lincoln Park, up 103 percent; Near South Side, up 46 percent; and Near North Side, up 37 percent.
At the same time, some of the communities hardest hit by the first waves of the foreclosure crisis — neighborhoods such as Austin, Hyde Park, Auburn Gresham and Englewood — reported fewer foreclosure filings last year than in 2008.
“In ’06, ’07 and early ’08, the main driver was badly written loans,” Smith said. “As those loans cycle out of the system through the foreclosure process, the economy hasn’t improved, you see that [unemployment] is maybe more of a factor.”
Don’t forget, an “increase” in the foreclosure rate in a certain neighborhood could mean it went from 3 in 2008 to 6 in 2009.
Chicago foreclosures soar in 4th quarter [Chicago Tribune, Mary Ellen Podmolik, Feb 4, 2010]
I wonder if someone if going to come on and say that the worst is now behind us, so now is the time to buy or you will be priced out forever.
I think the main driver for foreclosures was also a lack of income to service the debt due to the decline in white collar incomes and increased unemployment, especially among those owners in the neighborhoods mentioned (LP, Near North, Near South).
It’s more than just lack of income due to decline in white collar incomes, its the high debt to income ratios that existed pre-bust, and now that incomes have declined, it has exasperated the problems.
“’I’m Stanley Johnson. I’ve got a great family. I’ve got a four bedroom house in a great community. Like my car? It’s new! I even belong to the local golf club. How do I do it? I’m in debt up to my eyeballs. I can barely pay my finance charges.’”
http://www.youtube.com/watch?v=hn5EP9StlVA
I had completely forgotton about that commercial; always found it hilarious.
Great. More forclsoures that the banks can sit on for at least 1 year apiece then sell without taking a loss.
“it has exasperated the problems”
Heehee.
“I wonder if someone if going to come on and say that the worst is now behind us, so now is the time to buy or you will be priced out forever. ”
Many will along the way to the bottom. You won’t be able to spot who is exactly right while it is happening. But one thing I think you can bet on is we’re further to the top than the bottom these days.
Real household income declines for most income tranches over the past 15 years combined with easy credit bubble led to an asset bubble in RE vals. HELOCs and other financial shenanigans only allowed consumer spending to further outpace its real level. Eventually something has to give in this kind of economy.
You can only really goose the “lower financial standards” or “throw government subsidies at it” plans so much before they pull enough demand forward even they lose effectiveness. Coming to a Sears near you: cash for clunkers appliances edition. LMFAO!