Chicagoland Foreclosure Activity Soars in the 1st Quarter of 2012

Published On 2012-05-07
Chicagoland Foreclosure Activity Soars in the 1st Quarter of 2012

This year, month after month, the foreclosures in Chicago area have been steadily rising each month throughout the six counties of Cook, Will, Kane, Lake, McHenry, and DuPage. The total home foreclosures in January for the combined counties were 5,138. In February, the total number jumped to 6168 - almost a 20% increase from January. In March, the number of foreclosures increased even higher to 6,442 - a 5% increase from February. Overall, there was about a 25% increase from January to March of 2012.

Although nationwide existing home sales are shown to be declining, March 2012 has shown the highest home sales in five years. Home sales are on the rise statewide according to March 2012 data. March 2012 has marked the highest statewide sale of homes in March since 2007. The total number of existing home sales, including single family homes and condominiums, reached 7,904 in March 2011. In March 2012, home sales state wide increased over 17% with a total of 9,575 homes sold. Specifically in the six Chicagoland counties, McHenry and Kane have seen a March 2012 surge in home sales as well. In March 2011, 26 homes were sold in McHenry county. This number jumped to 44 home sales in March 2012. This is nearly a 40% increase over the course of one year. In Kane County, 61 homes were sold in March 2011. There was also a large increase in sales in 2012 when 110 homes were sold. This is over a 45% increase.

It is well known that Chicago is one of the hardest hit cities from the current foreclosure crisis. Because of this, Chicago is among the first metropolitan cities to participate in a new federally funded program to decrease the negative impact of foreclosures. The Federal Housing Finance Agency is currently participating in a new program aimed toward turning government-owned foreclosed homes, held by Fannie Mae, into rental properties. Under the terms of this program, prequalified investors are able to apply to buy large groups of foreclosed Fannie Mae homes; they must agree to rent the homes out for a specified number of years. The first phase of this program is beginning with 99 properties with 120 units in the Chicagoland area. The aim of this program is to remove foreclosed properties from the market.

Several reasons have been speculated as to why this March surge occurred. Some correlate the increase in sales with low mortgage interest rates. Others correlate the increase with competitive pricing and motivated sellers. Foreclosure sales nationwide are sold for an average of 19% below market price.