Distressed sales home prices fall in Chicago
Chicago and Illinois are at the top of the list for foreclosure activity and numerous recent reports continue to speculate on the condition of the market for real estate in Chicago. The Chicago Tribune recently cited a CoreLogic study which indicates that distressed home sales continued to weigh the market down in August, causing Chicago home prices to decline by 2.5 percent when compared with last year.
The CoreLogic study indicated that home prices declined by 1.7 percent over July, and the state of Illinois experienced a 2.3 percent decline. Overall, the state of Illinois was listed among the top five states with the greatest depreciation, along with Rhode Island (down 2.6 percent), New Jersey (-1.4 percent), Alabama (-0.7 percent) and Connecticut (0.5 percent).
This news come simultaneously with positive reports from the most recent Case-Shiller Home Price Index. The index was delayed two months, with the most recent report covering the month of July, which may account for its different findings from the most recent CoreLogic report. The Case-Shiller Index showed prices for single family homes in Chicago to have bounced back 13.5 percent in July from its low in March.
In a recent phone interview with WBEZ, Chicago real estate expert Matt Silver said, "The foreclosures and the short-sales have a major impact on our market."
Silver indicated that in today's market, buyers are being a little more cautious about the properties they choose to buy.
Jeff Lowe, a Chicago-based real estate expert, told WBEZ in a phone interview, "Foreclosures need to be dealt with. But I think generally speaking, people are optimistic that they can buy a house today and in two years it will be worth similar to what it's worth today."
Another recent article from the Chicago Tribune indicated that the foreclosure activity in Chicago has been drawing investors. The news source reported on October 3 that the most recent investor is a New York-based private equity firm, who paid $2.1 million for an equity interest in 94 foreclosed properties. The properties were sold from Fannie Mae and stretch from the Wisconsin border down to the South Side neighborhood of Chicago.
This recent large purchase is indication that the large inventory of distressed homes is drawing significant interest. While the foreclosed homes have been weighing down the local home values, their sale is expected to kick-start recovery in the Chicago housing market.