Surge in Chicago area foreclosures

People looking at homes for sale in Chicago might find more deals at foreclosure auctions. Channel 3000 recently cited an industry report indicating that while foreclosures have fallen in 62 percent of U.S. cities, Chicago has conversely seen an increase of 34 percent in foreclosure activity.

The report studied 212 of the nation's largest markets, analyzing foreclosure activity in the third quarter of 2012, which ended September 30. The report also found that 58 percent of major metro markets studied showed foreclosure activity dropping below September 2007 levels. However, the foreclosure scene in the Chicago housing market is bucking the national trend. Chicago saw a 34 percent increase in foreclosure activity in the third quarter when compared with the third quarter of 2011. Chicago was noted to have the ninth highest foreclosure rate of the 212 major metros studied.

The Chicagoist reported that a surge of foreclosure activity experienced in Chicago in August put the city on the top of the industry organization's list for foreclosure filings, which was the first time Chicago topped the list in roughly seven years of monthly reports. Between July 1 and September 30, one out of every 98 housing units in the Chicago-Naperville-Joliet area received a foreclosure filing.

"There is a lag in filings because Illinois is one of 26 states with a judicial foreclosure system, in which lenders must go to court to seize property," Chris Bentley states in the Chicagoist. "Cook County foreclosure rates are typically above the state's average and far above the national average, a fact all too familiar to those in neighborhoods plagued by vacant properties."

Housing markets compared with last election
A recent article in the Chicago Tribune revealed that when comparing the state of the housing sector today with its state at the time of the previous election, most housing markets are worse off. The Tribune cited the same industry study, noting that 65 percent of local markets are in a lesser position than they were in fall 2008.

While this report shares relatively negative news for the Chicago housing market, the good news is that high foreclosure activity typically provides a wealth of bargain finds for people in the market for homes, as homes are put up for auction. An increase in foreclosure auctions could additionally attract significant investment and help spur the local market recovery moving forward.

There are Chicago neighborhoods and suburbs that are experiencing positive market signs. A recent article in the Naperville Sun revealed that realtors in this Chicago suburb are reporting homes selling at a quicker rate and in higher volume.