- Posted August 19, 2013 by
Falling Foreclosures Good For Illinois New Construction Homes
New foreclosure filings in the greater Chicago area drastically dropped in the first six months of 2013, falling 36.1 percent to 22,342. Fewer competing short sale and foreclosure properties on the market help builders of Illinois new construction homes get back to business.
The latest falling numbers brings new foreclosure filings to their lowest level since the real estate crash. While distressed properties are still working through the system, at this rate, the number of Chicago area foreclosed properties will continue to drop substantially which will continue to support the real estate recovery for Illinois new construction homes and resale properties.
Foreclosures filings dropped in 76 of Chicago’s 77 areas and is now back to levels not seen since 2007. Although fewer new foreclosures are being reported, outstanding foreclosures are proceeding through the system more quickly which is putting a little damper on neighboring property values. Even so, fewer foreclosures will eventually lead to recovering property values and better days ahead for Illinois home builders.
In order for the Chicago area real estate market to really propel back to a stable recovery we need to get through the backlog of foreclosed properties. Foreclosure auctions are still mainstream only falling six percent in the first half of 2013. Some markets are seeing excess numbers of foreclosure auctions such as Harvey, South Elgin and Roseland. While it’s a challenge today, it’s a process that has to happen to bring the local real estate market back to stability. Appraisers in these difficult markets must continue to weigh the complications of area foreclosures when valuing Illinois new construction homes as well as non-distressed resale properties.
Another thin silver lining is the fact that the percentage of foreclosed properties seized by banks fell nearly four percent in the first half of 2013. This is likely the result of more homeowners pulling themselves out of negative equity situations or now being able to save their home from foreclosure thanks possibly to new employment or a mortgage refinance.
Some of the more affluent Chicagoland areas, such as Barrington, are fortunate not to feel much impact of foreclosures on their local real estate values. Less than one percent of the 135 home sales last month in Barrington were the result of a foreclosure or short sale. This is drastically reduced from the same time last year when Barrington saw foreclosures and short sales make up almost 29 percent of sales in just one month.
Naysayers point to less than stellar job growth, rising interest rates and slow-to-improve home equity as reasons to be down and out about the real estate market. On the flip side, optimists, including builders of Illinois new construction homes, point to increasing sales, increasing median home prices and increased demand as reasons to finally believe the real estate market is on the rebound.
This blog post was brought to you by the team at Henning Estates in Huntley. Henning Estates is a Huntley ranch home community offering elegant ranch homes in a picturesque setting.