Distressed sales up sharply in Chicago over 4 years ago

Four years ago in January, 3% of all closed sales in Chicago were lender-owned foreclosures and 1% were short sales.

A short sale, as many of you know, is a sale where the market value of the property is less than the mortgage amount. This type of sale requires lender approval. Short sales and lender-owned foreclosures are often referred to together as “distressed” sales.

The number of distressed sales has risen sharply over the past 4 years. In January of this year, short sales accounted for 15% of closed transactions in Chicago, and lender-owned foreclosures accounted for 28%.

While distressed sales were rising to 43% of all Chicago closings, the overall number of closed sales was falling, contributing to downward price pressure on homes listed for sale.

We are seeing inventory levels – the number of homes listed for sale – increasing lately, along with an increase in buyer activity. We will not, however, see home price appreciation until we settle back to a more “normal” level of distressed property.

Jody Wise is affiliated with Prudential Rubloff. Visit her profile or her website for more information.

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