Frim Woodstock: Foreclosures are Up and Rising

Woodstock found that for Chicago, initial foreclosure filings increased by 10.2 percent, but the activity varied widely by neighborhood. Some of the largest percentage gains last year were in Lincoln Park, up 103 percent; Near South Side, up 46 percent; and Near North Side, up 37 percent.

At the same time, some of the communities hardest hit by the first waves of the foreclosure crisis — neighborhoods such as Austin, Hyde Park, Auburn Gresham and Englewood — reported fewer foreclosure filings last year than in 2008.

“In ‘06, ‘07 and early ‘08, the main driver was badly written loans,” Smith said. “As those loans cycle out of the system through the foreclosure process, the economy hasn’t improved, you see that [unemployment] is maybe more of a factor.”

Here is another Great Buy

From the MLS

The home has just been reactivated in the MLS listings. It is a 5 bedroom, 5 bathroom, on a 130x400 lot size, taxes are $12,273.00, built in 1988 and has been rehabbed. This is a bank owned property. The starting list price was $3,600.000. The new list price is $1,295,000. That shows how the banks are trying to move property off of the books.
The house is in Hinsdale South High School district,swimming pool, marble, the house is in great condition. We will watch this.

Walking from Homes is the new thing

Today I read in New York Times that more people are walking away from the homes . This is a very sad fact. The homeowners are walking if they see the value of their home has dropped by 75%. Who would stay knowing that the home has little value, and they can not make any money from it. Again I wonder what is going to make a first time buyer want to buy. If the government bail out is not working now then why stay in the home. I know of a friend's son who bought in Florida, has been transfered up north and the condo is valued 78% less. Should he walk?

What is a Hardship in a Short Sale

A hardship is a change in your life style that has created a new status for you. It is a reason that the bank will allow you to short sale your home. Examples are: divorce, lost of income, change of job, health, and injury. The list is long and the important thing to do is to make sure the bank is aware of your change. It can be done with an application from your banker. So my advise is to keep the communication open with your mortgage lender.

New Release today on New Homes from Crains

(Crain’s) — Local new-home sales inched higher in the fourth quarter, but homebuilders will remain stuck in their slump until the economy recovers.

Chicago-area builders sold 584 homes in the fourth quarter, up 3.9% from 562 in the year-earlier period, according to a recent report by Tracy Cross & Associates Inc. It was a positive end to an otherwise awful year for local developers, who sold just 3,753 units in 2009, down 41.0% from the year earlier and 88.7% from the market’s peak in 2005.

Though a federal tax credit and low interest rates have propped up the market, high unemployment and a tight lending market have depressed demand, which isn’t likely to bounce back anytime soon.

“We see normalcy in the Chicago market probably being established in 2013,” says Tracy Cross, president of the Schaumburg-based consulting firm. Normalcy, he says, “will more or less look like ’93 to ’98 or ’99,” not the boom of the last decade.

Sales in the city fell 12.5% in the fourth quarter, to 21 units, while suburban sales rose 4.6%, to 563 units. For the year, city builders sold 848 homes, a 42.7% decline from 2008, and suburban sales totaled 2,905, a 40.5% drop.

New-home sales will rise about 10% this year, “but that is off such a low base that it is meaningless,” Mr. Cross says. Many sales “will result from reselling of distressed properties that are bank-owned.”

This is our Market 2010.

From the Illinois Association of Realtors:

In the city of Chicago, December total home sales (single-family and condominiums) were up 39.8 percent to 1,768 sales compared to 1,265 homes sold in December 2008. The city of Chicago median price in December 2009 was $210,000 down 10.6 percent compared to $235,000 a year ago in December 2008.

For the full year, sales were down in Chicago compared to 2008. Median price slid 22.4%.

For the year, city of Chicago home sales were down 7.4 percent to 19,401 homes sold compared to 20,946 homes sold in 2008. The year-end city of Chicago median price for 2009 was $225,000, down 22.4 percent from $290,000 in 2008.

“In the city of Chicago, December closed with nearly a 40 percent increase in units sold over the same period in 2009, indicating that the correction of the marketplace continues as distressed properties are absorbed by investors, and stimulus credit homebuyers continue to pave their way to making their purchases,” said REALTOR® Genie Birch, president of the Chicago Association of REALTORS® and a broker associate with Koenig & Strey GMAC, Chicago.

“We will continue to monitor closely the impact of the first-time homebuyer tax credit, as well as the evolving lending regulations, including FHA’s new guidelines, as we serve Chicago’s homebuyers in 2010.”

Statewide, sales also improved but there are concerns about the elevated unemployment rate which reached 11.1% in December, much higher than the national average.

“The continuation of positive changes in annual sales data recorded in the last three months of 2009 is forecast to continue through the first quarter of 2010 and there is evidence to suggest that median prices might be starting to inch upwards,” said Dr. Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory (REAL) of the University of Illinois. “Illinois’ March 2010 median price is forecast to be just above the level recorded a year earlier but Chicago’s median price will be down by just under 8 percent.”

Adds Hewings: “Illinois has recorded 24 months of job declines since the recession began in December 2007. Nationally, four in 10 of those currently unemployed have been in this position for more than 27 weeks.”

Illinois Home Sales in December Log Fourth Consecutive Gain; Year-End Home Sales Down 1.5 Percent in 2009 [Illinois Association of Realtors, Press Release, Jan 25, 2010]

The Bubble is building

From Matt Taibbi's "The Great American Bubble Machine" in Rolling Stone Issue 1082-83.

Fast-forward to today. It's early June in Washington, D.C. Barack Obama, a popular young politician whose leading private campaign donor was an investment bank called Goldman Sachs — its employees paid some $981,000 to his campaign — sits in the White House. Having seamlessly navigated the political minefield of the bailout era, Goldman is once again back to its old business, scouting out loopholes in a new government-created market with the aid of a new set of alumni occupying key government jobs.

Gone are Hank Paulson and Neel Kashkari; in their place are Treasury chief of staff Mark Patterson and CFTC chief Gary Gensler, both former Goldmanites. (Gensler was the firm's co-head of finance.) And instead of credit derivatives or oil futures or mortgage-backed CDOs, the new game in town, the next bubble, is in carbon credits — a booming trillion- dollar market that barely even exists yet, but will if the Democratic Party that it gave $4,452,585 to in the last election manages to push into existence a groundbreaking new commodities bubble, disguised as an "environmental plan," called cap-and-trade. The new carbon-credit market is a virtual repeat of the commodities-market casino that's been kind to Goldman, except it has one delicious new wrinkle: If the plan goes forward as expected, the rise in prices will be government-mandated. Goldman won't even have to rig the game. It will be rigged in advance.