Signs of Revival from Foreclosure in Chicago
May 29th, 2009
Chicago is at last showing signs of revival from foreclosure crisis. A Chicago-based real estate agent says he is grateful that the worst is at last over. After a long drought, it is pouring, says agent Mark Zipperer. There’s the sweet smell of increasing home sales in the air.
In Illinois, the sale of homes and condos registered an increase and what’s more interesting the median price of a home has risen since June.
The counties that witnessed the increase in sales were Lake County, 65 percent; Cook County, 38 percent, and Kendall County, 51 percent. In Cook County itself 2,409 properties were sold. When you compare the figure to March 2008, it is less than what was sold in March 2008 — 3432 homes yet the developers are happy. But agents are keeping their excitement under wraps. What they are happy about is that they are at least heading towards the right direction.
There are quite a few factors that have given the market a boost. Home prices have become more realistic, thanks to $8,000 non-repayable federal tax credit that first time buyers are getting for homes taken before 1st December. Besides consumers are also getting interest on 30-year mortgages.
There’s a general feeling of optimism that is propelling the consumers towards better times. After all, life must go on. Real estate agents have been able to sell homes that are priced right. And the sales drive is being engineered by first-time buyers. In fact, this category makes up for 53 per cent of transactions conducted in March.
The price tag of a home is now dependant on whether it is a traditional sale or a distress property sale. In the latter, the owner tries to avoid foreclosure by selling for an amount that is less than what he owes to the lender. The lender has to approve this and the process is time-consuming.
In Chicago, 62 per cent of homes sold were distress sale. The price difference between a traditional sale and a distress sale is also glaring. While a conventionally sold house fetches a price of $287,750, a distressed property sale fetches $50,000. Real estate dealers also say that buyers often show a preference for foreclosed property unless its condition is really deploring.
Properties that are for distress sale are driving prices. In the first half, one in 106 Chicago homes received a notice of foreclosure — an increase of 69 per cent over the first half of 2008.
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