I’ve decided that we won’t see the large increase in pandemic induced foreclosure activity that so many were worried about. ATTOM Data Solutions released their January foreclosure market report last week. There’s no point in even discussing how much higher foreclosure activity is this year compared to last year since last year was artificially suppressed by the government’s foreclosure moratorium. Rick Sharga, executive vice president of RealtyTrac, even said:
It’s very important to keep these numbers in context. Foreclosure completions are still far below normal levels – less than half as many as in January of 2020 before the pandemic was declared, and about 60% lower than the number of foreclosure completions in 2019. We’re likely to continue seeing large year-over-year percentage increases for the rest of this year, but it’s also likely that foreclosure activity will remain below historically normal levels until the end of 2022.
So, basically, foreclosure activity is at historically low levels. You can see that in the graph of Chicago’s foreclosure activity below which appears to have picked up about where it would have ended up had you simply extended the trendline from before the pandemic.
Chicago Foreclosure Activity

After a dramatic plunge following the pandemic foreclosure moratorium Chicago foreclosure activity has just now begun to resurge now that the moratorium has ended.

And it’s not like the foreclosure moratorium was just holding back the dam either. Check out the latest national delinquency rate from Black Knight’s December Mortgage Monitor Report. Although the delinquency rate spiked during the pandemic it has since basically returned to pre-pandemic norms – not to mention that everyone’s home is worth more money now so people can sell their homes for more than they paid for them instead of going into foreclosure.
Mortgage delinquency rate

The nation’s mortgage delinquency rate continues to improve and seems to have recovered from the pandemic

Chicago Shadow Inventory

In addition, the number of homes that are in some stage of foreclosure isn’t really moving much in the last few months. I just checked it and it is only up by about 66 units since last month, so it’s not going anywhere. If anything, it’s surprising that it’s not declining, given that more homes are supposedly reaching the final stages of foreclosure than homes going into foreclosure at the front end (see the graph above).
Chicago homes in foreclosure

The number of homes in foreclosure in Chicago declined with the moratorium during the pandemic and doesn’t seem to be rising since.

#Foreclosures #ChicagoForeclosures #Coronavirus Gary Lucido is the President of Lucid Realty, the Chicago area’s full service real estate brokerage that offers home buyer rebates and discount commissions. If you want to keep up to date on the Chicago real estate market or get an insider’s view of the seamy underbelly of the real estate industry you can Subscribe to Getting Real by Email using the form below. Please be sure to verify your email address when you receive the verification notice.
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