This is the 7th and FINAL article in a series I have written about the real estate market on Chicago's North Shore. I have been using the concept of "shadow inventory" to understand how much longer home prices will be declining in each community on the North Shore. Shadow inventory refers to homes that are in pre-foreclosure (the owners are 3 months or more behind on their payments) and homes that have already gone through the foreclosure process and are bank-owned. Some of these homes may already be available for sale, but most of them are not. When they do hit the market, it will be at discounted prices (as short sales or bank-owned properties) because of their distressed status. When these types of properties are for sale, this causes prices of other properties in the area to decline. So the fact that these properties are potentially going to hit the market in the coming months is NOT A GOOD THING.
Skokie
Shadow inventory increased by almost 20% over the past 6 months to 589 properties in Skokie. Almost 27% of these are bank-owned properties. There are 430 households that are behind in their mortgage payments in Skokie – that represents 30% of the pre-foreclosures on the whole North Shore! Skokie seems to be hit hardest of all the communities on the North Shore with distressed properties.
|
Skokie - 12 months ending 7.26.2011 |
Bank-owned properties Sold |
Short Sales |
Total distressed property sales |
|
Total |
126 |
74 |
200 |
|
% single family homes |
59% |
61% |
60% |
|
% condos/townhomes |
41% |
39% |
40% |
Skokie leads all of the other North Shore communities with 200 distressed property sales during the past 12 months. These sales are just under 34% of the size of the current shadow inventory. If these trends continue in Skokie it will definitely be the last suburb on the North Shore to see an end to falling prices.
Wilmette
Wilmette saw shadow inventory increase by 24% to 92 properties. About 76% of these are in pre-foreclosure, and the rest are bank-owned.
|
Wilmette - 12 months ending 7.26.2011 |
Bank-owned properties Sold |
Short Sales |
Total distressed property sales |
|
Total |
12 |
10 |
22 |
|
% single family homes |
75% |
80% |
77% |
|
% condos/townhomes |
25% |
20% |
23% |
On top of the increase in the shadow inventory, only 22 distressed properties were sold in the past 12 months. This is only 24% of the size of the shadow inventory. This means that it will take some time for Wilmette to recover from falling prices because the number of distressed properties in the “pipeline” is increasing and sales of distressed properties is relatively low in comparison.
Winnetka
Winnetka had a total of 6 bank owner properties and 14 homes in pre-foreclosure as of July 26, 2011, for a total shadow inventory of 20 homes. This is a decrease from 39 homes in January 2011, a good sign of recovery.
|
Winnetka - 12 months ending 7.26.2011 |
Bank-owned properties Sold |
Short Sales |
Total distressed property sales |
|
Total |
6 |
8 |
14 |
|
% single family homes |
100% |
88% |
93% |
|
% condos/townhomes |
0% |
12% |
7% |
There were 14 distressed properties sold during the past 12 months in Winnetka, which is 70% of the size of the current shadow inventory. The declining shadow inventory AND the relatively strong sales of distressed properties indicate that this community is close to turning the corner on pricing!!
Thank you for reading!!!
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nsk
Nancy S. Karp
@properties | Consultant, MBA, ePro, SFR, CREN |
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