Home prices are now holding up against Chicago foreclosures in certain neighborhoods. After three years of continued slide in house prices, a number of Chicago neighborhoods have been showing surges in prices.
These recovering neighborhoods, according to local analysts, are the areas that were hit immediately when the foreclosure crisis started. As they suffered first, distressed properties in these neighborhoods were resold first, giving more time for these communities to recover.
In 2009, the prices of single-family homes in 56 out of 253 zip codes in the Chicago metro area increased, the first time in 5 years that house prices rose in the Chicago area. In other Chicago areas, the decline in home prices slowed significantly, indicating that the price impact of foreclosures is now weakening.
The rate of price decline has fallen to only 2.8 percent in 2009, far below the sharp 16.3-percent decline rate in 2008. In zip code 60614, home prices dropped by only 2.5 percent.
While Chicago foreclosures continued to pull down home prices in areas like South Side and Cicero by a total of more than 60 percent since 2006, foreclosure activity pulled down prices only slightly in areas like Gold Coast and Upton, allowing prices to drop only by 11 to 15.3 percent.
On the other hand, local realtors are baffled because of the spike in home prices in areas where there are plenty of bank owned properties foreclosures like Austin and suburban Harvey. Prices in Austin surged by more than 20 percent while prices in Harvey spiked by more than 28 percent.
Some analysts explained the price spike in foreclosure-battered neighborhoods as a result of deep price declines in 2008, which naturally result in higher rates of increase when they did rise.
In a foreclosure study that considered lists of properties by state, Illinois ranked tenth in March based on rate of foreclosure. A total of 14,199 foreclosure filings were posted during the month, including 7,012 delinquency notices and 2,763 foreclosure sale notices.
Of the total filings, 4,424 housing units or 31.16 percent were bought back by banks in March. In the entire first quarter, a total of 45, 780 housing units in Illinois were put into the foreclosure process.
While Chicago foreclosures are contributing to the continued price drops in several suburban areas such as Yorkville, Waukegan, Zion and Round Lake, certain Chicago areas, such as Lincoln Square, Irving Park, Oak Park and Avondale, are showing price improvements.
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