Foreclosures Soar in Chicago Area
biz.yahoo.com
The soaring rate of foreclosures is quickly transforming what has long been a seller's market into a buyer's market.
"During the refinancing boom, people found themselves qualified for homes they might not have qualified for if the interest rates were higher," explains Jeff Metcalf, founder and CEO of Record Information Services Inc. (RIS), a suburban Chicago-based company specializing in marketing data collection. "Any movement up in the mortgage rates, particularly for those who used adjustable rate mortgages, is going to affect a lot of people."
Based on first-quarter figures, Metcalf believes the foreclosure rate for 2006 in the metropolitan area will increase by as much as 25%. The rate will be much higher in the fastest-growing collar counties.
"It's going to be more severe (than in 2005)," he says. "After so many years of good economic growth in the housing industry, the real estate market is slowing down."
Using projections based on first-quarter foreclosures, RIS sees a grim situation for financially-pressed homeowners, but plenty of opportunities for investors in troubled properties.
In Will County, for example, RIS is predicting foreclosures rates will rise 51% over 2005, when more than 1,900 homes were lost to foreclosure proceedings. In the first quarter alone, foreclosures in Will County totaled 957 homes.
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