First let me say that most areas in the Chicagoland appreciated 150% from 1997 to 2005. The banks loosened the lending rules with all kinds of creative mortgages then. Many people were given "interest only" loans which kept their payments artificially low until the 5 year balloon came due. Many people were given adjustable loans based on "stated income". Which meant little income was verified. This is part of what got us in this mess. Well due to the last of the crazy loans that were given out five years ago, that are now coming due - I think it will be another two to three years to clean the slate. Many of those loans will go into foreclosure or will attempt a short sale. Banks that have already foreclosed on homes are waiting an average 8 months before they put them on the market. The banks can't over saturate the market with their own below market properties, or they'll loss even more on them. Many people are victims of unemployment and could not avoid foreclosure. Far too many owners were denied loan modifications and the banks put them in foreclosure. The bail out money wasn't used to keep many owners in their homes. Once that inventory is gone, values will level off. On a more upbeat note I want to mention that only 9% of the mortgages in our nation are now pass due. Yes 91% of homeowners are current on our mortgages. I am seeing buyers coming out this last year. Buyers have bought homes at low prices they would have never gotten just a few years ago. Some sellers are renting their properties and still buying to take advantage of the low prices. If you don't owe more than your home is worth, get off the fence and upgrade your home while interest rates are still low.
Have a Happy Thanksgiving. Stay safe.
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