Slide 1 - Institute for Comprehensive Community Development

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Slide 1 - Institute for Comprehensive Community Development
Neighborhoods and Housing
Markets Regional Discussion
January 23, 2012
Robin Newberger
Community Development and Policy Studies Department
Federal Reserve Bank of Chicago
Housing Market Issues
Issues/Challenges

High rates of foreclosure
◦ Rising starts and falling
transitions


Falling home values
Negative equity/drop in
home financing
◦ Affordability


Rising REO and vacancy
rates
High unemployment
Potential Solutions
Loan modifications
Temporary financial
support to homeowners
 Expansion of affordable
rentals


◦ Including from REO
inventory

Land Banks

Improvement of labor
market
High Rates of Foreclosure
Illinois Foreclosures
County Foreclosure
Inventory
12
8.00
10
7.42
7.00
8
6.00
6
5.00
4
4.33
4.00
2
3.00
1992q1
1993q1
1994q1
1995q1
1996q1
1997q1
1998q1
1999q1
2000q1
2001q1
2002q1
2003q1
2004q1
2005q1
2006q1
2007q1
2008q1
2009q1
2010q1
2011q1
0
Seriously Delinquent (IL %)
2.00
1.00
1.98
0.87
0.00
Past Due 90 Days (IL %)
Source: MBA and LPS
McHenry
Dekalb
Kendall
Dupage
Will
Cook
Kane
Grundy
Lake
Estimated Foreclosure Start and Transition
Rates
20.00
0.80
18.00
25.00
0.50
0.45
0.70
20.00
16.00
0.40
0.60
0.35
14.00
0.50
12.00
10.00
15.00
0.30
0.25
0.40
10.00
8.00
0.20
0.30
0.15
6.00
0.20
5.00
0.10
4.00
0.05
0.10
2.00
0.00
0.00
0.00
0.00
Cook Transition
Cook Start
Dupage Transition
Dupage Start
Foreclosure Inventory Rates
2006
2011
Falling Home Values
Chicago MSA Housing Price
Index (1995 = 100)
250
Little
Village
-60.7
Cicero
-61.4
Mount Prospect -33.5
Cragin
-54.9
Waukegan
-45.7
Joliet
-31.3
200
150
100
50
1992q1
1993q2
1994q3
1995q4
1997q1
1998q2
1999q3
2000q4
2002q1
2003q2
2004q3
2005q4
2007q1
2008q2
2009q3
2010q4
0
Source: OFHEO
Woodlawn -50.4
West
Rogers
Park
-50.2
Humboldt
Park
-46.3
Des Plaines -43.4
Bolingbrook
-31.3
Country
Club Hills
-42.9
St Charles
-27.5
Crete
-38.5
Lake forest
-27.3
Englewood -46.0
Garfield
Ridge
-40.3
Logan
Square
-34.1
Schaumburg -37.9
Wheaton
-21.8
Woodstock -37.6
Naperville
-18.1
Aurora
-35.9
Bridgeport -29.9
Lincoln
Park
-6.6
Fox Lake
-35.8
Algonquin
-35.1
Negative Equity
% Single Family Homes with Mortgages in Negative Equity
(Chicago MSA)
50
45
40
35
30
25
20
2009q1
2009q2
Source: Zillow
2009q3
2009q4
2010q1
2010q2
2010q3
2010q4
2011q1
2011q2
2011q3
Home Mortgage Lending
Home Purchase
Refinancing
Percent Change in Mortgage
Lending (2006-2010)
Source: HMDA
Limited Numbers of Modifications
HAMP Modifications Chicago CMSA
60000
50000
40000
30000
20000
10000
0
Permanent Modifications
Active Trials
Real Estate Owned (REOs)
(percent of all current and non-current loans)
1.80
1.60
1.40
1.20
Dupage
1.00
0.80
0.60
0.40
0.20
0.00
Source: LPS
Kane
DeKalb
Will
Kendall
Lake
Cook
Neighborhood Vacancy Rates
Source: Census 2010
Unemployment and Foreclosures
Source: IDES LAUS
Regional and Local Comparison








Rising foreclosure rates across all counties
Falling transition rates
Falling home values
Limited number of modifications
Some communities more economically frail
than others
Extent of “underwater” varies with drop in
values
Home financing more available in some
places
Impact of unemployment on housing market
Housing Market Issues
Issues/Challenges

High rates of
foreclosure
◦ Rising starts and falling
transitions
Falling home values
Negative equity/drop in
home financing
 Rising REO and vacancy
rates



High unemployment
Potential Solutions
Loan modifications
Temporary financial
support to homeowners
 Expansion of affordable
rentals


◦ Including from REO
inventory

Land Banks

Improvement of labor
market
Thank you

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