After five consecutive months of increases, home prices in Chicago and across the nation fell in September from August, according to a Medill Reports story published on November 29, 2011. The S&P/Case-Shiller Index showed home prices in 20 major metropolitan areas up 0.1 percent from the quarter before, although Medill noted that home prices were down 3.9 percent from a year ago. A backlog of foreclosed properties and sustained high unemployment rates are partly to blame for home prices that Medill said are now “comparable to where they were almost nine years ago in the first quarter of 2003.”
“We’re bouncing along the bottom,” Gerd-Ulf Krueger, economist and founder of HousingEcon.com Inc., told Medill. “Consumers don’t see a reason to expect price increases.”
While Medill noted that “repercussions from the housing collapse include more people choosing to rent than buy,” the number of homeowners needing foreclosure help is also having an effect on the housing market. RealtyTrac reported that new foreclosures were up 7.36 percent in October to 230,678, but the number of foreclosed homes sold fell 25 percent to 75,243.
“The whole system is a self-contradictory mess,” Krueger told Medill. “The government and [lending] organizations are still fighting the war that they should have fought five years ago, which is to make it tougher to get financing.”
With the housing market not expected to stabilize until after 2012 and lenders making it difficult to take advantage of record-low interest rates, there will be many more homeowners considering Chapter 7 or Chapter 13 bankruptcy in the coming year. What more do you think can be done to help home prices in 2012?
Benjamin Brand Services – Chicago bankruptcy attorney