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Foreclosure and Housing

Market Trends in Chicago andNorth Lawndale

Geoff Smith

Woodstock Institute

Lawndale Alliance

Community Awareness Town Hall Meeting

May 19, 2009

WOODSTOCK INSTITUTE

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Quarterly Changes in Chicago Area Foreclosure Starts, 2003 to 2008 4Q

Source: Woodstock Institute analysis ofdata from Foreclosure ReportofChicago

Foreclosure Trends inthe Chicago Region

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

1Q-03 2Q-03 3Q-03 4Q-04 1Q-04 2Q-04 3Q-04 4Q-04 1Q-05 2Q-05 3Q-05 4Q-05 1Q-06 2Q-06 3Q-06 4Q-06 1Q-07 2Q-07 3Q-07 4Q-07 1Q-08 2Q-08 3Q-08 4Q-08

Properties with Foreclosure Starts

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2008 Foreclosures in Chicago

City ofChicago 100.5percent increasebetween 2006 and 2008

OHare 646.2%

West Ridge 383.6%

Albany Park 3 2.3%

Dunning 3 9.8%

Portage Park 33 .3%

North Lawndale 89.3%

City ofChicago 20,592singlefamily properties

with foreclosurefilings Austin 1,017

Chicago Lawn 744

West Englewood 719

BelmontCragin 687

Humboldt Park 666

North Lawndale - 405Source: Woodstock Institute analysis ofdata from Foreclosure ReportofChicago

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2008 Foreclosures in Chicago

City ofChicago - 36.2singlefamily foreclosuresper1,000 mortgageableproperties

Top Five

Washington Park 181.1

GrandBoulevard 14 .8

Woodlawn 12 .6

EastGarfield Park 88.6

Englewood 82.8

North Lawndale 74.8

Bottom Five

ArmourSquare 3.5

Lincoln Park 5.7

Edison Park 8.4

ForestGlen 10.1

Hegewisch 10.2

Source: Woodstock Institute analysis ofdata from Foreclosure ReportofChicago

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2008 Foreclosures in Chicago ImpactonRental Marketsand Condo Owners

Foreclosures Impact Rental

Market Tenant evictions

Supply and Demand

Small Multi-Unit Buildings

32% ofForeclosures inChicago in 2008

Community Areas Impacted WestGarfield Park 86.6%

North Lawndale 79.5%

LowerWest Side 79.3%

EastGarfield Park 78.0%

New City 70.3%

Condoforeclosuresrising Impact owners

Community

Community Areas Impacted

Rogers Park

West Ridge

Grand Boulevard Woodlawn Source: Woodstock Institute analysis ofdata from Foreclosure ReportofChicago

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Source: Woodstock Institute analysis ofdata from Foreclosure ReportofChicago

Increasing FlowofREO Properties Into Market

Foreclosure Auctionsby Volumeand Outcome Type, 2005to 2008

,8

5,

2,8

22,

,

,

5

8

0

5

0

5,000

0,000

5,000

20,000

25,000

2005 200

200

2008

REO Third Party

ales

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Source: Woodstock Institute analysis ofdata from Foreclosure ReportofChicago

Disproportionate ImpactonCommunitiesofColor

REO Auctions Comparedto Mortgageable Propertiesby Neighborhood Minority Level, 2007

7

27

2

2

2

0

7

2

0

00

0

0

0

0

20 0

2 0

0 0

0

00

0 P e rc e n to r r eat er A fric a n A m e ric a n

0 P e rc e n to r r eat er La tin o

0 P e rce n to r r eat er M ixe d M in o rity

20

P e rce n tM in o rity

0 P e rce n tM in o rity

L e ss th a n 0 P e rce n tM in o rity

ha re R e g io n a l P r oper tie s ha re R e g io n a l R EO s

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Source: Woodstock Institute analysis ofdata from Foreclosure ReportofChicago and Cook County RecorderofDeeds

What Happensto REOs Post SherriffSale?

TimeofMarketforREO Foreclosures in Portage Park byQuarter, 2005to 2008 1H

0

10

20

30

40

50

60

20051Q 2005 2Q 20061Q 2006 2Q 20071Q 2007 2Q 2008 1Q

Time Period

Dayson Market1 120 Dayson Market121 365

Dayson Market 365+ Dayson Market Not Sold

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Source: Woodstock Institute analysis ofdata from Foreclosure ReportofChicago and Cook County RecorderofDeeds

What Happensto REOs Post SherriffSale?

TimeofMarketforREO Foreclosures in Englewoodby Half, 2005to 2008 1H

0

10

20

30

40

50

60

70

80

20051Q 2005 2Q 20061Q 2006 2Q 20071Q 2007 2Q 2008 1Q

Time Period

Dayson Market1 120 Dayson Market121 365

Dayson Market 365+ Not Sold

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Changes in Mortgage LendingActivity, 2006to 2007

Overall Change in Home Purchaselending 31.0% decline

Neighborhood Income Level

Low Income: 31.9% decline

Moderate Income: 36% decline

Middle Income: 34.1% decline

Upper Income: 25.5% decline

Neighborhood MinorityComposition

80%+ Minority: 42% decline

Lessthan10%: 27.3% decline

Borrower Income Level

LMI: 32.3% decline

MUI: 28.5% decline

Borrower Race/Ethnicity

African American: 37.5% decline

Latino: 45.3% decline

White: 25.6% decline

Source: Home Mortgage Disclosure Act

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Local Real Estate Market Trendsand Outlook

Sales Price Trends Chicago MSA 25.1percentdeclinesincepeak in September2006

Case SchillerComposite 20 30.4 percentdeclineofoversameperiod

Decline Sharpest in Lowest Cost Housing

Valuelessthan $190k 29.3 percentdecline

Valuegreaterthan $297k 24 percentdecline

Condovaluessomewhatstable

13 Percentdeclinefrompeak

Lag?

Morerestrictivelendingmarket

Federal Reserve SeniorLoan OfficerSurvey

Decliningmarketspolicy

Condolending costsandrestrictions

Implicationsforneighborhoodrecovery NSP

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Foreclosure and Housing

Market Trends in Chicago

Geoff Smith, Vice President

Woodstock Institute

29 E. Madison, Suite 1710

Chicago, IL 60602

www.woodstockinst.org

WOODSTOCK INSTITUTE