foreclosures on condos are multiplying faster than those on
single-family homes, real-estate experts suggest that foreclosures,
boosted by pervasive job cuts in the sagging economy, may soon
aggressively climb the socioeconomic ladder.
“It’s going to move from the blue-collar [homeowner] to middle
management and higher,” says Menash Zadik, the managing broker of
Rising Realty. Each week, his company sends out a list of Chicago-area
foreclosed homes available for sale. “We’re starting to see them in
what used to be nonforeclosure areas: Glenview, Highland Park, Skokie,”
The numbers are still small: last week’s list of almost 600
foreclosed properties had two each in Glenview and Highland Park and
four in Skokie. But Zadik anticipates larger numbers in more affluent
suburbs as job cuts take their toll on the middle class. “You will see
more white-collar people who were able to keep going for a few months
after [losing a job], but finally have to let go of the house,” he
At the Woodstock Institute, a policy organization that has been
aggressively tracking foreclosures locally, Geoff Smith says the impact
of job losses and the generally moribund economy is a real concern.
“They might be [responsible for] high levels of foreclosures in 2009,”
he says. “In 2007 and 2008, you saw a lot of foreclosures tied to
unsustainable loans, and those were concentrated in lower-income areas.
You are going to see more foreclosures that are tied to the economy
than to toxic loans.”
And job losses, Smith points out, are not confined to lower-income
areas. “With job loss, you won’t have as big a safety net as you had in
the past,” he says. “The expected time of looking for a new job now is
nine months to a year. Do your unemployment benefits cover your debt
service that long?”
These foreclosure increases, if they do occur, will be on top of
2008’s already frighteningly high number of foreclosures—up 52 percent
from 2007. In 2008, according to the Woodstock Institute, 57,927
residential properties in the six-county area had a foreclosure filing;
in 2007, there were 38,215.
Last week, Smith’s group reported that foreclosures on condos in
the city had spiked even more sharply than single-family home
foreclosures. They shot up by 139 percent in Chicago in 2008, compared
to a 37.6 percent increase on houses. Condos still make up just 19
percent of the total foreclosures, but the sharp upward growth in their
numbers is worrisome. “[Condo foreclosures] were concentrated in
neighborhoods where there had been a lot of [condo] conversions in the
past few years,” Smith says. The neighborhoods with high concentrations
of condo foreclosures in 2008 included Rogers Park, where 80.5 percent
of the year’s 287 foreclosures were condos; Uptown (88.2 percent of 127
foreclosures) West Ridge (68.2 percent of 525 foreclosures), and
Lincoln Square (66.9 percent of 151 foreclosures).
But Smith says there is hope that a potential upward climb of
foreclosures might be mitigated by two things: the effectiveness of the
foreclosure intervention programs that banks have rolled out, and
possible aid to homeowners in the second half of the federal stimulus
package. But only time will reveal the effectiveness of those remedies.
“As the economy worsens,” says Smith, “you’re going to see there are
lots of [foreclosed homeowners] who didn’t have bad loans, just a bad
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