Foreclosures hitting high-end Chicago communities

Some buyers might have the opportunity of moving into some of the most upscale Chicago homes, given that many are now vacant due to foreclosure.

The latest foreclosure report from the Woodstock Institute shows that Chicago neighborhoods known for their trendiness have not been immune from foreclosure. Some of the neighborhoods that had the highest increases in foreclosure filings over the past year were the famous Loop district, which saw filings increase 76.7 percent, and the Near South Side, where filings were up 70.1 percent. Additionally, the Near West Side saw foreclosures rise 63.7 percent from the third quarter of last year. As a whole, foreclosures in Chicago rose 14 percent.

Moving to an upscale home in one of the neighborhoods used to be a sign of affluence, but even buyers there are running into issues where paying the mortgage is becoming difficult. Many buyers in condominium complexes found themselves underwater, owing more on their mortgage than what their property was worth, and had to sell their condo via short sales, reported the Chicago Tribune.

"This is an emerging issue in the city and it's something to keep track of. [Foreclosures] are hitting more affluent people and some investors," said Geoff Smith, senior vice president of the institute.

The issue might lead to more wealthy residents moving on from their mortgage via strategic defaulting - intentionally walking away from the debt. CoreLogic reported that the financial move was more prevalent among wealthy homebuyers because they were better able to absorb the loss.
 

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