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Housing Bubble

April 3, 2008

The financial “innovations” that helped produce the bubble-and-crash in the US housing market, which in turn helped fuel the larger financial and economic crash of 2008, was the widespread, aggressive, and predatory marketing of adjustable-rate-mortgages,  cheap money refinancing schemes,  no equity loans, and basically the greed of  money lenders  that induced too many home-buyers into unwise and eventually disastrous gambles.

It looks like the Illinois real estate market is still going through a period of fluctuation marked by rising foreclosure rates along with an up tick in housing sales, according to reports released this week.

A report by housing industry company RealtyTrac Inc. indicated that 18,870 properties in Illinois received a foreclosure filing in April 2010, the fourth-highest figure among all states.

The state experienced a hike of more than 38 percent in foreclosure activity this April as compared to April 2009, while overall nationwide foreclosure activity dropped by 2.4 percent.

Illinois avoided the brunt of initial foreclosures that was caused in large part by speculative loans and markets, according to Daren Blomquist, spokesman for RealtyTrac.

“What we’re calling a second wave of foreclosures is being caused now by underlying economic issues, namely unemployment, higher unemployment, which is driving more foreclosures in states like Illinois,” Blomquist said.

One of out every 280 properties in Illinois received a foreclosure filing this April, as compared to one out of every 387 properties in the United States.

Blomquist said because Illinois was about a year behind the initial foreclosure wave, he expected the state’s rising rate of foreclosures to begin to hit a plateau next year.

But the state’s housing market may be in line for a turnaround, according to statistics compiled by the Illinois Association of Realtors.

A recent IAR report indicated that home sales in Illinois totaled 21,242 in the first quarter of 2010, a 23.5 percent increase from the same time period last year. Hopefully this is only the beginning of good things to come.


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