Chicago lags in U.S. housing recovery
A group of row houses are under construction in Chicago, Ill. The latest figures on the U.S. housing market show a turnaround is taking hold. But Chicago is a stubborn outlier on the road to recovery.
No Chicagoan likes to hear the words "Second City." But when it comes to real estate, Chicago has been vying to keep up with the rest of the country for years.
According to Dennis Rodkin, who writes the Deal Estate column for Chicago Magazine, Chicago's No. 1 problem is foreclosures -- and how long they can take under Illinois law.
"What people refer to as the foreclosure free ride -- the time between when you stop paying for your house and when you might be kicked out of your house -- can be over three years at this point," he says.
Illinois is not the only state where foreclosures get caught up in court, but Chicago is also dealing with its notorious winters.
"A lot of these houses have sat through one if not two or three winters," Rodkin says. "They may have water damage from burst pipes, they may have mold, so its more expensive to convert these low cost foreclosures."
Chicago is an aberration, says David Blitzer, the managing director and chairman of the group that publishes the Case-Shiller figures. He says Chicago wasn't hit as hard as one-industry towns like Detroit, nor did it have as far to fall like in places where the real estate industry saw an incredible run-up in the housing boom, places like Phoenix, Las Vegas or Miami.
Chicago is more like New York or Boston, an older city with a heavy dependence on the finance sector. But being in the Midwest, Chicago lacks the regional economic backbone of those cities. So it's recovering at a slower, more-Midwestern pace.