Investors Monitoring Chicago’s Bank Foreclosure Listings

by on cities

The real estate market in Chicago, Illinois has generated an increase interest from vulture investors. Industry experts said that most of these vulture investors are real estate developers whose overbuilding activity was cited as one of the factors that pulled down the housing market and the economy.

Real estate developers set aside their development plans and started scouring Bank Foreclosure Listings to find repossessed properties to purchase at discounted prices. Industry experts believe that by temporarily stopping development works, real estate developers are ensuring that they will survive the crisis until such time that the construction activity picks up again.

Belgravia Group Ltd. Chief Executive Officer Alan Lev said that his company still has plans for new construction projects. However, as long as the number of properties on Bank Foreclosure Listings continues to increase, it is hard to think of building new structures, Lev added.

The Belgravia Group is planning to purchase distressed properties worth $100 million.

Many industry observers believe that more properties will be placed on Bank Foreclosure Listings this year as owners who failed to refinance their debt will be forced to place on the market for sale their residential or office projects.

Industry experts predict that about $814 billion multifamily and commercial mortgages nationwide will mature from 2009 to 2011, with $24.3 billion loans in Illinois.

These expert predictions are driving real estate developers in Chicago to raise money, not to fund new construction projects, but to purchase foreclosed properties at discounted prices.

Prices of apartment properties in Chicago sold between October 2008 and March 2009 dropped by 15 percent to $101,215 from the same period a year ago.

However, industry experts cautioned investors on the possibility that the flood of mortgage defaults would be contained once credit starts flowing. This would mean a substantial reduction in the supply of distressed properties to buy. Added to that is the competition to win profitable deals.

Major real estate investors and developers, including Walton Street Capital LLC and John Buck Co., are searching the Bank Foreclosure Listings to purchase distressed commercial mortgage loans or busted projects.

Indeed, real estate investors/developers are expecting a bumpy road ahead in the foreclosure buying market. But they see no other way to survive in the current housing crisis.