We Toured The Hardest-Hit neighbourhood In The Weakest Housing Market In The Country

ashburn chicago housing market

Photo: Rob Wile/Business Insider

Some believe the housing market is recovering.But we should really be talking about housing markets.

While some cities are booming, other cities are showing signs of weakening.

According to Case-Shiller, the city with the worst 2012 has been Chicago.

Yesterday we learned the city has now seen at least two consecutive monthly declines.

Chicago’s October foreclosure rate increased 3.6 per cent from September and 18.6 per cent from the same period one year ago, according to the Chicago Tribune’s Mary-Ellen Podmolik.

What’s going on here?

We took a tour of Ashburn, a working-class neighbourhood on the city’s southwest side, to get a ground-level view of what’s happening. 

Ashburn boasts the city’s highest foreclosure rate — 1 in 137 units is seeing bank action, according to RealtyTrac.

That’s higher than parts of Southern California.

If you want to see the best case for why housing has not recovered, read on.

Ashburn is on the southwest side of the city. It was the site of the city's first-ever airport.

The largest private employer in the area is Kraft, which now runs this Nabisco baked goods factory.

When you get to Ashburn you don't see a Sunbelt-style ghost town, but rather a lower-middle-class enclave trying to hold on.

But many aren't making it.

There was about one house per block on average with a for-sale sign...

...Or holding an open house.

But being for sale is different than being foreclosed on, and you can't always spot a latter example from the street. This was an exception.

It was one of the more heartbreaking ones we saw. The family left in a hurry.

Source: Homesteps

Source: Homepath

To be sure, some distressed homes were more obvious.

If it's possible, this is not as bad as it looks — Ashburn's crime rate is about average for the city. This is has as much to do with weather as crime.

The 8000 block of South Maplewood Ave had the most consecutive for-sale signs. Besides the one in the background, there's also one right behind where we took this photo.

This guy.

We went back and looked at how much the 3br unit in the foreground was going for. Answer: $177K.

Source: Redfin.com

That's evidently a flip price — you can see it's experienced an insane listing history since 2010, when it was sold for just $47.5K.

Source: Redfin.com

Obviously, it's not alone in seeing that kind of activity.

Source: Redfin.com

So why is Ashburn so down compared to other neighborhoods? It's not entirely clear...

But one reason may be that the neighbourhood's residents are disproportionately employed in the public sector.

And the city has cut more than 5,800 jobs in the past five years.

Source: Chicago Reader

It's easier to explain why Chicago at large is still so down. First: apartments similar to this one (in Ashburn) were converted into condos...

...and then purchased by people who couldn't afford them.

Illinois also has a lengthy foreclosure process...

Source: Marketplace.org

...That can be prolonged if a home is damaged by Chicago's brutal winters (hence the windows on the earlier houses.)

Source: Marketplace.org

It can take up to three years for a foreclosed home to come back on the market.

Source: Marketplace.org

So is there any hope for Ashburn? Some — here's the brand new, $81 million Sarah E. Goode STEM Academy. It welcomed its first class this fall.

Finally, some Chicago establishments are pretty much apocalypse-proof.

Chicago's not the only market still recovering...

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.