Wednesday, April 26, 2006

New Home Sales Report Show Increase

Sales are up and prices are stabilizing. Good sign for home buyers, and, even sellers. Buying a home should be based on a few factors...

First, buy on the principle of paying yourself first. You have to live somewhere, so why not spend the money on yourself and not a landlord.

Secondly, try to find a location you really can live with... if this means going smaller, then do it. Chances are someone else will really want that location down the line when you sell. Being a pioneer in a new neighborhood just to get more space is not for everyone.

And third, the tax benefits and social value. A home lowers your tax exposure, ultimately lowering the cost of ownership... that's tangible. And ownership FEELS different. It really changes the way you live and decisions you make. It's great for the neighborhood and your growth as a person.

So don't base ownership on national media reports about the housing market. Just take a good look at your position in life and you'll decide that ownership may be the next positive step.

However, good national news is helpful!

New home sales soar March gain of 13.8% the biggest in 13 years, showing surprising strength in housing market, but that was partly driven by builders cutting prices.
By Chris Isidore, senior writer
April 26, 2006: 2:06 PM EDT
NEW YORK ( - New home sales posted the biggest jump in 13 years in March, but sales got a boost as builders cut prices to cope with higher mortgage rates and a growing backlog of houses on the market.
The government reported new homes sold at an annual rate of 1.21 million homes in March, up 13.8 percent from a revised 1.07 million pace in February. That easily topped forecasts for a 1.1 million pace from economists surveyed by
The jump, the biggest since a 16 percent rise in April 1993, came even as mortgage rates hit an average 6.32 percent last month for 30-year fixed-rate loans, according to Freddie Mac, up from 6.25 percent in February.
The mortgage rate was the second-highest for any month since 2002. Rates have risen further since, climbing to 6.53 percent in the most recent weekly survey.
With rising mortgage rates driving up the cost of financing home purchases, most economists have been looking for the real estate market to cool off in 2006 after several years of record sales.
But economist Bob Brusca said last month's drop in new home prices is a sign that the market for new homes isn't nearly as strong as the jump in sales would suggest.
He noted that the report showed an unusual drop in prices from both February and a year earlier, which could be a sign that home builders are cutting prices to move a large supply of new homes now on the market.
"New homes sales sprang back to life like a zombie in a cheap horror flick," Brusca said. "And like that zombie, housing really is dead. Don't let all that twitching fool you."
He said that many of the new homes sold in March were probably built in a stronger real estate market.
And unlike existing homes, where sellers can live until they get an acceptable price, "builders can't live in these houses unless they have a lot of family," he said. "By and large they must finance them at rising interest costs."
In fact, about one builder in five has reported a jump in cancellations of new home orders, according to a recent industry survey. And Wednesday's report showed that there were 553,000 new homes for sale in March, up 25 percent from a year earlier.
Meanwhile, average prices fell 7.1 percent from February to $279,100, after topping $300,000 for the first time in the February revised figures. The median price, which reflects the point at which half the homes sell for more and half sell for less, also fell 6.5 percent to $224,200.
And while month-to-month declines in home prices are not unusual, more significantly, prices also fell from a year earlier: a 2.2 percent decline in median prices and a 3.6 percent fall in average prices over that time.
Still, Wednesday's big jump in sales came after existing home sales also showed an unexpected increase last month in a report from the National Association of Realtors Tuesday.
New home sales, while a fraction of the overall real estate market, are more closely watched since they're more of a leading indicator of conditions in the housing market.
Existing home sales are recorded at closing, typically a month or two after a purchase agreement, while new home sales are tracked based on when contracts are signed.

Sunday, April 23, 2006

City living in the face of gas hikes

You will never hear me complain about the cost of a gallon of gas. Surprising considering I'm a Realtor who basically lives out of his car. Okay, maybe I'll complain about the cost of the actual gallon of gasoline, but not oil prices. Let me explain.

Crude oil prices are subject to a free market. Crude oil is a very special market commodity affected by the widest range of global issues, trends, and conflict. It is also a market commodity that, effectively, can and will change the daily course of our lives. The countries that produce oil will enter into agreements with the countries that want it. Then... we buy it.

Gasoline in the states is also highly taxed... not as high as Europe... so the cost is highly subjective to governments. Something very worthy of complaining about if you feel tax money is being squandered.

So when gas prices go up I feel it as much as anyone (due both to my dependence on my car and my indignation towards the use of tax money), but complain less. This is because I live in Chicago and have a choice to drive less. Even as a Realtor, I can take public transportation on certain days when I predominately work in the office.

Because of the centralization of jobs and industry downtown, a nice little condo by public transportation is a much more valuable commodity than oil. So I don't complain... because the higher gas prices get, the more it makes sense to live near work and take public transportation. And the Chicago housing market thrives.

Remember, the market can change the cost of goods and services on a dime. The location you choose to live will help you weather those fluctuations and dampen their effects.

Sunday, April 16, 2006

Location and Transportation Vs Size = No Brainer

Size doesn’t matter… at lease not with Chicago condos. Let me explain.

I’m currently working with a very cool couple from Michigan. They are first time buyers this spring, but have rented in the city for two years. They have a pretty big place now-and pay a hefty rent. So, finding themselves established in Chicago, buying makes sense for them considering what they shell out each month for a vintage rental.

However, home shopping has been a little bit of a shock. To meet their transportation, social and price needs they found the available condos a bit small. How would they fit all of their stuff? Would they feel cramped? Could they possibly have their first kid here or there?

Ahhh… the constant conundrum for many of my “suburban young couple turned urban professional” clients.

In these cases I usually suggest we could be in Tokyo or New York City. If that doesn’t do it, I move on to the many values that make living in Chicago great and the need for smaller dwellings necessary. It is a real gut check for young people who have grown up in sizable homes.

I first remind clients how great it is to walk a couple blocks to the Red Line or Brown Line and zip to work. You don’t even have to remember where your car is (if you have one). Secondly, how great is it to walk to the lake, the coffee shop, even the grocery store. This is truly a lifestyle thing… a gift the City gives us. For instance, it is a fact that urban populations are thinner and healthier than their cohorts in the suburbs.

Third, finding a great little condo with majestic mature trees on the block, a terrific outdoor space, and modern amenities will trump giving some landlord all your money for a large vintage dump. A small space is also a chance for a new beginning, free of clutter and unnecessary possessions. Besides, the reason to be in the city is to develop your career, try new things, enjoy the culture, university and social outlets, and re-prioritize your values. Your own home is a comfortable, customized pit stop during your busy week.

So, by staying light, freeing up clutter, choosing a flat that’s close to transportation and offers out- door space, and allowing yourself to enjoy the lifestyle and urban beauty at its best… you won’t sweat the square footage.

Oh, and the Michigan couple… we found a great brand new conversion, two bedroom condo with a large deck and front terrace, near the lake and Red Line for under $225K… oh and it’s a top floor too.

Thursday, April 13, 2006

When deals go bad

Recently, I represented clients of mine in what appeared to be a simple condo purchase. We looked for a couple months and found a great place that met their needs. I helped them present a strong offer, providing suggestions that would increse their chance of an accepted contract.

Oh, by the way, it was a multiple offer situation too.

My clients did present a strong offer and their contract was accepted. But of course, this is not the end of the story. Turns out a few things came up in the home inspection I arranged. More so, the condo association had scheduled major work to the building that would directly affect my clients potential unit. We caught many unknowns in the attorney review period.

When these issues arise, what do you do? Does it instantly mean the deal is over? Can you change the offer price? Can you get out of the deal if you do not like the terms?

Did the deal happen? If yes, why? If no, how come? What did our attorney and myself suggest to my clients?

Call me or email me sometime and you might be surprised by the answers.

Sunday, April 09, 2006

Great Open House

This weekend's open house was really terrific at 4518 N Ashland. Open both Saturday and Sunday, over a dozen groups came through. The majority were sent by Realtors or viewed one of our many advertisements. With showings previously in the week, and now two Monday night, I expect an offer this week.

Pricing was a very important aspect of this listing. It is difficult to find a 2 bed 2 bath with the same space, low assessments and location of this unit. It shows great and I market to all my contacts. As well our exposure is diverse. We feature properties on the most used web sites and continue to utilize Google and yahoo campaigns to reach condo buyers. We even have a full color print ad.

Sometimes it is difficult taking a listing that just doesn't look good. Sometimes clients demand to price the listing too high. This time, however, it's hard to deny the price is excellent and the showings are a pleasure.

Thursday, April 06, 2006

NEW LISTING: 4518 N Ashland

I just listed a 2 bed 2 bath condo at Ashland and Wilson. Great split floor plan with all the modern finishes. Granite, maple, marble, exposed brick, wood burning fire place... you name it.

The best thing about this place is the open kitchen/great room combo. It makes for a great sized room. Plus, there is a formal entry way and living room. You can actually have the family over for the holidays with this lay out (that is, if you want to).

The condo goes for $319K. Its great space and location. Walk to the Brown Line, Starbucks and boutique BYOBs!

As a Realtor, I don't always get the most ideal properties to show... This one however, is a terrific looking place in a great location... shows well and is at a price point many can afford.

Call anytime for a showing and look at pictures on our web site. Just click the link for our listings below or call 773-510-1597.