Sunday, November 29, 2009

Lincoln Square single family home sales in the third quarter 2009

Greater Lincoln Square single family homes have fared relatively well during our boom and bust cycle and still remains pretty stable as the market "bottoms out" currently. That said, we still realized a 19% decrease in median price for the third quarter 2009. We slipped to $482,500 from $595,000 in the good ol' days of '08. But as usual, that drop in price elicits a giant "gulp" without context. Remember, Lincoln Square is big but most people only associate it with the commercial corridor along Lincoln Avenue from about Montrose to Lawrence heading northwest. Homes near the farther north and northwest borders of the area are priced lower on average than those in central and southern locations.

30 single family homes closed during third quarter 2009 in the Lincoln Square community area, one of 77 community areas in Chicago. This is an 11% increase over 2008 third quarter. I predicted an increase condo transactions for third quarter due to low interest rates and federal first time buyer tax credits. Single family homes sales were probably driven more so by low interest rates, lower asking prices and stabilizing job situations.

For example, only 19 single family homes sold in second quarter 2009 this year reflecting the lingering uncertainty from the fall 2008 disaster. To close in second quarter, most home buyers were looking and making decisions during the first quarter, a time of a new presidential administration and great economic uncertainty. 19 homes is actually pretty good considering the mood of the country. Closing a single family home in second quarter is usually pretty attractive due to children's school schedules. So, a third quarter 30 spot (over 30% increase in unit sales from the spring) is pretty significant.
Expect decent sales numbers for fourth quarter this year in general. The tax credit high and low interest rates lit a fire under some sore fence sitting bums! October and November will show pretty big unit sales numbers.

As for what you get? Don't expect much under $450K (unless you want to live on Foster Avenue or consider yourself "handy"). Another interesting statistic is only one of the 30 homes closed on our MLS as a foreclosure or short-sale (a flooded Georgian foreclosure in Bud Long Woods for $200K).

All statistics taken from Midwest Real Estate Data, LLC which I'm a member.

Friday, November 27, 2009

Mommas don't let your babies grow up to be mortgage underwriters

One minute after this photo was taken, steam came out of my ears.

In a new-to-everyone shocker for today's lending environment, a client's home loan was denied by a large bank because the underwriters did not deem the comparable properties used in the appraisal sufficient. Despite factual arguments made by the ON THE GROUND appraiser, me and the listing agent of the subject property, the underwriters determined the market value of a property (of which they had never been in) on comparable properties they have never seen that are in neighborhoods the underwriters have never been in.

I guess the bank can lend to whomever they want. However, denying a loan to a qualified, ready, willing and able buyer for a renovated home being sold by a non-distressed owner in a stable neighborhood is one example what people are going through right now. The subject property had also a previous higher offer but the buyer lost his job during the purchase process. The property had multiple offers in a shorter than average market time yet market value is disputed.

Specifically, the bank underwriters want to value a renovated town home (that has new windows, baseboards, gutted newer kitchen, gutted newer bath, refinished and stained floors... etc) with over $60K in improvements inside and out at the same price as a mostly original town home built at the same time (mid 1960s). The distressed property was sold as a short sale just two months back. And we are only asking that the subject property sell at $15K above the short sale town home and for the appraised amount! The subject property is also selling well below the median price for three bedroom town homes in the area. Why the red flag?

Why can't the bank order another independent appraisal when there is a dispute? If the valuation is the same as the first wouldn't the bank be satisfied and want to make the loan? We all know most banks burned themselves in the bubble and government and self imposed regulations have made mortgage lending maddening for both loan officials and borrowers. But when transactions are getting stopped cold by underwriters in offices somewhere disputing on-the-ground property appraisals over a $15K difference... this is nuts. And that's what it's like out here.

At the moment, my client's mortgage broker has submitted the file to two other lenders as we all feel this should be a no brainer. Because the buyer is using an FHA loan, we won't need a new appraisal when switching banks. However, there will be a red flag due to the first denial to lend at the contract price. It's wait and see for now. My guy is stuck and the sellers can't close on their new home until they sell their current place... everyone waits with a lot to lose.

Wednesday, November 25, 2009

Babies move condos; More clients selling with kids

When I began my real estate business in Chicago, I worked with mainly single/no kids and married/no kids people by chance. Suddenly this year many of my clients are squeezed into their condos thanks to "recession babies" my circle likes to call them. It seems everywhere I turn, new and old clients have "one on the way", a two year old, a couple of them, or another one on the way. Just look at all the property photos with cribs in them (actual baby cribs, not MTV "Cribs"). I've even had several conversations lately at weddings and parks with frustrated sellers (and current owners that would like to move) who have kids. A baby boom has become a real nich market for me.

It's sort of a catch 22. It's really great having your first kid in the city, even in a small condo. The ability to walk to retail, restaurants, parks and free stuff is fantastic. The diversity of friends in the community (age, sex, marital status, socioeconomics, educations etc...) keeps us vibrant and is why we live in the city besides our jobs. It's all good until #2 shows up or you just plain outgrow your current situation. It's at this very moment where it becomes harder to keep your home in good showing condition. Showing your home also becomes much more of a hassle on your lifestyle and schedule when you have kids.

Even though city condo values are lower now in general than in the last several years, many of my clients have the ability to sell and move on to suburban single family homes, a city town home or even a single family. The core Chicago neighborhoods have held up pretty well and even selling at a loss is not a disaster if you really need a bigger place. As the saying goes, you'll save on the "move-up" property. That's, of course, if you have the ability to sell and walk away with a few bucks still in the bank.

The key is to prepare the home to show at it's best and price at the true lower end of the market. My job is to get this to happen one way or another. You will sell quicker, get the top dollar allowed in this market and keep your stress level to a minimum. The main obstacle is going to be you, the seller. If you really have to move the family then it's time to let go of markets past. If you live in the now with your loved ones (and listen to your Realtor when preparing the home for sale), you'll sell your home and begin your next phase of life.

You have to be committed 100% to move or be prepared for frustrations.

Tuesday, November 24, 2009

In case you have not heard: Chicago home sales up 33% in October

As predicted here, unit sales were way up in October for the Chicagoland area, while median price continues to drop. We'll see a big bump in closings in November too. Remember, the Chicago area statics stated here in the Tribune story linked are from a pretty big area. The stats on your home, neighborhood, block may look very different depending on "what you got".

Sunday, November 22, 2009

New construction condos in Northcenter Chicago? At what price I ask.

True mobile blogging...snatching photos of new construction in Northcenter... while driving.

Are developers back in? I spotted these new construction condos going up quickly at the 4100 block of North Damen in Northcenter. The buildings are similar to the yet-to-be-sold-out-forever condos next door. City wide in general, smaller new construction and new conversion development projects have been elusive for a good year or so. There are many reasons, starting with developer and buyers inability to get financing due to sometimes maddening guidelines. I digress.

The existing top floor, three bedroom condo for sale at 4043 N Damen is now listed at $419,000 plus $25,000 for a parking outdoor space... not garage spot. The over-all market time for this property is over 600 days and it was originally priced at $565K. Nice finishes, great front terrace but no roof top deck. Natch.

I have not found sales information on line for the new buildings just yet. Let's hope they are three bedroom units (at least), priced well and finished for the new first time buyer's rush we'll see early spring 2010. This is a nice, if not busy location, located across from a CVS drug store, a Jewel Food Store, 5 minute walk to the CTA Brown Line train at Irving Park Road, and a bevy of newer restaurants and bars including the popular Brownstone sports bar and upscale Sola restaurant. It's a good spot to get to other neighborhood entertainment centers like Lincoln Square, Roscoe Village and Wrigleyvill quickly.

If you have question concerning Northcenter condos or these units specifically, please give me a call.

Thursday, November 19, 2009

Ravenswood development update: Sears parking lot re-development round two

New lot same as the old lot? As of now, that is.

There has been a small spike in news and interest surrounding the proposed Sears lot development in my beloved Ravenswood, Chicago. We may be nearing a new community meeting with updated developer plans. Last I checked with the Alderman's office this month, there was no date for a meeting but I'm hearing rumors we are getting close.

I was quoted in an article by as seeing the proposed 11 story building as "weird". I may have said "weird" among other things, but mostly I am supportive of a 5-7 story building and interested in how they will fill it. Market rate sales? Rental? I believe we can support a larger, new construction building in Ravenswood in the coming years if the price is right to consumers (rental or sale). However, we know of a couple empty lots sitting where new construction 12-14 unit condo buildings were to be built at the 4900 block of North Damen and the lot at West Wilson and North Ravenswood shown below.

But a transit oriented development at the Metra station with retail and parking garage is a different bird all together. I do not think inventory is greatly available or readily affordable near the transit in Ravenswood... so, shiny new rental units with built-in retail (i.e. a full service grocery store) in a desirable central location on Metra makes sense.

If they were to build a 6-11 story building for condo retail sale, pricing couold be slightly higher than the Catalpa Gardens development in Edgewater . They recently slashed prices and sold a great number of units in a short period of time. The Sears lot development location is more desirable in my opinion, but the gurus in charge of projecting pricing should be wary of recent mid-rise and high-rise price reductions and auctions that have helped set market pricing around town.

Please see my lasts posts about the development for other concerns from the community by clicking the links below:

Ravenswood new development in Sears/Metra parking lot

NIMBY or not, Ravenswood development ruffles feathers

Tuesday, November 17, 2009

Southport Corridor Jewel coming along...sort of

I took this shot of construction progress from my truck while driving south on the 3600 block of North Southport Avenue in Lakeview. The new Jewel Food Store is slated for fall 2010. Even though I live in Ravenswood, I would stop at this location often for a cheap lunch or other items while criss-crossing the north side.

Having a grocery store within a few blocks walk may be one of the more underrated amenities factored in when searching for a home. I'm not sure I hear that in my Top 5 "must haves" from clients... or maybe it's already under the umbrella of "good location". Southport Corridor is a highly desired and relatively expensive area due to amenities like a central grocery store. The area definitely deserves an improvement over the old Jewel.

Click here for other Southport Corridor posts

Monday, November 16, 2009

Albany Park, Ravenswood Manor two flat for sale: now $430,000!

I'm bringing sexy back at 4735 N Whipple, a large two-flat building on the Ravenswood Manor and Albany Park border, at $430,000. This is a $45,000 price reduction. The numbers work great on this type of deal.

Live in the large three bedroom unit upstairs and rent the bottom two bedroom for at least $1,200 a month. Both floors are renovated and move-in ready.

*Take advantage of higher FHA loan limits NOW before they change at the end of 2010.

Click the photo below for more details.

Now THAT'S sales

Many of you have seen this advertisment leaving the Webster Avenue emmissions testing facility. Can't beat old school ad placement.

Chicago home sellers should understand buyer's tax credit

Home sellers should take advantage of the first time buyer's tax credit extension.

My number one goal this November and December is to reach out and touch every past client and future client and make them aware of one thing (at least): If you're going to sell your home next year, try to be on the market January 2nd, 2010. Or now!

I was just at a wedding where some guests told me they took their under $300K condo unit off the market in September this year after only 3 months on the market...September! We just had one of the most active third quarters in real estate since forever helped by the original first time buyer credit deadline of November 30th... and they were getting a ton of showings. Despite some understandable reasons, they blew the best time to be on the the deadline when people could come back to make a decision.

Don't let this happen to you. If you do not get your place ready and on the market as soon as possible, the new April 30th deadline will come and go before your Holiday Hangover subsides. I'll have more details in upcoming posts, but email/call with questions on how to get your place going. Take a shot!

Wednesday, November 11, 2009

Saturday, November 07, 2009

Top Banana Award! What's the most expensive condo in Old Irving Park?

After a recent purchase transaction with a client in the Old Irving Park neighborhood of Chicago, I got to thinking.. What's the most expensive condo in Old Irving Park? Someone has to be "Top Banana", so let's take a look.

Irving Park is one of the 77 Community Areas of Chicago. Old Irving Park is a popular neighborhood within the community... great for families and commuters. From the Old Irving Park Association web site:

Old Irving Park neighborhood boundaries are those of the original two farms developed here in the 1870's: Addison on the south, Montrose on the north, Pulaski on the east and the Milwaukee Road railroad on the west (approximately Kilbourn/Kolmar). This historic and architecturally diverse area is conveniently located to two Metra stops, the CTA's Blue Line subway to downtown and O'Hare airport, and the junction of the Kennedy and Edens (90/94) expressways.

The most expensive condo (or attached residential property) is 3711 N Milwaukee Unit 6 UNDER CONTRACT at $515,000 (click the link for photos). The original list price for this 3 bedrooms, two and two half-baths town home style residence was $574,900 and shows a larger than life 420 days on the market on our local MLS. However, it shows an under contract date of 5/20/09, Hmmmmm. Did it close yet?

No matter; it's still Top Banana in Old Irving Park Chicago.

The runner up is a four bedrooms, two and one half-baths attached row house at 3710 N Kostner for $499,000. It's listed as a short sale and is now under contract as well. High end condos and attached units in Old Irving Park are selling well apparently.

The highest priced attached home in the Irving Park Community Area is on the eastern end of the community at 3938 N Fairfield Ave (click the link for photos). This four bedrooms, three and one-half baths town home is all yours for $699,000.

Friday, November 06, 2009

Southport Corridor and Graceland West: Lakeview Open Houses

The weather should be good this weekend. You can find me on the terraces and decks of other people's homes this weekend.

I will host an open house in Lakeview's Southport Corridor at 3616 N Janssen #1N Saturday 11/7/09 from 12P to 3P. Asking $589,500, this is three bedrooms, three full baths duplex condo with garage parking. The location in Blaine school district...and five seconds from Julius Meinl Coffee... speaks for itself. See property details below.

On Sunday 11/8/09 I will host 4110 N Southport #2 in Graceland West from 12P to 3P . This is also steps away from the Southport Corridor retail strip.

Asking $289,900 this is a two bed, one bath with eat-in kitchen and great deck. Rental parking is on site or easy street parking (seriously).

Thursday, November 05, 2009

Slackers rejoice! Home buyer's credit extended, expanded

If you procrastinated your way out of this season's home buyer's credit, Congress forgives you.

You may now procrastinate until April 30th, 2010. We'll, to be safe you better get that contract signed by March 15th. My team will be here waiting for you to call for showings...on March 1st.

Check out this side by side comparison of the main components in the

Home Buyer Tax Credit (click the link)

Monday, November 02, 2009

Chicago area new home sales up, contracts up nationally

I'll have an all time one month record for closed unit sales this month of November (assuming all my pending contracts close as scheduled). This is highly unusual as my unit sales volume is greatest every year in April, May or June. It is just one illustration of how unique each year, month and day of the real estate market really is.

This second half of the year has been moved by lower asking prices, lower mortgage interest rates and Uncle Sam's first time buyers' credit. The opportunity to buy a primary long term home or well located condo has been a reality to many, not a sales pitch. Although I still managed to have my average number of sales units thus far, the first half was slower than the third quarter and the attitude full of trepidation. Now people are happy and excited to make a home purchase they feel good about.

Here are a couple stories sent to me by my brokerage showing some positive local and national movement in the market along with analysis for what's coming around the corner.

More positive news on new-home sales

By Alby Gallun, Nov. 02, 2009

(Crain’s) — After enduring a three-year freefall, local homebuilders have nowhere to go but up — or at least sideways.

Chicago-area new-home sales rose for the third quarter in a row on a seasonally adjusted annualized basis, according to housing consultant Tracy Cross & Associates Inc., another sign that the worst is over for homebuilders.

Yet where the market goes from here will depend on the broader economy and job market, which isn’t likely to surge back anytime soon.

“You can’t get blood out of a turnip, and that’s where the problem is,” says Tracy Cross, president of the Schaumburg-based firm.

On a seasonally adjusted annualized basis, local residential developers sold 4,666 homes in the third quarter, up 15% from a rate of 4,054 in the second quarter, according to a recent report published by the firm. The market bottomed out at 2,786 sales in fourth-quarter 2008.

The bad news is that 2009 will likely go down as the worst year for homebuilders since World War II. Even with the recent pickup, the beginning of the year was so bad that Mr. Cross expects developers to sell just 3,700 homes this year, down 42% from 6,374 in 2008 and 89% from the peak of 33,287 in 2005.
Sales in the city bounced back in the third quarter, as developers lured buyers by slashing prices by as much as 35%. Chicago builders sold 1,967 units at a seasonally adjusted annualized rate, nearly triple the 674-unit pace in the second quarter.

Chicago condo developers are still sitting on several thousand unsold units, ensuring that the discounting will continue. The developer of the 168-unit Park Monroe recently reduced prices on several condos in the project at 65 E. Monroe St.; one-bedroom, one-bathroom condos there now are listed at $299,500 down 25% from $399,900 previously, according to the development’s Web site.

The quarter was tougher on the suburban market, where seasonally adjusted annualized sales fell 20% from the second quarter, to 2,699 units. One reason: The $8,000 federal tax credit for first-time homebuyers boosted suburban demand in the first half of the year, but sales petered out in the third quarter because the credit is set to expire Nov. 30, Mr. Cross says.

Because of the time it takes to build a new home, suburban buyers who signed contracts in the third quarter wouldn’t have been able to close on the purchases until after the deadline, removing the sense of urgency to buy, he says. Tracy Cross records a sale when a purchase contract is signed, not at closing.

The tax credit has been less of a factor in the city because new homes there, with an average price of $587,158 in the third quarter, are beyond the means of many first-time buyers, Mr. Cross says.

Congress is considering extending and expanding the homebuyer credit, possibly until April 30, but that won’t be enough to ensure a recovery in the U.S. housing market.

Even if the credit is extended, “home demand and prices will deteriorate again once the credit eventually expires — especially if job creation does not materialize in light of further anticipated increases in housing inventory as mortgage delinquencies and foreclosures rise,” CreditSights Inc., a New York-based research firm, writes in a recent report.

The other key factor is the availability of mortgage financing. Condo developers continue to gripe that lenders have tightened their underwriting standards so much that creditworthy borrowers can no longer get a loan to finance a new condo purchase. And mortgage rates are rising again, fueling concerns that higher borrowing costs could stall a market recovery.

Though he’s written off 2009, Mr. Cross expects new home sales to rise about 20% in 2010, rising ultimately to about 22,000 units annually.
“We don’t see Chicago ever coming back to what we saw in ’04 and ’05,” he says.

CNN reports on sales