Home to Chicago

Archive for the 'First-time buyers' Category

The return of the multiple offer

filed under: Buyers, Chicago home sales, Edgewater, First-time buyers, Irving Park, Lincoln Square, Market conditions, Portage Park posted on April 8th, 2012

With home buyers streaming through Chicago neighborhoods this spring in search of a bargain,  I’m beginning to see a phenomenon that hasn’t reared its head much in recent years: the “multiple offer situation.”

Dreaded by home buyers but embraced by sellers, this pulse-racing affair occurs when more than one buyer makes an offer on a property at the same time, sometimes within the space of hours (or even minutes). The seller’s realtor will then advise all parties of the “multiple offer situation” and often ask everyone to submit their so-called “best and final offers.” Sometimes, however, one offer is so outstanding that the sellers will decide to negotiate further with only that buyer, leaving the others by the wayside.

I have been extremely busy during the last month, taking various buyers out to see properties as soon as they hit the market and helping submit dozens of offers (hence my recent lack of blog posts!) Many of our offers have been negotiated and accepted, but I can think of at least five that wound up competing against stronger offers and losing out. The bidding wars weren’t confined to a single price range, either; I saw them cropping up anywhere from a $130,000 condo in Edgewater to a $650,000 house in Ravenswood. In two situations, I was representing an investor who was bidding against five to ten other offers (often cash offers) for houses in Irving Park or Portage Park.

It is becoming commonplace to run into other buyers looking at the same property, and to hear the seller’s realtor mention that he/she has showed the home seven or eight times in one day.  By the end of March, I was advising my buyers to move quickly if they really liked a home — especially if it was priced well and in good condition. It’s always better to be the first one in and get the property under contract than to wind up paying more because someone else wants it too.

Written by Sue Fox // Please leave a comment.

3 ways to improve your house hunt

filed under: Buyers, First-time buyers posted on February 16th, 2012

This is the time of year when most buyers begin the search for their next home. Many of them will start by sitting down at a computer and browsing through property listings online, which is a great way to become familiar with the pricing, size and condition of homes in a given neighborhood. Going to open houses is  another time-honored way to start testing the waters.

But if you are serious about buying a home this year, there are several concrete steps you can take now — before you even contact a realtor or visit a single property — that will greatly simplify your search and improve your chances of finding a home that truly suits your needs.

1) Get pre-approved for a mortgage: Unless you can pay cash for a home, this is the most important step to take. It’s not as daunting as it may sound. All you have to do is call or visit your local bank, and chances are they have a mortgage division that will be happy to help. Otherwise, Guaranteed Rate and Wintrust Mortgage are both solid lenders who offer competitive rates in Chicago. The lender will run your credit and ask about your income, assets, and debt. Within a day or so, you’ll know whether you can qualify for a loan and how much you can borrow. This is a critical step, because lending standards are tight these days and buyers often need to improve their credit scores or ask family members to co-sign the loan (or give them cash for a down payment) in order to qualify. It is also vital to know how much you can afford, since there is a huge difference between what you can get for $200,000 or $300,000 or $400,000 in this market. The lender can also help you crunch the numbers to figure out what your monthly payment is likely to be.

2) Visit neighborhoods in person: Once you are pre-approved for a mortgage of, say, $300,000, you are ready to consider what that could buy in various neighborhoods. Some buyers already know exactly where they want to live, but many people are open to new neighborhoods or suburbs. This is where house-hunting online starts to break down. If you don’t know the area, you’re just looking at random homes on a screen without the context that will tell you whether there are any coffeehouses or shops or restaurants nearby or whether you will feel safe walking your dog at night. If your budget seems to be pointing you towards neighborhoods you don’t really know, it’s a great time to actually visit these areas for a few hours. Walk or drive around and see if you like what you find. If so, that may be a place to keep on your list as your search gains more focus.

3) Be specific: Now that you have a general idea of two major criteria — price and location — you are ready to drill down even further into specifics. What would your ideal home look like? Is it a condo or a townhouse or a single-family house? How many bedrooms and baths? Do your prefer a new or rehabbed home, or an older home with vintage charm (that perhaps needs some updating)? What else really matters to you? The school district? Parking? Being near public transportation? Living in a walkable neighborhood? The more specific you can be, the better. As a realtor, I always appreciate when buyers present a list of must-haves. Sometimes they fear they are being too picky, but being clear about your priorities actually is a major step in the search process. Of course, buying a home almost always involves some trade-offs, as you discover that the house with the fabulous kitchen is also on a busy street, or the place in the great school district isn’t as big as you would prefer. But if you can figure out the things that most matter to you in a home, it will spare you a lot of frustration and wasted time once you are out there looking.

I work with a lot of buyers, especially first-time buyers, and I know that many of these questions about neighborhoods, types of homes, and amenities can’t be fully explored until we jump in the car and actually go see some properties. But buyers who have done their preliminary homework tend to have an easier, more successful search. The spring house-hunting season is a bustling time, with lots of new properties hitting the market each week and thousands of buyers out looking, so being prepared can give you an edge when it comes to finding a great property. When the right house hits the market in an area you like, you will be ready to pounce … while another buyer who isn’t pre-approved and doesn’t really know the area will hesitate.

Written by Sue Fox // Please leave a comment.

More Chicago buyers shun condos and choose houses instead

filed under: Albany Park, Buyers, First-time buyers, Irving Park, Jefferson Park, Market conditions, Portage Park posted on February 5th, 2012

I’ve witnessed an interesting trend emerging in recent months, just by watching my own buyers as they move through the home-hunting process. And now I have some hard data to prove it: Chicago buyers are increasingly buying single-family houses, often skipping right past the condo stage that was once the point of entry for first-time buyers.

Five to ten years ago, if you were a North side buyer approved for a loan of $200,000 to $400,000, your best option was often to buy a condo if you wanted to live in a lively neighborhood with plenty of restaurants and shops (and sometimes even the lake) within walking distance. The Loop, South Loop, River North, Bucktown, Wicker Park, Lincoln Park, Lakeview, North Center, Roscoe Village, Lincoln Square, Andersonville, Uptown, Edgewater — all of these areas were bursting with new condo developments that made the most of city living at prices that were affordable for first-time buyers. Most of these folks never even considered buying a single-family house.

But today, Chicago housing prices have fallen so far that decent 3-bedroom houses can now be had for the price of a condo. The demand for single-family houses has climbed rapidly, with 37 percent of Chicago buyers choosing a house in 2011, according to data gathered by the National Assn. of Realtors. Two years ago, only 27 percent of buyers made a similar choice.

Likewise, the appetite for condos has waned. Just 39 percent of Chicago buyers opted for a condo in a building with at least five units in 2011, compared with 54 percent in 2009. (The rest presumably bought townhouses, two-flats or some other type of residential property.)

Among my buyers, the shift seems to be happening because they realize that by compromising a bit on the neighborhood, they are able to find a house for $200,000 to $300,000. These houses generally are neither large nor new. They tend to be around 1200 to 1600 square feet (often a bungalow, a ranch house, or an A-frame home) and they often need some cosmetic updating, especially things like refinishing the floors and renovating the kitchen and baths. But they usually offer all the appeal of a single-family house — including a backyard, garage, and basement, while NOT including a condo association, upstairs or downstairs neighbors, or monthly assessments.

“I never dreamed we would be able to afford a house,” one of my buyers recently told me. But more and more buyers can — particularly if they are willing to look a bit further west than they may have lived previously. Instead of the neighborhoods mentioned above, areas like Irving Park, Albany Park, Avondale, Logan Square, Portage Park and Jefferson Park are now attracting Northsiders who want a house but may only have $250,000 or so to spend. At price points around $300,000 and above, you can sometimes find newly rehabbed houses with finished basements in these neighborhoods. There is literally nothing to do but move in (which, in years past, was often the appeal of many new and gut-rehabbed condos.)

Written by Sue Fox // Please leave a comment.

Home prices expected to rise in 2012

filed under: Buyers, Chicago home prices, First-time buyers, Market conditions, North Center, Sellers posted on December 9th, 2011

At last, housing prices will finally hit bottom and begin to increase in 2012, according to a group of 54 economists surveyed by the Wall Street Journal.

The increase will be slight, probably less than 2.5% a year — not enough to keep up with inflation, the economists said. Yet the rebound will still be a welcome relief for homeowners across the country, who saw prices slip again this year. The economists predicted that home prices, as tracked by the Federal Housing Finance Administration, will fall 2.7% in 2011.

In Chicago, we’ve seen home prices drop about 5% this year, according to the most recent data from the Case-Shiller home price index. Prices started to recover here over the summer, only to dip ever so slightly (less than 1%) between August and September.

What’s next for the Chicago market? With interest rates at record lows — local lenders like Guaranteed Rate are now offering 30-year fixed mortgages at 3.85% — it’s still a stunningly cheap time to buy a home. But unemployment remains stubbornly high in the Chicago-Joliet-Naperville area, a factor that is likely to keep a lid on home prices. Even though Illinois led the nation in job growth in October, unemployment jumped from 8.8% a year ago to 9.7% in the Chicago area.

Written by Sue Fox // Please leave a comment.

Lakeview within reach: 2 bedrooms and 2 baths for less than $250,000

filed under: Buyers, Chicago home prices, First-time buyers, Lakeview posted on December 5th, 2011

Every year, I have a sizable number of buyers who want to live in Lakeview. They may already rent an apartment there, or perhaps in Lincoln Park, and they draw the line at Addison (or sometimes Irving Park Rd.) and refuse to go any further north, where housing prices drop considerably. And now, they don’t have to.

Like other hot neighborhoods in Chicago, Lakeview has become increasingly affordable. A nice 2-bedroom/2-bath condo, often including parking, is now within reach of many first-time buyers. There are now 53 such condos for sale at prices under $250,000, and 45 of them come with parking.

At the low end (under $200,000), many of the units are shorts sales, which will require some time and patience on the part of buyers to close the deal. These tend to be in high-rise buildings with vintage features, and some updating of kitchens, bathrooms, and outdated carpets is often needed.

In the $200K to $250K price range, the majority of these condos are also in high-rise buildings, but they are often larger and more updated, sometimes with lake views. Occasionally I’ll come across a Lakeview condo in a small building, but these are few and far between in Lakeview, and are typically snatched up quickly — if they are priced right.

Take a look at 634 W Roscoe St. #2N, a recent rehab in a 22-unit courtyard building in a prime east Lakeview location. It was initially (over)priced at $275,000 and has now lingered on the market for almost a year. But in that time, the seller slashed the asking price to $225,000. The unit is on the small side, with bedrooms that measure 14×10 and 10×9, but it is updated and includes a rental parking spot across the street for $185/month. It’s also in the coveted Nettlehorst elementary school district.

There are several other short sales in small buildings that are already under contract. Whether they will actually close is anyone’s guess. But if you want a sure thing, check out 1645 W School St. #401 in the popular 60657 Lofts building, right beside Whole Foods, Caribou coffee, and the Wishbone restaurant. It’s a loft with 2 bedrooms, 2 baths, nearly new kitchen appliances, a fireplace and a balcony for $249,900. This one, too, has been on the market awhile (since February) because it was initially priced $75,000 higher. The owner is asking an additional $25,000 for parking. But in this market, everything is negotiable.

There will certainly be more condos hitting the market as soon as the new year begins. So if Lakeview is your preferred neighborhood, 2012 should bring plenty of affordable condos to choose from — a rare opportunity in one of Chicago’s most desirable areas.

Written by Sue Fox // Please leave a comment.

Edgewater 2-bedroom/2-bath condo for under $150,000

filed under: Buyers, Chicago home prices, Edgewater, First-time buyers posted on November 29th, 2011

Check out my listing at 5400 N Sheridan, a low-rise building located a block from the lake in Edgewater. It’s hard to find a 2-bedroom, 2-bath condo — with parking included — in this area for less than $150,000, especially one that’s not in a high-rise building with high monthly assessments.

The assessments here are just $368 per month, and that includes heat, gas, and basic cable TV. And the unit is big, with 2 large bedrooms, including a master bedroom with a huge walk-in closet, an in-suite bath, and a full laundry room. There are newly-refinished hardwood floors throughout, an updated kitchen, a gas fireplace, and plenty of closet space. It also comes with a parking space and extra storage in the basement.

Best of all, this condo is just a block from the lake and three blocks from Andersonville’s shops and restaurants. It’s also close to the Red line, the Bryn Mawr historic district, and the new Dominick’s store at Foster and Sheridan.

We just reduced the price $10,000 to $149,900 — a great deal for this neighborhood — so give me a call at 773-816-1788 if you want to come see it!

Written by Sue Fox // Please leave a comment.

Chicago condos (and houses) for under $200,000

filed under: Buyers, Chicago home prices, Downtown, Edgewater, First-time buyers, Irving Park, Lincoln Park, Loop, Market conditions posted on November 25th, 2011

Most homes that are sold in Chicago sell for less than $200,000. While that figure may seem surprisingly low, $200,000 actually goes a long way these days. As we head into the 2012 home-buying season, I thought a brief survey of the market in some North side neighborhoods might help answer the question: What can you get for $200,000 or less?

Loop: The great glut of downtown condo buildings has made buying a home in the Loop quite affordable. The supply is abundant here — even at the low end of the market — with 114 condos for sale for under $200,000. In some buildings, like 800 S Wells, there are several units priced under $100,000! Closer to the $200K mark, you’ll find plenty of newer 1-bedrooms in full-amenity buildings, along with a fair amount of shorts sales and foreclosures to choose from. At 208 W Washington, for instance, there’s a 1-bedroom unit on the 21st floor that boasts a balcony, a large 18×12 bedroom, and a den — all for $184,900. It’s a short sale.

Lincoln Park: This is one of the most popular, and most expensive, areas of the entire city. But you can still afford to buy here on a $200K budget. There are currently more than 70 condos for sale for $200,000 or less — many of them studios or 1-bedrooms in the high-rise buildings clustered along Clark or Lincoln Park West. A corner 1-bedroom condo at 1850 N Clark #901 with unobstructed view of Lincoln Park, the lake and the city, for example, is now priced at $199,000 after nearly a year on the market. Parking is available for $150 per month.

Edgewater: If you live in Lakeview or further south, Edgewater may not be on your radar. It’s one of Chicago’s northernmost neighborhoods, nestled right beside the lake, with plenty of trees and parks and low-rise vintage buildings where neighbors stop to chat as they walk their dogs. There are also dozens of high rises along Sheridan that boast lake views as blue as any you’ll find downtown (but with a lot more space for the money.) Edgewater has been hit especially hard by the downturn, and there are now more than 300 condos for sale for less than $200,000. This is the place to go if you’re looking for a 2-bedroom and even a second bath. Examples include 5823 N Ravenswood #116, a 2-bedroom/2-bath loft with a large eat-in kitchen and a separate dining room. Garage parking is included in the $189,000 price.

Irving Park: If you venture a few miles west of the lake, housing prices drop to the point that you can buy a house for what a small condo would cost in Lakeview. That means that in Irving Park (and many of the “Park” neighborhoods like Albany Park, Portage Park, Jefferson Park etc.), you can find a tidy 3-bedroom bungalow, ranch house, or even a turn-of-the-century Victorian or Dutch colonial for less than $200,000. I’m not kidding. There are dozens of homes out there like 4114 N Central Park Ave., a rambling 4-bedroom Dutch colonial built in 1907, now for sale at $190,000. Many of these houses need at least some cosmetic updating, but they are affordable options for anyone who’s ever wanted a house of their own, complete with a backyard and garage.

Sauganash: Located in the far northwest corner of Chicago, Sauganash is a lovely, leafy community, almost suburban in its placid beauty. It’s relatively pricey, with many single-family houses going for $400,000 and up. There are still a few bargains to be had here for under $200K, however, including two 2-bedroom townhomes and several condos, most of them located in the same building at Cicero and Peterson (just off the Edens expressway and above the Whole Foods grocery store.)

In sum, there are hundreds of great deals out there right now at low prices — lower, in many cases, than it would cost you to rent a similar home. Happy house-hunting, and please call me at 773-816-1788 if you need any help!

Written by Sue Fox // Please leave a comment.

Downtown Chicago condo sales still sluggish

filed under: Buyers, Chicago home sales, Developments, Downtown, First-time buyers posted on November 20th, 2011

Condo sales in downtown Chicago continued to sink this fall, dropping 9% over this time last year. Developers closed just 229 sales downtown in the third quarter, according to a new report from Appraisal Research Counselors, a Chicago consulting firm.

In a weak market, some buyers were inspired to make the move only after steep price reductions. A recent story by Crain’s Chicago Business said that Parkside of Old Town, a redevelopment built at the site of the old Cabrini Green towers on Division Street, had the highest number of closings in the third quarter — 26 units — after chopping prices 30% to 40% over the summer. One-bedroom condos priced at $259,000 were reduced to $155,040 with a free parking space, while two-bedroom units went from $379,900 to $229,500, including parking. Parkside also offered buyer incentives like a $10,000 grant from the city.

Written by Sue Fox // Please leave a comment.

Chicago home sales up since last July

filed under: Buyers, Chicago home prices, Chicago home sales, Edgewater, First-time buyers, Lakeview, Market conditions posted on August 23rd, 2011

The latest Chicago housing data is out, covering the month of July, and it looks like both sales volume and prices have climbed slightly compared to last July. (But before you imagine a real estate rebound, remember that last summer Chicago home sales were in the gutter, once the federal tax credit for buyers expired. So things can only go up from there!)

Anyway, there were 1,655 home sales in the city of Chicago (single-family houses and condos) in July, an increase of 4.2% over the previous year. And the median home price in July 2011 was $210,000 — up 6.9% compared to the previous year.

“This is the first month, year-over-year, where we are without a federal tax credit and are encouraged by July’s sales, hopefully a positive outlook for the remainder of 2011,” said Mabel Guzman, president of the Chicago Association of Realtors. “There is an ongoing absorption of units throughout the city, specifically in the performance of the condo market over 2010, as well as compared to 2009.”

Some neighborhoods are obviously selling better than others. In Lakeview, for example, a popular area that is home to Wrigley Field and close to both the lake and downtown, there are now 260 condos for sale with 2 bedrooms and 2 baths. Another 64 of these condos are under contract (pending sale), and 122 have closed in the past three months. That’s a pretty good ratio in this market, with closed sales at roughly half the number of active listings. Condos in Lakeview, in other words, are selling.

Now consider Edgewater, another lakeside neighborhood just a couple miles north. There are 137 condos for sale right now that feature 2 bedrooms and 2 baths. Another 28 are under contract. But just 45 have closed in the past three months  — a much worse ratio than in Lakeview. The closed sales don’t even amount to a third of the number of active listings in Edgewater.

Unfortunately, I’ve been witnessing sluggish condo sales in other northern neighborhoods, like Lincoln Square, Andersonville and Uptown. With condo buyers scarce in 2011, many of them seem to be opting to live in areas that are closer to the Loop. For first-time home buyers (or anyone else with cash or good credit), this is an excellent time to snag a great deal in the most coveted, central parts of Chicago.

Written by Sue Fox // Please leave a comment.

Condo prices plunge in Chicago area

filed under: Andersonville, Buyers, Chicago home sales, First-time buyers, Market conditions posted on May 11th, 2011

Condo prices have tumbled 10.4% nationwide in the last year, according to data just released by the National Assn. of Realtors. But the plunge was much worse in the Chicago area, where prices dove 24.1% in the first quarter compared to a year ago.

The region (Chicago-Naperville-Joliet, in terms of the realtor’s association) fared worse than almost every other metro area in the country. Only the Tampa and Sarasota regions in Florida and Barnstable Town, Mass., saw condo prices fall further.

No wonder it’s getting so difficult to sell a condo in Chicago. What was once an active market has become seized and sclerotic, with thousands of condos for sale that just sit and sit and sit. I’m now seeing this troublesome trend in desirable neighborhoods like Andersonville and Lincoln Square, as well as much of Edgewater, Uptown, and even parts of Lakeview. Chicago’s North side seems to be awash in condos, may of them recent rehabs or nicely restored vintage units, that languish on the market for months despite their appeal. For many condos, showings are scarce and open houses attract only a few people, even at the height of the spring market.

What is going on here? Are young people, who traditionally drove the market for first-time condo buyers, deciding that it’s simply better to rent? Or are so many of them unemployed or under-employed that they can’t qualify for a mortgage? There are definitely fewer first-time buyers in the market these days; according to the realtor’s association, first-time buyers purchased 32% of homes in the first quarter, down from 42% last year when a $8,000 tax credit was stimulating sales.

If first-time buyers sit on the sidelines, our market will become paralyzed. First-time buyers drive sales by buying at the lower end, which then frees up those sellers to go buy another home. But if people can’t sell their condos, most of them won’t be able to buy again. They will be stuck. And unfortunately, this year many Chicago sellers are discovering that is exactly where they are.

Written by Sue Fox // Please leave a comment.