Sue Fox, @Properties. Direct 773.816.1788
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This spring, it seems that Chicago homeowners have gotten the message that housing prices have dropped considerably — and they’re not coming back anytime soon. As I meet with prospective sellers this month, I’m sensing a sober new attitude towards selling their homes. People are being realistic, thoughtful, even calm as they digest the latest sales figures in their neighborhood and decide on a reasonable price.
It’s a noticeable change from recent years, when sellers were apt to be more skeptical of the comps, and more insistent that their home must be worth more. Chicago home prices have been falling steadily for about five years now, with each year worse than the last, and at this point many of those folks who wanted to sell in 2007 and 2008 but kept waiting until the market recovered have finally concluded that a rebound could be years off. Do they want to keep waiting?
Some of them, the ones who really need to sell, are deciding to bite the bullet. I have four new listings on or about to hit the market, and all of the sellers know that they are not going to make any money on their sale. Three of them are listing their homes for less than what they paid four or five years ago.
While the circumstances vary, it’s not uncommon these days for people selling an ordinary, run-of-the-mill condo to lose $50,000 on their sale, when you factor in the commissions and closing costs. That’s why inventory in Chicago is so low right now — the month’s supply in January was 30% lower than it was a year ago. People who can’t afford to sell simply aren’t selling (or else they are attempting a short sale.) People who can afford to sell are, it seems, finally pricing their homes to actually sell them.
And deals are getting done. I just sold a house in Evanston last week… for about 10% less than the seller paid for it in 2004.
Chicago home prices slipped again in December, capping another dismal year for the Chicago real estate market. According to the Standard & Poor’s/Case-Shiller Home Price Index, average home prices in Chicago fell 7.4% in 2010. This is even worse than the 7.2% drop in 2009 (but not as bad as the 14.3% plunge in 2008.)
As a whole, the 20-city index has fallen 31.2% from its peak, according to data released this week. Average home prices in Cleveland, Detroit, Atlanta, and Las Vegas are now below what they were 11 years ago. Robert Shiller, the Yale economist who co-founded the index, said this week that he sees “substantial risk” that home prices will continue to fall — which would put Chicago (along with Dallas, Charlotte and Minneapolis) there, too. In Chicago, the home price index is already back to its March 2002 level.
Chicago condo prices, which until now have remained one of the brighter spots in our market, fared even worse in 2010. Condo prices fell nearly 12% citywide, substantially worse than the 8.7% decline in 2009 and the 7.3% drop the year before. The condo index has sunken back to its July 2001 level, making this a lost decade for Chicago condo prices.
But not everyone is lamenting. This is a fantastic time to be a buyer, obviously (if you have cash or can qualify for a loan!) Home buyers have their pick of some very choice Chicago real estate at what are now basically the lowest prices seen in a decade.
I’ve noticed that inventory is down, however — probably because so many home owners can’t stomach the idea of selling at these prices. Fewer people are listing their homes for sale than in recent years. Last week, for example, there were only 1,120 property listings in Chicago, compared to 1,552 a year ago. That’s a significant drop — 28% fewer listings in just one year. The decline means buyers have fewer properties to choose from, so the popular ones may actually attract multiple offers.
Check out my latest listing, a lovely 2-bedroom, 1-bath condo in the heart of east Lakeview, at the corner of Waveland and Pine Grove. It’s the ideal mix of vintage charm and modern upgrades, and it’s priced to sell at $235,000.
Located at 3702 N Pine Grove Ave., this condo is in a great neighborhood, about two blocks from the lake and half a mile to Wrigley Field. Right when you walk inside, you feel the warmth of the interior, which has beautiful wood trim and hardwood floors throughout. This property features a large living room with a wood-burning fireplace, a formal dining room, and an updated kitchen with stainless steel appliances. It comes with a private balcony as well as a rear deck, and the building has a roof deck as well.
You can see more photos here. It’s a lovely place, and unlike many vintage condos this one comes with a washer and dryer inside the unit.
Please call me at 773-816-1788 if you’d like to see this condo. At this price, it won’t last long!
Last night I was supposed to take some buyers house-hunting in Evanston, our third time out in recent weeks. With weather forecasters predicting a dire snowstorm, I checked in with my buyers earlier in the day to see if they still wanted to go.
At 11 am the answer was yes, but by 4 pm (once the snow had started swirling) we were all thinking better of it. I canceled our showing appointments and hunkered down with a mug of hot chocolate and some old episodes of “Friday Night Lights.”
But today, even with roads unplowed and alleys blocked and cars buried and schoolchildren home all over the vast city of Chicago, our real estate market is forging ahead. Yes, the Chicago Assn. of Realtors did close its offices today (as did @properties and other firms), but 333 new property listings nonetheless hit the market in the last 24 hours!
Blizzard of 2011 notwithstanding, many intrepid buyers (including mine) are making plans to go out looking again tomorrow, and some are even making offers. According to the MLS, 166 Chicago-area homes went under contract over the past day.
Among the fresh listings today are dozens of foreclosures, some of them deals that seem rather tempting. Take 1138 W Catalpa Ave. #D2, a 2-bedroom, 2-bath duplex-up penthouse condo for just $252,500. It’s in a relatively new (2003) building on the corner of Broadway, just a block from the Red line. Boasting a “great view of the city skyline,” this condo has a newer kitchen with Sub-Zero stainless steel appliances, granite counters and a large island; a 16×15 master bedroom featuring a wall of windows; and garage parking included in the price.
Is this a good deal? Originally priced at $447,000 in 2007, this condo has had a tough time of late: It’s been through four realtors and what looks like an unsuccessful attempt at a short sale, where it was under contract for most of last year before apparently sliding into foreclosure. But now, a price in the $250K range for a newer 2BR/2BA with parking in Andersonville? That’s hot enough to melt off some of this snow.
Got a million dollars? If the recent sales figures are any indication, more wealthy home buyers are sinking their cash into Chicago real estate, driving up sales of condos and houses priced at $1 million or more. Sales of such properties jumped 31% in 2010, according to a recent story in Crain’s Chicago Business.
Such transactions are relatively rare: There were only 480 Chicago home sales for $1 million or higher in 2009, and 630 last year. These pricey properties, which are typically found in choice neighborhoods such as Lakeview, Lincoln Park, Old Town, Gold Coast, and Streeterville, tend to move slowly, sometimes taking a year or more to attract a buyer. In a sluggish market like ours, this means the backlog of unsold luxury homes could easily amount to an 18-month supply — more than twice the inventory we’d see in a healthy market.
The downtown Chicago condo market helped drive the increase in high-end sales, according to Crain’s. Luxury condo sales soared nearly 50% , to 364 units in 2010. Closings at new high-rises — like the Gold Coast’s Elysian Hotel & Private Residences, 11 E. Walton St., and Walton on the Park, 2 W. Delaware Place — contributed to the increase.
If you’re in the market for a high-end property, now may be the ideal time to buy. The median price of Chicago’s luxury single-family houses slid 12% to about $1.3 million last year, compared to $1.5 million in 2009. The median price for high-end condos actually rose a bit, but it was skewed by sales at top-shelf projects such as the Elysian. In general, Chicago condos with million-dollar price tags can now also be found in (the swankiest corners of) the bargain bin.
The new year is here, and Chicago’s classic brick bungalows — a beloved favorite of mine — are once again popping up for sale, at prices similar to those last seen five to ten years ago.
Here is a new listing that just hit the market this week: a 5-bedroom, 2-bath home on a 30-foot-wide lot near the river in Albany Park. Located at 4940 N Whipple, this 1921 bungalow features original woodwork and some updates such as newer electrical service, 3-year-old tuck-pointing of the brickwork, an updated garage, and a tankless water heater.
The large 17 x 16 foot living room is vintage bungalow style, with a (decorative) fireplace flanked by bookcases and topped with a lovely leaded glass window. The rear panels of the bookshelves appear to be made of beadboard, giving them a classic look. There is also a formal dining room and hardwood floors throughout the house.
The bungalow, described in the listing as “deceivingly large,” features three good-sized bedrooms on the main level, and two large rooms on the second floor. The basement is partially finished. But some areas need work, including the kitchen, which has outdated cabinetry and white appliances.
Priced at $349,900, the house sits on the eastern edge of Albany Park, right beside Lincoln Square. If you would like to see this bungalow, or any other home, please give me a call at 773-816-1788.
Andersonville, home to the tony Lakewood-Balmoral district of beautiful turn-of-the century homes, is now seeing a variety of historic homes selling at bargain prices. Even some of the gorgeous rambling Victorians — the kind that used to routinely go for more than $1 million — have been selling at sharply reduced prices.
Take 1450 W Summerdale, a 4-bedroom, 3-bath, elegantly restored Queen Anne Victorian that sold in December for $837,000. It was originally priced at $939,000 when it hit the market in May 2010. Or 5418 N Magnolia, a historic 1911 house in Lakewood-Balmoral that was offered “pre-foreclosure” for $975,000 in June. It sold in October for $825,000.
New homes — a relative rarity in Andersonville — could also be found in the bargain bin. 1619 W Winona, a newly constructed 5-bedroom home featuring a media room with a wet bar, a chef’s kitchen, and a roof deck was priced at $925,000 when it hit the market last January. It sold for $867,000 in July.
I’ve lived and owned property in Andersonville for six years, and a few years ago it was nearly impossible to find a single-family house here for less than $500,000. But several Andersonville houses have recently sold in the $400,000 range, including a short sale at 1701 W Farragut that went for $400,000 in September. This one was a lovely 3-bedroom house, built in 1904 but still in good condition, with an updated kitchen. (It lacked a garage, however.)
Another short sale, a 3-bedroom brick Victorian at 1657 W Carmen, sold for $435,000 in August. With an updated kitchen and baths and a lofted third bedroom, the house was originally priced at $575,000 in October 2009. And 1520 W Hollywood in north Andersonville, a cute and compact 3-bedroom in updated condition, sold for $397,000 in August. I remember showing this little blue house to buyers over the summer, when it was priced at $450,000.
So if you love Andersonville’s friendly vibe, the restaurants and shops along Clark Street, the leafy streets and proximity to the lake and Red Line, now is the time to put down roots in a great community where houses used to be out of reach for everyone but the wealthy.
Sales of Chicago single-family houses and condos fell a dramatic 38.5% in November compared to the previous year, according to the latest data from the Illinois Assn. of Realtors. Prices slipped, too. The median home price in the city of Chicago was $206,000, down 4.2% from $215,000 a year ago in November 2009.
While prices seem to be looking for a bottom, far fewer properties are changing hands than in years past. If you look three years back, to November 2007, you’ll find that 1801 sales closed that month compared to 1144 this November, a sobering 37% plunge. Prices plummeted in those three years as well, sinking from a median sale price of $290,000 to today’s $206,000 — a 29% drop.
This is why we’re now seeing so many short sales and foreclosures in Chicago. Thousands of people who bought homes in 2005, 2006, 2007, and even 2008 have seen the value of those properties drop perhaps 10 to 40%, depending on what they own in which neighborhood. If they need to sell due to a job loss, move, divorce, illness or any other reason, they may find that a short sale (or even a foreclosure) is the only way out because they owe their lender so much more than the home is now worth.
It’s a vicious cycle, and it looks like it will continue into 2011. The more distressed properties pour onto the market, the more prices will be pushed down, which makes it even harder for existing owners to keep their heads above water when it comes time to sell.
Sellers will need to price their homes more aggressively than ever in the new year if they want to find a buyer. And buyers (the few that remain ready with cash or strong enough credit to obtain a mortgage) will continue to find many excellent real estate bargains and low interest rates throughout Chicago in 2011.
Today the Illinois Assn. of Realtors released its October sales data, and WBEZ housing reporter Ashley Gross called me to discuss the latest grim numbers (listen to the WBEZ interview here).
In the city of Chicago, home sales fell nearly 40% in October compared to the same month a year ago, with 1,217 sales compared to 2,012 homes sold last October. Much of the decline, in my opinion, can be attributed to the death of the federal tax credit for home buyers. Buyers last year (and for the first four months of 2010) stood to reap thousands of free dollars from the federal government if they bought a home. But once the credits expired in April, so did much of the demand from home buyers.
In Chicago — as the local realtor associations like to point out — total home sales from January through October are still up 4.6% compared to the first 10 months of 2009. That’s true, and that’s good news. Overall, our local market found some stability in 2010.
However, all of that gain came in the early months of the year. Ever since the summer, we’ve watched sales volume wither. The story is much the same throughout the larger Chicago metropolitan area as well as Illinois as a whole.
But prices have plunged more steeply in Chicago than the rest of the state. The city’s median price in October 2010 was $183,000, a 14.9 % decline compared to $215,000 in October 2009. For the state as a whole, prices fell 6.5% over the past year.
As I told WBEZ, I don’t expect a recovery in 2011, not with so many foreclosures clogging our Chicago market. Home sellers need to price their properties accordingly if they want to attract a buyer — an increasingly rare species these days.
I was just reviewing the data on Chicago home listings and closings for the first week of November. I hate to say it, but even this unseasonably warm weather hasn’t kept our real estate market from going ice cold.
Far, far fewer homes are being sold now than at this time last year, according to the latest Chicago Association of Realtors stats. For example, during the first week of November last year, 555 sales of single-family houses, condos, or multi-unit buildings closed in Chicago. But this year? There were only 273 closings in the first week of November.
That’s a 50% drop in a single year! And this year, keep in mind, interest rates are significantly lower than they were last year, making this a better time to buy. So where are all the erstwhile Chicago buyers?
I suspect that many of them, if they were in a position to buy a home in 2010, already did so. Why wouldn’t they have bought in the spring, or even last year, to take advantage of the $8,000 federal tax credit for first-time buyers (or the $6,500 credit for other buyers)? That was when my business, and that of most other realtors I know, was running at a fever pitch as everyone scrambled to put deals together before the credits expired on April 30.
Since then, as the November data reflects, real estate has been slow. Prices have resumed their steady downward slide in most Chicago neighborhoods. Fewer buyers mean fewer closings — despite record low interest rates — and fewer closings mean sellers will face a tougher time than ever.
After all, Chicago property listings are continuing to hit the market, to the tune of nearly 1,000 per week! That is fewer listings than we saw this time last year, when 1,210 homes hit the market during the first week of November 2009. But it’s only a 19% drop in listings, compared to a staggering 50% drop in actual sales that closed.
Which means that if you want to sell your home anytime soon, you will be trying to thread an increasingly tiny needle. Please call me if you need a hand.
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