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Home sales up 28% in June as prices slip

filed under: Andersonville, Bungalows, Buyers, Chicago home prices, Chicago home sales, First-time buyers, Market conditions, Tax credits posted on July 22nd, 2010

BUNGALOW BEAUTY: This restored historic bungalow in Andersonville was one of the 2000 Chicago homes that sold in June.

BUNGALOW BEAUTY: This restored historic bungalow in Andersonville was one of the 2,526 Chicago homes that sold in June. With a fireplace, built-in bookshelves, a gourmet kitchen, a full finished basement and a landscaped backyard, this home attracted multiple offers. I sold it in 3 days!

You can really see the impact of the $8,000 tax credit for first-time buyers. In June, the final month buyers could claim the credit, Chicago home sales shot up nearly 28% over the previous June, according to data released today by the Illinois Association of Realtors. That marks the 1oth consecutive month of year-over-year increases in Chicago.

But just because more properties are changing hands doesn’t mean home prices are recovering. In fact, the opposite is true in Chicago. The median home price, now $234,250, is down 3.2% compared to a year ago.

Genie Birch, president of the Chicago Association of Realtors, pointed out that the year-to-date number of homes sold in Chicago is up 41% for the first half of 2010 versus 2009. “We believe this is a positive indicator that Chicago’s housing market is stabilizing,” she said. “Motivated buyers and sellers are working toward realistically closing deals at current market values.”

I have my doubts about whether our market is truly stabilizing, or whether we are just witnessing a final surge of home sales fueled by a government stimulus program that no longer exists. Congress has since extended the date to close on a home purchase through September (provided you were already under contract by April 30) to help people seeking the tax credit who were unable to close by June 30, the original deadline.

So we may yet see a slight swell of closings in July, August and September that were actually spurred by the tax credit. But that doesn’t mean our local housing market is healthy enough to stand on its own.

Written by Sue Fox // 1 Comment »

Chicago home sales surge 32% in May; prices climb 2%

filed under: Buyers, Chicago home prices, Chicago home sales, First-time buyers, Lakeview, Market conditions, Tax credits posted on June 24th, 2010

LUCKY IN LAKEVIEW: This house

LUCKY IN LAKEVIEW: This updated, 4-bedroom Victorian at 1307 W Byron Street closed in May for $675,000. Priced at $699,900, this century-old historic home sold in just 10 days.

Thanks to the federal home buyer’s tax credits, Chicago buyers turned out in droves to snap up properties in May, according to data released this week by the Illinois Association of Realtors.

In the city of Chicago, May home sales (single-family and condominiums) skyrocketed 32.1% to 2,057 sales, compared to 1,557 homes sold in May 2009. The increase marks the the ninth consecutive month of year-over-year sales gains. Sales are now almost back to where they were two years ago in May 2008, when 2119 homes were sold in Chicago.

Even more impressive, the median home price — which has been falling and falling in Chicago for several years now — actually ticked up 2.2% in May over the previous year. Chicago’s median price is now $230,000, up from $225,000 in May 2009.

“The tax credit created a more positive impact on the Chicago marketplace than the movement we saw in 2009,” said Mabel Guzman, the incoming president of the Chicago Association of Realtors. “Additionally, the credit afforded buyers the opportunity to look at higher-priced homes, helping keep their options more affordable.”

I expect that we’ll see more of the same — dramatically increased sales, and possibly slightly higher prices — when the June numbers are released. But home-buying demand has certainly slipped in Chicago since the tax credits expired April 30 (the date by which buyers had to have a home under contract in order to qualify.) They have until June 30 to close the deal.

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Back to 2001 for Chicago home prices

filed under: Bungalows, Chicago home prices, Edgewater, Market conditions posted on June 10th, 2010

TIME WARP: This Edgewater bungalow, located at 1537 W Norwood, sold in October for $396,000. Back in 2001, three other houses sold on the same block at prices ranging from $358,000 to $375,000.

TIME WARP: This Edgewater bungalow, located at 1537 W Norwood Avenue, sold in October for $396,000. Back in 2001, three other houses sold on the same block of Norwood at prices ranging from $358,000 to $375,000.

Doesn’t it feel like wherever your money is invested, it hasn’t really grown over the last decade? Much like the stock market, the Chicago-area real estate market seems caught in rewind mode, with home prices now similar to what they were back in 2001.

It’s as if the boom, and the subsequent bust, never happened — that is, if you’ve owned property this whole time. If you were unfortunate enough to buy mid-decade at the top of the market, you may be out tens of thousands of dollars if you sell now. Recent data from the Case-Shiller Home Price Index shows that Chicago single-family home prices have plunged 29% from their peak in September 2006, while condo prices have dropped 26.3% from their high point in September 2007.

This means condo prices are now back to where they stood in the summer of 2001… before September 11th, when the Dow was hovering around 11,000 (it’s at 10,172 today) and Barack Obama was a little-known Illinois State Senator from the 13th District. Chicago’s single family home prices, meanwhile, are now back at spring 2002 levels.

As a Chicago homeowner, it’s hard not to get a little depressed. On the other hand, you’d probably be in the same boat if you’d skipped buying a house and invested your cash in the stock market instead.

But what about the next 10 years? Today’s buyers now have a chance to buy Chicago-area property at prices unseen for the last decade. Where will prices stand in 2020? Will we look back at 2010 as the bottom of the market, and spend the next 10 years griping that we should have bought then, when homes were affordable?

Written by Sue Fox // 4 Comments »

Chicago for sale: Lakeview townhouses from $400,000 to $700,000

filed under: Buyers, Chicago home prices, Lakeview, Market conditions posted on May 22nd, 2010

TOWNHOME, SWEET TOWNHOME: This 1600-square-foot townhouse at Fremont Place in Lakeview has a woodburning fireplace and newly refinished floors.

TOWNHOME, SWEET TOWNHOME: This 1600-square-foot townhouse at Fremont Place in Lakeview has a woodburning fireplace and newly refinished floors.

There are more than four dozen Lakeview townhouses with at least 3 bedrooms to choose from right now, a wide selection of homes ranging from the drab to the dazzling. There are even a handful of units priced in the low $300,00 range.

But for most buyers, a basic entry-level townhouse built on a narrow footprint (perhaps 14-feet wide), can be had for about $400,000 to $450,ooo in Lakeview. There are several homes for sale at Fremont Place, a courtyard development built in 1993 just south of Irving Park Road. For instance, 3910 N Fremont Unit A, priced at $439,000, is an end-unit 3 bedroom, 2 bath townhouse with a renovated kitchen and baths, a woodburning fireplace, two outdoor patios and garage parking. But at this price point, Lakeview townhomes are not huge; they are usually around 1600 to 1700 square feet and can feel a bit tight inside.

So what can a buyer expect in the $500,000 range? Basically, a larger, newer townhome with more amenities, such as a fourth floor, a roof deck and a two-car garage. Such is 2928 N Wood Unit D, which also features floor-to-ceiling windows, high ceilings, a double oven and breakfast bar, surround sound and a custom home theater on the fourth floor. It’s priced at $514,900, and a few others are also for sale in this 110-unit development built in 2001.

THE HIGH END: This highly upgraded townhouse on Surt Street, priced at $699,000, was already under contract within a month.

THE HIGH END: This highly upgraded townhouse on Surf Street, priced at $699,000, was already under contract within a month.

At the upper end of the Lakeview townhouse spectrum are highly upgraded units that live more like single-family homes. There are two units currently for sale at Columbia Place on Surf Street, next to a new city park. Listed at $699,000, 1727 W Surf Street is a 3 bedroom plus den, 2 and a half bath home with a gourmet kitchen and walk-in pantry, upgraded appliances, family room, separate living room and dining room, natural stone baths, surround sound, a roof deck, front yard and balcony, and an attached two-car garage.

If you’re wondering why buyers would choose an attached townhome when they could afford a single-family house, remember that Lakeview is one of Chicago’s most desirable neighborhoods (where a comparable single-family house would cost over $1 million). The townhome on Surf, which is located in the well-regarded Burley Elementary school district, is already under contract after just one month on the market.

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Delinquent mortgages on the rise; more Chicago foreclosures ahead

filed under: Buyers, Chicago home prices, Foreclosures, Illinois unemployment, Market conditions posted on May 15th, 2010

UPTOWN UPSIDE: This 1-bedroom condo, located at 811 W Eastwood, is a foreclosure priced at $143,900. In recent years many of these units have sold for $160,000 or higher.

UPTOWN UPSIDE: Among the foreclosed properties now for sale is a 1-bedroom condo for $143,900 in this building, located at 811 W Eastwood. In recent years many of these units have sold for $160,000 or higher.

Looking to buy a Chicago home in foreclosure? Your selection keeps getting better and better, as more homeowners continue to default on their loans.

Take a look at the recent first-quarter report from Freddie Mac, the giant government-supported mortgage company. It posted a $6.7 billion loss and asked for an additional $10.6 billion (from taxpayers!) to help stabilize its finances. The federal government has already poured $130 billion into both Freddie Mac and its sister company Fannie Mae to keep the country’s mortgage market breathing.

Unfortunately, all this government largess doesn’t seem to be stopping the tidal wave of foreclosures. Illinois — and its largest housing market, Chicago — are some of the hardest-hit regions in the country. Chicago homeowners lost 3,500 homes to foreclosure and the city had roughly 365,000 underwater borrowers in the first quarter of 2010, the fifth-highest among the nation’s major cities, according to to a recent report by CoreLogic, a firm that analyzes real estate data.

In the meantime, Freddie Mac’s inventory of foreclosed homes has soared from about 29,000 units in March 2009 to almost 54,000 this year, and its non-performing assets have nearly doubled.

This is an ominous sign for Chicago homeowners, many of whom are still struggling to afford their mortgage payments amid 11.5% unemployment in Illinois. Even those homeowners who can pay the bills are indirectly hurt, as local housing prices continue to wilt under pressure from waves of foreclosed properties.

When will it end? No time soon, according to Freddie Mac. The company forecasts rising losses throughout 2010.

Written by Sue Fox // 1 Comment »

Chicago for sale: Great houses for under $500,000 in Lincoln Square

filed under: Andersonville, Buyers, Chicago home prices, Edgewater, Lincoln Square posted on May 11th, 2010

A HOUSE FOR THE PRICE OF A CONDO: This adorable turn-of-the-century home in the Bowmanville section of Lincoln Square is now priced at $389,000.

A HOUSE FOR THE PRICE OF A CONDO: This adorable turn-of-the-century home in the Bowmanville section of Lincoln Square is now priced at $389,000. Chris Sears of Keller Williams has the listing.

The buyer’s market lives on! Four years into Chicago’s real estate slump, I’m now seeing a handful of historic single-family homes, in generally good condition, on the market in desirable neighborhoods like Lincoln Square, Edgewater and even Andersonville for less than $500,000.

I have some new buyers looking in Lincoln Square, particularly the Bowmanville area north of Foster, between Damen and Western avenues. This is a sweet little pocket of century-old A-frame houses, many of them with porches out front and decks in the backyard.

There are several affordable 3-bedroom homes currently for sale there, including 2209 W Farragut, a handsome house with hardwood floors and an updated kitchen and bath, now priced at $389,000. This house has been on the market since the beginning of February, when it was priced at $435,000.

Then there is 2139 W Berwyn, a pretty Cape Cod house whose roof and mechanicals have been updated and interior has been renovated, including a full finished basement with a family room. Just to give you an idea of how much prices have fallen in recent years, this 3-bedroom home was listed at $589,000 in the summer of 2008. It’s been on and off the market since then, and is now priced at $459,000.

A few of the Lincoln Square houses look like they’ll require a good bit of work, such as 2575 W Argyle, a 4-bedroom house listed just under $400,000. But this house makes up for it with a huge 45 x 160-foot lot, which is 20 feet wider and 35 feet deeper than the standard Chicago lot.

With interest rates still hovering around the 5 to 5.25% mark, this a great time for buyers to take a step up from condo (or apartment) living and find an affordable house with the extra space, grassy yard and a garage that they’ve been missing. Just in time for a summer barbecue!

Written by Sue Fox // Please leave a comment.

Chicago foreclosures still rising steadily; 3,500 homes lost citywide in Q1

filed under: Andersonville, Buyers, Chicago home prices, Edgewater, Foreclosures, Lakeview, Lincoln Square, Market conditions, Rogers Park, Uptown posted on May 6th, 2010

EVEN IN EDGEWATER: Foreclosures are starting to creep into stable neighborhoods, driving down Chicago home prices. This bank-owned foreclosure, a 3-bedroom Victorian at 1248 W Ardmore that used to be a bed & breakfast,

EVEN IN EDGEWATER: Foreclosures are starting to creep into stable Chicago neighborhoods, driving down home prices. This bank-owned foreclosure, a 3-bedroom Victorian at 1248 W Ardmore that used to be a bed & breakfast, is now listed at $497,999. Its former owner paid $720,000 in early 2007.

While home sales have jumped significantly in the Chicago area, another less hopeful housing indicator — home foreclosures — is also on the rise. During the first quarter, more Chicago-area homeowners lost their homes to foreclosure than in any other quarter in the past five years.

Nearly 3,500 homes in the city of Chicago went through a court-ordered auction, the final step in a foreclosure, and 95 percent of them were reclaimed by lenders, according to a recent report by the Woodstock Institute, a Chicago-based think tank. In the six-county Chicago region as a whole, 9,302 homes went to auction during the first quarter.

It looks like the Obama administration’s Making Home Affordable program and other government efforts to stem the foreclosure crisis aren’t working. Loan modification often fails for people who simply can’t afford their homes. Illinois, one of the hardest-hit states in terms of foreclosures, now faces 11.7% unemployment — far worse than the national average. If people are out of work, it becomes pretty hard for them to pay their mortgages.

So what does all this portend for our local market? I see two trends that I expect to continue in Chicago through 2010 and perhaps beyond:

1) The surge in foreclosed homes will continue to push Chicago home prices down across the board, particularly in neighborhoods with lots of distressed properties. In the North side neighborhoods I cover, this would mean falling prices in Rogers Park, Albany Park and perhaps Uptown and Edgewater, and continuing pressure that holds down prices in more affluent areas like Lakeview, Lincoln Square and Andersonville.

2) The foreclosures — at least the ones in decent shape — will present an attractive buying opportunity for both first-time buyers who couldn’t afford a home in years past, and investors who are taking advantage of the bargain prices. I’m even seeing investors who buy foreclosed houses and condos, spruce them up a little, and then flip them back onto the market. Often the end buyer, who still gets a deal on the price, is a first-time home buyer.

Written by Sue Fox // Please leave a comment.

Chicago home sales skyrocket 50% in March

filed under: Buyers, Chicago home prices, Chicago home sales, First-time buyers, Foreclosures, Lincoln Square, Market conditions, Tax credits posted on April 29th, 2010

The home buyer’s tax credit — which expires tomorrow — has certainly helped light a fire under Chicago home buyers. Home sales shot up again in March compared to March 2009, making this the seventh month in a row of year-over-year gains.

THREE YEARS NEW: After three years on the market, this new luxury home in Lincoln Square sold in March for $1.2 million. It was priced at nearly $1.6 million in 2007.

THREE YEARS NEW: After three years on the market, this new luxury home in Lincoln Square finally sold in March for $1.2 million. It was priced at nearly $1.6 million in 2007.

In the city of Chicago, March total home sales (single-family and condos) rose 49.7% to 1,814 sales compared to 1,212 sales a year ago, according to the Illinois Association of Realtors. For the entire first quarter, home sales were also up considerably, by 41.6% citywide.

But prices have continues to slip. Chicago’s median home price in March was $209,000, a 4.6% drop compared to $219,000 last year.

Dr. Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory (REAL) of the University of Illinois, pointed to the latest figures as evidence of an “upward trend.” He told the Realtor’s association that “there is increasing evidence that the housing market is stabilizing; in many parts of the country sales have increased but prices remain stubborn. In places where there have been increases, they are modest; there is no doubt that the downward pressure on prices can be traced to the volume of distressed properties on the market.”

Meanwhile, foreclosures have continued to climb across Chicago and the metropolitan region. Nearly 3,500 Chicago homes went through a court-ordered auction in the first quarter, and 95% of them were acquired by the bank, according to a story in today’s Chicago Tribune.

This flood of bank-owned homes, which I’m now seeing popping up even in trendy neighborhoods like Lakeview and Lincoln Park, is depressing home prices across the board. But at last, homes are finally changing hands again at a healthy pace, and some stability is returning to our Chicago market.

Written by Sue Fox // 1 Comment »

In Chicago, buying a home now beats renting

filed under: Buyers, Chicago home prices, First-time buyers, Market conditions posted on April 22nd, 2010

CHICAGO ON SALE: A new report on home prices shows that buying is a better financial deal than renting in Chicago.

CHICAGO ON SALE: A new report on home prices shows that buying is a better bargain than renting in Chicago. Home buyers seem to realize this, if the surge in recent sales is any indication.

Looks like home prices in Chicago have declined to the point that buying is now a better financial deal than renting, according to a front-page story in the New York Times that analyzed home prices in various cities.

“In some once bubbly markets, prices have fallen so far that buying a home appears to be a bargain,” the newspaper reported (read the full story here). Chicago — along with New York, Los Angeles, Houston, Dallas, Atlanta and south Florida — is among the major metropolitan areas where buying now makes more economic sense than renting a similar home.

A simple method for comparing buying vs. renting is called the rent ratio: the price of a home divided by the annual cost of renting a similar one. If the rent ratio falls below 20, buying becomes a better option. In Chicago, the rent ratio is now just 15.9, according to the Times analysis, lower than most of the other major cities surveyed. (In fact, only a handful of cities have ratios below 14, including such hard-hit cities as Las Vegas, Detroit and Pittsburgh.)

“In most markets, you’re better off buying,” Thomas Lys, an accounting professor at Northwestern, told the Times. “But once the ratio gets to 25 or 30,I’d say, ‘You know what? There may be a bubble.'”

In Chicago, whatever housing bubble we saw here never inflated as fast or as far as what coastal cities like Los Angeles or Miami experienced. Still, prices have fallen considerably. Chicago’s rent ratio was 24.3 in 2005.

This report backs up what Chicago real estate agents have been seeing on the ground: Plenty of smart buyers snapping up properties at great prices, and locking in low interest rates to boot.

Written by Sue Fox // Please leave a comment.

Under $200,000 in Chicago? The 2-bedroom condo hunt moves north

filed under: Buyers, Chicago home prices, First-time buyers posted on April 5th, 2010

A HAPPY MEDIUM: Rather than give up the Andersonville area they love, my buyers chose a large1-bedroom condo there instead of a 2-bedroom further north to stick to their $200,000 price limit.

A HAPPY MEDIUM: Rather than give up the Andersonville area they love, my buyers chose a large 1-bedroom condo there instead of a 2-bedroom further north to stick to their $200,000 price limit.

For many first-time buyers on Chicago’s North Side, $200,000 seems to be a popular price point for their first home. Each year I have several clients — many of them renters in neighborhoods like Lakeview, Lincoln Park, Andersonville or Lincoln Square — who have been pre-approved for a mortgage and hope to find at least a 2-bedroom home.

So what can you get for $200,000 these days? The reality is, despite the downturn in Chicago home prices, most of the aforementioned neighborhoods will be well out of reach (at least for a 2-bedroom unit). Buyers will find themselves steadily drawn further north, to Uptown, Edgewater and Rogers Park, where prices are lower and there are more 2-bedroom condos available for $200,000 or less. (Even in Edgewater, though, there aren’t too many condos in this price range, unless you comb through the high-rises near the lake, where monthly assessments tend to be quite high.)

There are also neighborhoods further west, such as Albany Park or Irving Park, where 2-bedroom condos priced below $200,000 can be easily found.

But if you are determined to live in, say, Andersonville or Edgewater, there are certain compromises that buyers can make. In the last month, I’ve helped two sets of couples with their 2-bedroom condo search in these neighborhoods, and both came up with strategies for staying under $200,000 that involved some trade-offs.

One couple, who had lived in a rental apartment in Andersonville for several years, decided after seeing about a dozen 2-bedrooms in Uptown and Edgewater that their priority was staying in the neighborhood they loved. So they compromised on size and decided to check out 1-bedroom units that featured some kind of extra space, like a dining room or sunroom. Within a couple weeks, they found a sunny 1-bedroom condo in the heart of Andersonville that was actually bigger than some of the 2-bedrooms we’d seen, complete with a large living room and separate dining room, a good-sized kitchen, a laundry room (in-unit!) and a deck.

The other couple compromised in a different way, deciding to look at garden units that would still offer the 2-bedrooms they sought, but  would be slightly below ground. We’ve seen several “English gardens” in Edgewater, Andersonville, and Uptown, which are condos only two or three feet below grade that still offer plenty of light through the windows.

Both of these buyers have managed to stay just under $200,000. But if you really want a 2-bedroom condo in this price range, and you don’t want to consider a garden unit or a high-rise, I would suggest heading further north to Rogers Park. There are lots of newly-rehabbed condos — many of them with a second bathroom — at this price point, and Rogers Park is a cool lakeside neighborhood that’s easily accessible to downtown through the Red Line or the Metra.

Happy hunting!

Written by Sue Fox // Please leave a comment.