Sue Fox, @Properties. Direct 773.816.1788
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Archive for the 'Chicago home sales' Category
A well-known Chicago developer just agreed to pay $26 million for a large chunk of land just north of Roosevelt Road, on the east side of the river. A new brewery, Motor Row Brewing, opened its doors in January on the 2300 block of South Michigan. Hundreds of new apartments are being built along South Clark, the British School of Chicago is designing a new South Loop campus, and home prices are steadily recovering — in some cases almost reaching peak levels last seen six years ago.
Is the South Loop back in the game?
Just three years ago, the South Loop was awash in cheap condos whose owners were so deeply underwater that they were going into foreclosure, trying to sell them short, or simply renting them out and waiting until prices recovered. Entire buildings had slipped from bright “grand openings” with shiny sales centers into a troubled half-lives as rental buildings because so few owners had stuck around to live there after the market crashed. When I would go to show condos in the South Loop, some buildings had so many units for rent and sale that they’d designated a special room for dozens of lockboxes filled with keys, so REALTORS® could let themselves in.
At the bottom of the market — which turned out to be the summer of 2012 for the South Loop — median sales prices in two of the area’s main zip codes, 60616 and 60605, had plunged about 40 to 50% over the peak in 2009.
What a mess. But the turnaround has been sharp, and now prices are within 13 to 17% of their previous highs. In other words, the South Loop is well on the road to recovery.
In practical terms, this means that the median home price is now $298,525 in zip code 60616 and $361,000 in 60605. Which means that an investment in the South Loop is now looking like less of a gamble and more of a sure thing. Sellers will finally be able to unload properties bought at the top of the market, and buyers will find a neighborhood whose restaurant, bar and retail scene is growing hotter by the day.
The new year is off to a bitterly cold start, with temps hitting 5 below zero this morning and Chicago public schools closed for the second day in a row. While the brutal weather is never ideal for house-hunting, Chicago’s real estate market nonetheless is on the upswing, with prices increasing a whopping 15% in 2014, according to the latest sales figures from the Illinois Assn. of Realtors.
Home price appreciation in the city was more than double that in the state of Illinois as a whole, where prices rose 6.9% from November 2013 to November 2104. But fewer homes were changing hands — a mark of the low inventory that continues to flummox buyers who enter the market with high hopes only to discover how few homes are actually for sale.
“As we round out the year, higher median sales prices and low inventory continue to be the market pattern,” said Hugh Rider, president of the Chicago Assn. of Realtors.
Home sales in Chicago dropped 11.5% over the past year, and the scarcity of homes listed for sale helped push up prices. The median home price increased to $230,000 in November, the latest month for which data is available.
Some analysts also said that a spate of freezing weather in November (which has gotten even worse in January!) was to blame for driving down sales. It was the state’s “fourth-coldest November on record,” pointed out Geoffrey Hewings, director of the Regional Economics Applications Lab at the University of Illinois. “While prices continue to improve, the sales forecast for the next three months indicates declines,” he said. Foreclosures sales are also on the decline, leading to fewer investor purchases.
All of which points to 2015 as a bright year for home sellers, who may be able to finally sell their home at an acceptable price — which for most people means they won’t have to bring any money to closing. If the Chicago market continues to recover, more and more fortunate sellers could even reap a profit.
I recently represented a buyer who was looking for a condo in Edgewater. We found a good option, and even though my buyer made a cash offer within a few thousand dollars of the asking price, the seller’s agent kept insisting that there was “a great deal of interest” in this property and that we’d better come up to list price or it would be gone. But the days went by, and despite the alleged tide of interest, no one else actually emerged with a better offer. The seller eventually accepted my buyer’s offer and we are scheduled to close shortly.
A year ago, I wouldn’t have been surprised if, in fact, there were at least 2 or 3 other interested buyers. Inventory was quite tight as sellers held off listing their homes, hoping for prices to climb — and they did. Chicago home prices jumped dramatically in 2013, by more than 11%, and multiple-offer situations became quite common.
But in the last few months, buyers again seem to be gaining advantage as inventory increases. The number of homes on the market is now up more than 5% over last fall, according to MLS data. And new listings have increased each month since March.
This means we are now close to a balanced market in Chicago, in which supply and demand meet in the middle and neither buyers nor sellers have the upper hand. There is now almost a 5-month supply of homes on the market, and most experts consider a 6-month supply to be the critical balance point.
So if you weren’t able to find the home of your dreams this year, don’t give up! A bigger selection of homes for sale, and possibly a slowdown in prices, may be ahead in 2015.
A pair of new statistics caught my eye this week, both suggesting that the era of rock-bottom real estate in Chicago is rapidly becoming a thing of the past.
First, the number of local homes (in the Chicago-Naperville-Joilet metro area) in foreclosure dropped 31.3% over the same time last year, according to the data firm CoreLogic. This stands to reason: With home prices climbing throughout the year, homeowners now stand a better chance of being able to sell or refinance their homes — instead of defaulting on their mortgages.
At the same time, thousands of cheap Chicago homes in need of repair — many of them foreclosures or short sales — are quickly being snapped up by investors, who usually pay cash. They are fixing them up (with new kitchens, baths, finished basements and sometimes new roofs and mechanical systems) and popping them back onto the market again just a few months later. And these renovated homes are selling quickly to buyers who don’t want to (or can’t afford to) do all that work themselves.
There were 2,235 single-family houses that were sold and then sold again within six months in the Chicago area from January to September, according to a new Realty Trac report, more than double the 1,086 homes flipped in the same period in 2012. This doesn’t even include the homes that took a bit longer than six months to renovate and sell.
For all the Chicago home buyers out there who were waiting for the bottom, it has arrived. In fact, we seem to have hit it sometime late last year, as the spring market here rebounded with a fury. Now, as the summer season winds down, we can clearly see that home prices are up substantially, inventory is still quite low, and Chicago real estate is selling more quickly than it has in many years.
What’s a buyer to do? First, it’s time to recognize that the market has fundamentally changed. No longer can you see a well-kept property in a desirable area like Lakeview or Lincoln Park or Bucktown, throw out a lowball offer and expect to get a deal. In most cases, you won’t even get a call back. The home will be gone, sold to another buyer, oftentimes in a matter of days at a price close to the asking price. This scenario, meanwhile, is spreading to other less-central, less-gentrified neighborhoods that aren’t considered as hot.
So, if you are a serious buyer, you must get your ducks in a row. Decide early on which neighborhoods you would like to live in, because you will need a disciplined focus — not just a general preference for “anywhere on the North side” or “somewhere near an L stop” — in order to jump on good listings as soon as they hit the market. Get pre-approved for a loan if you need one, or prepare to provide proof of funds if you plan to pay cash. And then, get to know the current market.
For example, in June, Chicago home prices surged 17.5% when compared to the previous June, and sales were up 12.5%. The average time a home was on the market, meanwhile, fell 32.9% to just 51 days.
And the market only grew hotter as the summer wore on. By July, the median price was $250,000 — up 25% from the previous July when it was $200,000. Sales were up 31.1% over the past year. Average market time dropped to 48 days.
“The market is starting to come together, especially in the condo arena that was hard-hit across most areas of the city. That condos are moving at a strong pace now and prices are also increasing means that both buyers and sellers are feeling confident,” said Zeke Morris, president of the Chicago Association of Realtors.
As we head into the fall season, Chicago’s real estate market will inevitably slow down. The fall is a good time for potential buyers to start exploring the market, even though there won’t be a lot to choose from. There also won’t be as much competition from other buyers. You can go to open houses, check out some neighborhoods, get a sense of pricing.
My buyers who start their search in the fall or winter are the ones who are best prepared to find a good deal come spring, when sellers start to list their homes again. These buyers know the market quite well by that time, and they are ready to pounce when the right house comes along.
It’s getting hot out there! In the space of just a couple months, Chicago’s housing market has gone from listless to galloping — at least in many of the most popular Chicago neighborhoods such as the Loop, River North, Lincoln Park, Bucktown, Lakeview, Lincoln Square and Andersonville. The latest sales figures from the Illinois Assn. of Realtors just came out, showing that home prices in Chicago jumped 17% between May 2012 and May 2013.
Home sales — the number of properties trading hands — were even stronger, soaring 30% over last spring. In May 2012 there were 2,125 homes sold in Chicago, compared with 2,762 sales last month. Properties are also selling much faster; the average market time in Chicago is now less than two months.
If you’re thinking of buying a home this year or even next spring, it’s time to get serious about the search, because there isn’t much for sale and the best properties sell very quickly. “What is going on with this market?” I had a buyer ask me yesterday. “If I see something I like online, within a day or two it’s already gone.” Yep, that’s now the case in many hot neighborhoods. In Andersonville alone, I’ve been involved in three transactions in the last month where the home sold for list price or slightly under (1 to 2% less) within a week of hitting the market. And in one case in Lakeview, I had a buyer offer a bit more the asking price because we knew the home would attract multiple offers (it did, but my buyer won out.)
There is a supply problem right now in Chicago: not enough homes are being listed for sale, especially in the areas buyers prefer. In order to compete, buyers must be pre-approved for a loan (or, even better, pay cash) and be ready to jump on new listings as soon as they hit the market.
And sellers? Well, you are certainly better off now than you were a year ago. Your home will likely sell fester, and for more money, than it would have last summer. But keep in mind that prices citywide are still much lower than they were in 2006 and 2007. Still, Chicago sellers now have a good chance of attracting a buyer (or even multiple buyers) if they stage their home properly and price it fairly. Let me know if you need help!
Chicago’s housing market is rapidly turning a corner, with prices climbing briskly this spring as buyers jostle for quality homes amid a morass of foreclosures and short sales. The number of homes for sale — which was already low last year — has plunged even further, falling from 14,358 listings in the city in March 2012 to only 7,813 this March, according to the Chicago Tribune.
And by some estimates, more than half of the homes available are distressed properties. The lack of desirable homes is forcing buyers to move quickly when they see something they like, igniting a rash of multiple offers and slashing market times. It now takes an average of 70 days to sell a Chicago home, down about 25% from a year ago.
This is great news for sellers, who have had very little to cheer about for the last seven years. Finally buyers are buying again, driven by a sense of urgency. The median price of a Chicago home was $187,500 in March, up 9% from $172,000 a year earlier, according to data gathered by the Illinois Assn. of Realtors. Chicago condo prices also jumped 9.3% to a median of $235,000.
“It is an excellent time for sellers to move their homes quickly, if priced well in what’s fast become a thriving market,” said Zeke Morris, president of the Chicago Association of Realtors. “The city’s housing inventory in March was down 45 percent compared to the same time last year. Data tells us that buyers are taking advantage of this period when homes are still priced attractively and interest rates are low, concerned that it might not last.”
I just listed a condo in Andersonville, a large 1-bedroom home that had been recently rehabbed, and the first two buyers to see it both made offers. It sold within a week. And such success stories are no longer so unusual. Many properties — the ones in good condition and desirable neighborhoods — are now selling within days.
The spring of 2012 seems to mark the turning point for the Chicago housing market. We now have several months of solid data showing that home prices and sales are both on the rise, and the latest numbers from May suggest that the market is finally gaining strength.
In May, sales of single-family houses and condos soared almost 20% over the previous year, from 1,703 to 2,037 homes. It looks like buyers are snatching up mortgages with record-low interest rates (or simply paying cash) to take advantage of home prices that rival those last seen more than a decade ago. But prices, too, are now on the rise; the median sale price in May was $203,000, up 6.8% over last May.
Last week, I had a buyer getting ready to make an offer on a condo in Lakeview. She was reviewing comps I’d sent her about six weeks earlier, when we began looking in that area, and she had devised what seemed like a fair price. But wait! I ran the latest comps, which captured all the May and early June sales, and it was immediately clear that prices had already shot up. That’s how quickly this market is moving.
It’s been a relief for many sellers — those who priced their homes reasonably — to see how quickly they were able to sell this spring. Buyers are finally out in force, and they are sometimes getting into bidding wars for the most desirable places. If your home is still on the market this summer, it is likely priced too high. It’s time to take a closer look at the recent sales and adjust your price accordingly, before the inevitable fall slowdown comes.
In another hopeful sign for Chicago’s real estate market, the sales of downtown condos recently hit a two-year high. It seems as though buyers are finally starting to absorb the excess inventory that has shadowed the downtown market ever since the downturn, holding down prices and forcing some newer buildings to turn to renters.
In April, there were 360 condo sales pending in the downtown area, up 55% from a year earlier. While this is good news, prices have yet to recover in downtown Chicago, making this summer an especially good time to buy a condo in the heart of the city.
Over the past two years, according to MLS data, median prices for condos in the Loop have fallen almost 8%, from $352,500 to $325,000. Developers of many downtown condos have had to slash prices to attract interest. Interest rates, too, have dropped and are now at record lows — around 3.75% for a 30-year loan for people with the best credit and sizable down payments.
The combination of low prices and rock-bottom interest rates make this year the best time to buy a Chicago home in at least the last 12 years. Will prices downtown continue to slump, or are we at the bottom? We have seen a recent uptick in prices (and sales) citywide, suggesting that a recovery, however faint, may finally be taking hold.
The spring housing market has been very busy this year, with many homes going under contract quickly and multiple offers cropping up on some of the most desirable properties. Recent data from the Illinois Assn. of Realtors confirms that the Chicago market is finally gaining strength again after several years of steady declines.
In the city of Chicago, the median home price for April jumped 9.3% over that of the previous year, to $184,800. April home sales were also up significantly, rising 19.4% over this time last spring (which was kind of sluggish). Last April there were 1,466 single-family houses and condos sold, but this year the number shot up to 1,750. Chicago home prices and sales also increased in March over the prior year, though not as dramatically.
“With rents in the city of Chicago increasing, paired with a limited supply of rentals available, renters are reviewing their options,” said Bob Floss, president of the Chicago Assn. of Realtors. “Historically low interest rates and great opportunities in the market are compelling to both first-time and move-up buyers looking to spend their dollars wisely and own their own home.”
I have seen a lot of activity this spring, from first-time buyers finally ready to jump into the market to investors paying cash to snap up distressed properties to families seeking to move into a larger home. There have been more than a few bidding wars, particularly on single-family houses in desirable locations. The market finally seems to be finding its footing. But what I don’t see is buyers — who are without exception looking for a good deal — bothering with homes that are obviously overpriced.
If you are looking to buy a Chicago-area home this year, keep in mind that updated properties in nice neighborhoods tend to attract a lot of interest, and if they are well-priced they could sell quickly. And if you are trying to sell a home, be sure it is competitively priced. Buyers are out there for homes that are properly priced — and you may sell faster than you imagined.
- Sizzle is back in the South Loop
- How to Buy a Chicago Foreclosure (as Supply Steadily Shrinks)
- Home prices jump 15% in 2014, but cold weather chills sales
- Lincoln Square on a Tear as Average House Price Tops $600,000
- More choices ahead for Chicago buyers as rally cools