Sue Fox, @Properties. Direct 773.816.1788
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Archive for the 'Edgewater' Category
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.
After falling amid an outcry over improper bank behavior, foreclosures are once again rising sharply in Chicago and Illinois as a whole.
Last week, RealtyTrac reported that foreclosure activity in the Chicago region jumped 34% from the third quarter of 2011. Notices of default, the first step in a foreclosure action, were filed against nearly 19,000 local homes.
Chicago, which has been one of the hardest-hit cities nationally in terms of foreclosures, is now doing much worse than the rest of the country — where foreclosure activity dropped 16% in the last year. Foreclosures are now at their lowest level nationwide in more than five years, according to RealtyTrac. In Illinois, however, foreclosures shot up 31% over last year.
The real estate website Zillow just started displaying information on homes that are in foreclosure but not yet for sale, and it showed 11,000 such condos and single-family houses in city of Chicago alone. Many of them are clustered in ravaged neighborhoods on the South side, but the distressed properties extend into even the city’s priciest zip codes as homeowners struggle to hold onto homes whose value has fallen about 30% in recent years.
According to RealtyTrac, it takes about two years on average for a lender to foreclose on a Chicago home, so a troubled address listed on Zillow could be a long way from being offered for sale. Still, look for increasing waves of foreclosures to hit the local market in 2013, a trend that could help hold down prices.
It’s an odd conundrum: Mortgage rates have never been lower and home prices have plunged, making 2012 an excellent time to buy property… And yet, there are so few places to choose from. Where have all the houses gone?
In Chicago, housing inventory is so low that many would-be buyers have grown frustrated with their search and decided to wait until the spring. As of October 1, there were 37,619 condos and single-family houses for sale, a 17% decrease over a year ago. In fact, Chicago’s home inventory has been steadily falling for years.
Here are the October figures for the last few years, according to data kept by the ITT Technical Institute:
October 2011 45,162 homes for sale
October 2010 51,265 homes for sale
October 2009 53,949 homes for sale
October 2008 60,169 homes for sale
October 2007 67,479 homes for sale
The limited selection has meant long and aggravating searches for buyers eager to find a home. Making matters worse (at least for ordinary buyers who want to live in the home without doing major renovations) many of the houses and condos on the market are distressed properties that need work. When a well-kept home in a desirable neighborhood does hit the market, it often sells quickly and sometimes attracts multiple offers.
This summer, I helped one couple find a 4-bedroom house in Edgewater, in a good school district they had targeted for their children. But the search took six months, and they made offers on at least two or three other homes that went to other buyers. They were very motivated to buy, but the problem was there were hardly any houses to choose from! Another couple I worked with, who were seeking a 3-bedroom condo in Andersonville, Edgewater or Uptown, ran into the same problem and finally decided to keep renting until the spring, when more properties hit the market.
I can think of at least three reasons for the tight inventory: Many Chicago homeowners are still underwater and can’t afford to sell, banks who own foreclosed homes have been holding some of their inventory off the market so as not to further depress prices, and thousands of would-be sellers simply don’t want to list their homes now — at the bottom of the market — when prices look like they will be higher next year or the year after.
Serious Chicago buyers know that they need to be ready to pounce when they see the home they want, before it’s gone. And for sellers, the lack of quality inventory gives them a chance to finally sell their homes, especially if they are in good condition and priced competitively.
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.
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!
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!
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.
Chicago two-flats are back… as a good investment option, that is. For much of the last decade, their price had climbed so high as to no longer make sense for many owners. As I had warned in previous posts, it is ludicrous to pay $500,000 or $600,000 (or more) for a two-flat when each unit will only rent for $1,200 or $1,300 a month.
And once the recession hit, this obvious math finally caught up with many two-flat owners. Suddenly people were scrambling to unload these properties, and the price of multi-unit buildings plunged. Now that they are priced more realistically — meaning that if an owner were to rent out both units, it would come close to covering the mortgage and other expenses — Chicago two-flats are suddenly in demand once more.
In Edgewater, for instance, a classic red brick two-flat located at 1300 W Norwood Street recently sold for $370,500. The math here makes sense: Assuming the buyer put down 10% and got a 30-year loan at a 4.5% interest rate, the monthly payment (including property taxes and insurance) would be about $2,525. Each unit has 3 bedrooms and a bath, which in Edgewater would rent for around $1,400 per month, giving the owner $2,800 in income. That’s enough to cover the expenses… which indicates that this purchase is a sound investment. (And in my example, the buyer didn’t even put down 20 percent! The numbers would work even better if he/she had.)
What wouldn’t make any sense at all is paying $600,000 for the same property, which is where it was originally priced in January 2010. The seller had to reduce the price seven times over the next year, finally settling at $429,000. Still, this two-flat closed for nearly $60,000 less when it sold in April 2011.
In Chicago, people sometimes buy two-flats with the intention of converting them into a single-family house. But even then, the property must be obtained for a reasonable price to make financial sense. These days, dozens of affordable two-flats can be found in appealing neighborhoods. I just searched the MLS in four North side neighborhoods relatively close to the lake — Edgewater, Uptown, Lincoln Square and North Center — and found 29 two-flats for sale from $149,000 (a foreclosure in Lincoln Square) to $400,000.
Is it time to jump back into the two-flat market? If the numbers make sense, I say yes.
For a building that is only four years old, Catalpa Gardens has seen more than its fair share of trouble. This colorful complex had the misfortune to be built and unveiled to the public just as the Chicago condo market was beginning a steep decline. This plunge not only caught off guard the developers — who were forced to slash their asking prices by as much as $150,000 on some 2-bedroom units — but it pretty much trapped dozens of buyers who purchased their units here before the massive price cuts in 2009.
I’ve written about the problems here before; in fact, in late 2009 I warned potential buyers to beware of this 126-unit building, a virtual ticking time bomb since so many owners were deeply underwater. Now we are seeing the fallout.
Over the past year, there have been 12 sales in the building, including 9 short sales. One was a foreclosure, and the last two were the developer’s “liquidation” of the final units. One of those, a sixth-floor unit with 2 bedrooms, 2 baths and garage parking, sold for $230,000 — the highest price in the building all year. It had previously been priced as high as $417,301 (with parking an additional $31,900.)
But the real losers in the Catalpa Gardens debacle are the regular folks who paid top dollar for a new building whose value was sinking by the day. Like the owner of #703, who paid a whopping $439,661 for a 1200-square-foot 2-bedroom, 2-bath condo in the summer of 2008. The housing market was already crippled then, and a year later this owner was trying to get out. But Catalpa Gardens was in serious trouble, and unit #703 (priced at $399,900) did not sell. The owner was forced to cut the price seven times, to $189,000, before it finally sold as a short sale last spring.
That’s right. This poor homeowner owned the place for less than two years, sold it for an appalling 57% less than he paid for it, and destroyed his credit in a short sale. And consider the fate of a similar sixth-floor unit, #603, whose owner paid $435,061 in 2008. That one has been for sale now for almost two years, currently priced at $175,900. It’s also a short sale.
Today there are six units for sale at Catalpa Gardens, and five of them are short sales or foreclosures. The cheapest is a 1-bedroom, one-bath condo priced at $103,500. More distressed sales are certainly ahead for this star-crossed building, but prices are now so low that these units are beginning to seem like a deal.
I was going to write about my latest listing, a 2000-sq-ft luxury condo with three bedrooms, two baths, garage parking and a roof deck with a great view of the lake. But it’s already been snapped up by a buyer, after just a week on the market.
So what’s the secret? Yes, it was a lovely unit with plenty of space and high-end finishes, in a snazzy building built just a few years ago. But the reason is sold so quickly, which I see time and again in Chicago, is that it was priced right. My sellers were realistic, asking $359,000 for a unit they purchased new from the developer in 2006 for nearly $90,000 more.
No one likes to take such a loss. But consider the fate of two similar luxury units in the same little lakeside stretch of Edgewater, just south of Loyola: One condo, at 5722 N Winthrop #3S, was on the market for a tragic 1,134 days. The price started at a lofty $489,500 and finally fell to… $359,000. But it didn’t sell. The owner, probably beaten down by three years of relentless price reductions, finally gave up and took it off the market a month ago. Another similar condo, at 6121 N Winthrop #2N, was originally priced at $359,000 in January, and it went under contract in less than two months.
So when it came time to list their unit, my sellers carefully considered the recent comps, listened to my take on market trends and priced their unit accordingly. Within a week, we had a buyer!
And that is really the point. What good is listing your home if you don’t sell it? We’re now seeing thousands of Chicago home sellers each year that — despite months on the market and multiple price cuts — ultimately fail to attract buyers. If you price your home correctly, you needn’t be one of them.
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