Sue Fox, @Properties. Direct 773.816.1788
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Archive for the 'Lakeview' Category
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.
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.
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.
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.
In what has become a seller’s nightmare — and a buyer’s dream — the median price of a Chicago two-flat has continued to plummet. And more buyers are taking notice, picking up these stalwart Chicago homes for a fraction of what they were worth a few years back.
I’ve written about this phenomenon before (see my Sept. 30, 2009 post, “The collapse of the Chicago two-flat”), but I keep seeing more sales data showing major price declines. Of the 47 multi-unit properties (mostly two-flats and three-flats) that closed last week in Chicago, the median price was just $80,100, according to Midwest Real Estate Data LLC. Two years ago that same week, 25 of these multi-unit buildings closed at a median price of $310,000.
That is a 75% price drop over just two years!!! Of course, the number of Chicago two-flats changing hands appears to have roughly doubled during that time, but that’s to be expected when prices have fallen so dramatically. What sane buyer wouldn’t want to own two units for $80,000?
Unfortunately for owners who bought their two-flats two to six years ago, they are now in very deep trouble. I’m seeing more and more of these buildings offered as short sales as they slide towards foreclosure, with owners who paid upwards of $500,000 now so far underwater that defaulting on their mortgage may be the only way out.
In Edgewater, 1672 W Edgewater Avenue is a fairly typical example. The owners bought it for $550,000 in June 2006. It looks like they intended to convert it to a single-family home (according to the MLS description) and they gutted the first floor and upgraded the heating and electric systems. A year ago, they put it on the market for $415,000 but it didn’t sell. It’s now listed as a short sale — which requires the lender’s approval — for $240,000.
This sad story has a flip side: It is now an excellent time to buy a Chicago two-flat. In Edgewater alone, I just counted 13 two-flats that are either foreclosures or short sales for $400,000 or less. In Andersonville, there are at least four that fit this description. Even in pricey Lakeview there are three, including a graystone two-flat in foreclosure, now priced at $284,000.
It’s becoming clear that the government’s Making Home Affordable program is failing to yank most struggling homeowners out of foreclosure. Lenders just aren’t modifying loans quickly enough — or on a permanent basis.
As of the end of November, more than 728,000 modifications were under way nationwide, but almost all were still in the trial period, according to the U.S. Treasury Department. Only 31,382 mortgages — about 4% — had their payments permanently reduced. Some analysts are now predicting we could see as many as four million foreclosures in 2010.
This is dreadful news for millions of families and the communities where they live. There is no question: Foreclosures hurt people, property values, cities, and the broader economic recovery. But for a handful of buyers who are willing to jump in, they also represent an opportunity to buy property they might not have otherwise been able to afford.
This year, I have unlocked the padlocked front doors to dozens, probably hundreds of foreclosed homes. There are boarded-up bungalows and chilly two-flats where the utilities were shut off months ago. Condo buildings whose developer went belly up before selling all the units. Single-family homes with children’s wallpaper still decorating the bedrooms. Half-renovated houses missing stoves and refrigerators and electrical outlets, where some investor started a rehab and then ran out of money. Deserted and now owned by a bank, some of these homes have also been damaged by water or mold.
Most of my buyers wind up passing on these homes. The price may be low, but they often require a lot of work. You need to be handy, or have money saved, or be willing to apply for an FHA 203K loan to rehab the place. But the opportunities are certainly there, and more are coming.
More than 9% of Chicago-area mortgages were 90 days or more delinquent in October, compared with 5% a year ago, according to First American CoreLogic. As mentioned in my previous posts, the foreclosure rate in Illinois doubled in the past year, and more than 8,500 homeowners received default notices last month.
If you are interested in purchasing a foreclosure, please give me a call. I can help you find a property that suits your needs, and I will refer you to capable lenders who can get the deal closed with a minimum of fuss. And if you act soon, you may qualify for a $6,500 or 8,000 home buyer tax credit.
About a year and a half ago, I had a buyer named Laura who wanted a 2-bedroom condo in Lakview for less than $300,000. She didn’t want to be in a highrise building or a garden unit, AND she insisted on having a parking space. All very reasonable requests… but in Lakeview at that price point, it was like hunting for a needle in a haystack. As I recall, there were only a handful of condos that fit the bill, and she bought one on Oakdale.
How times have changed! There are now 32 condos for sale in Lakeview that match Laura’s criteria (and this is excluding short sales, which I generally think are a waste of a buyer’s time because they so rarely close.) So what can you get these days for under $300K in one of the city’s most popular neighborhoods?
* For $240,000, there is a cute unit with exposed brick, an updated kitchen and bath, a large deck and rental parking across the street. It’s located at 3950 N Clarendon St. #3S, a top-floor condo in an FHA-approved building with 12 units.
* For $259,900, you can enjoy a great location off Roscoe and Southport. The 1st-floor unit at 1438 W Roscoe St #1 is a recent rehab with granite and stainless steel in the kitchen, a marble bath, custom paint and a parking space (paid for one year by the seller) a block away.
* For $279,900, there’s a funky vintage top-floor condo just blocks from the lake in Wrigleyville. This one is at 942 W Sheridan Rd. #3A, featuring a spacious layout, a separate dining room, a fireplace and a deck.
* For $289,900, check out a rare 2-bedroom loft at 1645 W School #309 in the 60657 Lofts building. This unit has high ceilings, lots of light, and a fabulous location right near the Whole Foods on Ashland. Parking is $20K extra, but this unit was originally priced at $329,900 in August, so it looks like its owners are rarin’ to go.
As summer draws to an end, we are seeing more large developers cut prices in an effort to spur sales. The latest example is an FHA-approved building at 2930 N Sheridan, a rehabbed tower that looks a bit drab from the outside. Sales here have been sluggish for two years, and this week the sales center is announcing substantial price cuts.
One-bedroom units now start at $209,900, rather than $249,900. Two-bedroom condos are $229,900 (a $40,000 drop) and three bedrooms can be had for $299,900 (a $50,000 cut).
A new three-bedroom condo in Lakeview for under $300,000? This really is a buyer’s market. Inside the building, the units are bright and modern. But they don’t have balconies, and the brownish mid-century facade outside doesn’t offer much curb appeal. Still, FHA approval means that buyers only have to put 3.5% down, and if they close before Nov. 30 first-time buyers can take advantage of the government’s $8000 tax credit.
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