Sue Fox, @Properties. Direct 773.816.1788
Subscribe to Site
- FHA loans
- Market conditions
- Tax credits
Real Estate radio
Archive for the 'Lincoln Square' Category
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!
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.
April 2010 was one of the busiest months I’ve ever seen as a realtor! Even though the government’s home buyer tax credits (in one form or another) have been in place for more than a year, there were plenty of Chicago home buyers who waited until the last minute to buy.
April 30 was the deadline for signing a home purchase contract; buyers now have until June 30 to close the deal.
I had four different buyers or sellers go under contract in the last 10 days of April alone. In one deal, the buyer made an offer on my seller’s Lincoln Square condo around 9 pm on April 29. Her realtor and I negotiated the deal until slightly after midnight, and everyone signed the contract the next morning… thereby just making the April 30 deadline. Whew!
Plenty of other real estate agents in my office, and across Chicago, witnessed the same eleventh-hour mania. Now hopefully we can all get the inspections, attorney review periods, and mortgage loans completed in time to close by June 30! Expect a similar frenzy at title companies in June as everyone piles in to close before the deadline.
We should see healthy home sales throughout the Chicago region for April, just like the 50% leap over the previous year we witnessed in March. But now that the government’s home-buying stimulus is a thing of the past, the question on everyone’s mind is… Now what?
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.
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.
This week, my sellers finally closed on the sale of their Lincoln Square condo. I say finally because in this case, unfortunately, the couple who was buying the condo ran into some trouble getting an FHA loan. Everything seemed fine when they made an offer in October, but their first lender — A&N Mortgage — could not get the deal done.
We even gave the buyers an extra month to try to secure their loan. But despite what appeared to be solid jobs, good credit and hard work on the part of their loan officer, the loan was ultimately denied. The property fell out of contract and my sellers had to put it back on the market in January.
But wait! These buyers (and their realtor) did not give up. The realtor referred them to another lender — Bank of America, this time — and somehow the BofA mortgage sales manager Tammy Hajjar managed to get their FHA loan approved and closed six weeks later. Same buyers, same jobs, same down payment, same property … but a totally different outcome.
The difference in mortgage lenders, Hajjar said later, is twofold: how thoroughly the lender assembles the loan file (the front end of the process) and the access she/he has to an underwriter (the back end). “There is no room for a lack of detail these days,” she said. “You need someone who is thorough enough on the front side to really submit a good application and financial statements.”
At the same time, large banks like Bank of America, Chase, Wells Fargo and Citibank have in-house underwriters who work for them, so their mortgage lenders can quickly get questions answered. A broker like A&N Mortgage, Hajjar explained, has to “go through an extra step” of submitting the loan to an outside underwriter. That adds another level of interpretation to the loan file — and another place the process could potentially go awry.
This particular condo deal was a stark example of why it’s so important to choose an experienced lender with a track record of getting deals closed. It’s not all about getting the best interest rate (although, of course, this helps!) But many lenders offer comparable rates, and at the end of the day the interest rate is irrelevant if you can’t close the deal.
A good lender will patiently explain loan products and fees to prospective buyers and identify any red flags they see up front. Securing a loan entails crossing many little hurdles along the way, from the appraisal to underwriting, and an experienced lender will be able to navigate his/her way through them. One of the best ways to find a good lender is actually to ask your realtor, because realtors work with lenders all the time and after a while, most of us develop a go-to list of a couple great lenders that we know can get that loan closed.
I regularly refer buyers to a few good lenders I have worked with for years without a hitch. (I get nothing in return for the referral, by the way — except the knowledge that the loan is going to close.) Buyers should make sure their lender knows the business and has a solid record of closing deals, because it could mean the difference between scrapping the deal or moving into your new home.
This modern 2-bedroom, 2-bath condo was quickly snapped up by buyers when I listed it in the fall. It was only on the market for about three weeks before it went under contract. But the buyers had trouble getting their loan, and the deal eventually fell through.
Now this Lincoln Square condo, a duplex with two floors of living space, is back on the market. It’s a great unit with exposed brick, hardwood floors, a beautiful kitchen, lots of light and a family room downstairs. Because it’s an end unit, it’s especially quiet.
Located at 2250 W Argyle, it’s just blocks from Winnemac Park or the restaurants and boutiques of Andersonville and Lincoln Square. The 10-unit building is professionally managed and well-run, and there’s a beautiful backyard for relaxation. My sellers loved living here!
And if you’re a first-time buyer, there’s still time to take advantage of the $8,000 tax credit. This government perk is set to expire on April 30.
If you’re interested in seeing this property, or any other Lincoln Square condos, please give me a call at 773-816-1788. Thanks!
Lincoln Square, one of the more desirable neighborhoods on the North Side, is now growing more affordable as well. Prices of single-family houses here have tumbled considerably in the last year, making the area a great buy for bargain-hunters.
In June 2008, for example, six houses sold in Lincoln Square, with a median price of $664,500. This June, eight houses found buyers, but the median price had fallen to $532,500 — a 20% drop in just a year.
I think part of the problem was the rash of small-time investors who started buying up old A-frame houses here in 2007 and 2008. Some were contractors, some were real estate agents, some were just starry-eyed dreamers, but they all shared a hope of fixing and flipping these houses for a tidy profit, particularly in the Bowmanville area north of Foster and west of Damen.
Now, unfortunately, Lincoln Square is speckled with lovely, newly-rehabbed houses that can’t find buyers. There’s 2130 W Summerdale, which has been on the market since March, for $645,900. There’s 2110 W Berwyn, also for sale since March, now listed at $650,000. Or 5324 N Leavitt, which has been on and off the market since 2007 and is now a short sale for $650,000. Or 5148 N Oakley, which has been on the market all year and is now priced at $539,900.
All of these homes have endured multiple price reductions of tens of thousands of dollars, sometimes even $100,000. And yet here it is, heading into our sluggish winter season, and they remain unsold.
- 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