Sue Fox, @Properties. Direct 773.816.1788
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Archive for the 'North Center' Category
The highest end of Chicago’s housing market took a beating in 2011, with sales of homes for $1 million or more falling 14.4% over the prior year. Only 539 such properties sold in 2011, compared with 630 homes in 2010.
Luxury condo sales were particularly hard hit, according to a recent story in Crain’s Chicago Business. Sales of million-dollar condos plunged 29% to 259 units, compared with 364 in 2010. The decline was partly attributed to the fact that no major new luxury condo developments were completed last year.
But the uncertain economy and troubled real estate market also certainly played a role. Many people are holding off on big-ticket purchases, and million-dollar homes are taking longer to sell. There’s a year-and-a-half supply of luxury homes sitting unsold throughout the Chicago area, Crain’s reported.
On the ground, I’m seeing some of these single-family homes endure multiple price reductions, occasionally to the point that their original asking price is sliced nearly in half. Often homes priced slightly above $1 million will sell for closer to $850,000 or $900,000. On the other hand, new or recently-built homes in hot school districts tend to sell quickly, with less of a discount off the asking price.
While home prices in most Chicago neighborhoods have been steadily falling, North Center — a desirable area with good schools and walkable neighborhoods like Roscoe Village — is bucking the trend. In 2011, the median price for a single-family house here rose to $805,000, a 7.5% increase over the year before.
More of these lovely houses are being sold, too. Sales of North Center houses soared almost 23% in 2011.
Condo prices in North Center, meanwhile, have held steady, ranging from a median of $365,000 to $370,000 over the past three years. Considering that condos in many other North Side areas have fallen at least 10-20% in value in recent years, North Center is definitely holding up quite well.
As the new year begins, I have two buyers looking in North Center, both young couples with children interested in homes available here in good elementary school districts such as Coonley, Bell and Audubon. And despite the relatively high median price of $805,000, you can definitely find an updated 3 or 4-bedroom house in North Center for considerably less money. More than 30 houses, many of them century-old homes that have been renovated, sold for $500,000 to $700,000 in 2011.
Little by little, Chicago developers are once again breaking ground on new houses on lots sprinkled across the North side, bringing dozens of high-end homes to neighborhoods like North Center (which includes Roscoe Village and Ravenswood), Lincoln Park, and Bucktown. In North Center, for example, 18 new homes were sold this year, another 16 are still on the market, while 4 more are under contract.
It looks like Chicago is now witnessing the Return of the Spec Builder — local developers who plan, design and build single-family houses without having a buyer lined up ahead of time. “While spec building never entirely dried up, it slowed significantly after the bust, leaving only a few developers with deep pockets still standing” said a recent story in Crain’s Chicago Business. “Now, smaller builders that waited for signs of life — and the availability of financing — are once again breaking ground on million-dollar-plus homes, confident that buyers will bite.”
In North Center, the new homes for sale range from a 3-bedroom frame house at 2440 W Fletcher St. for $649,900 (with delivery planned for 2012) to a 7-bedroom mini-mansion on an oversized lot at 1936 W Grace St. for $1,749,900 (that the builder promises to customize.) But the majority of the homes are 5-bedroom houses, many of them in the Coonley elementary school district, for $1 million to $1.3 million.
A typical offering is 4108 N Claremont Street, which has a large family room on the main floor, a second-floor laundry room, and a finished basement with a rec room and a wet bar. It has been on the market for only a week, priced at $1,199,000. Once finished, it will be just over 4,000-square feet, with amenities like radiant heat, steam showers and an outdoor fireplace.
While Chicago is just starting to see a glimmer of new construction, housing starts — a measure of how many homes builders are working on — are up sharply throughout the country. Today the Commerce Department reported that housing starts jumped 9.3% in November, the highest in the past 19 months. It seems that low interest rates for mortgages, as well as lower home prices, are propelling buyers back into the market for new houses.
In Chicago, developer Mike Barrett of Barrett Homes is building three spec homes, in Roscoe Village, west Lakeview and Bucktown. “I wouldn’t say the market is flush with prospective buyers,” he told Crain’s, “but the people who are looking seem to be well-qualified and have a pretty good idea of what they want in a home.”
With the spring home-buying season right around the corner, it’s time for all you home sellers out there to put your plan into action for 2012. Selling property in Chicago, especially a condo, has gotten quite difficult, and every year there are thousands of perfectly nice condos that linger on the market without attracting a buyer. Here are some important steps you can take to make sure yours isn’t one of them:
1) Time it right: Chicago has a seasonal real estate market, with most properties going under contract during the first half of the year. In Chicago, the “spring” home-buying season starts early. Every year, I start getting calls from potential buyers as soon as New’s Year’s Day — and this year, I’ve even gotten a bunch in December. Despite the cold (and often despite heavy snow), many Chicago buyers throw on their winter coats and go house-hunting throughout January and February. The buyer traffic picks up even more after the Super Bowl, usually held during the first week of February. So if you are a home seller, aim to get your home onto the market sometime between January and May. By the summertime months, home sales start to decline and they are usually much slower by the fall. Often, the properties that take ages to sell (and endure multiple price cuts) are the ones that hit the market in the second half of the year, when not many buyers are out looking.
2) Stage it right: Many Chicago condos tend to be rather small, or short on storage or closet space. But even the larger ones, with 3 or more bedrooms, could benefit from the eye of an experienced realtor or home stager. We know what people like. By and large, buyers want to see clean, open spaces, free of bulky furniture that eats up the space, crowded counter tops, and stuffed closets. In this market, your condo literally needs to look like a developer’s model — beautiful, spare, tasteful, spacious. Imagine the rooms in a Pottery Barn catalog. Now is the time to rent a storage space or haul all your extra stuff out to your parent’s basement. Please get rid of all clutter and unnecessary furniture, and this often means items you don’t perceive as clutter or furniture that seems necessary to you. When you are trying to sell your condo, you often must spend months living with half your stuff in storage, as inconvenient as that is. Believe me, buyers don’t want to see that desk you had to cram into your bedroom because there was no other place for it, or that huge square ottoman that’s taking up half your living room floor. Reduce, reduce, reduce. Your condo will be much more attractive to buyers and will sell more quickly.
3) Price it right!!! This is by far the most important thing. Even a ratty old condo that hits the market in early October will sell if the price is low enough. Assuming you have something much nicer to sell, it is still IMPERATIVE that you price it correctly, which means: In line with what similar condos in your neighborhood have actually SOLD for in recent months, or slightly lower. It does NOT mean: what you paid for it, or what you owe. Those numbers are not relevant to the current market. If you aren’t sure what your condo is worth today, please call me at 773-816-1788 and I’d be happy to prepare a Comparative Market Analysis and bring it over. Unfortunately for sellers, Chicago home prices have fallen back to levels last seen a decade ago, which means most people who bought their condo more recently are either underwater (owing more than the property is worth) or forced to sell for less than they paid. Buyers today are a hesitant bunch, with little sense of urgency or desire to compromise on their wish list, and they will skip right over properties that are overpriced.
One last thing: If you are underwater on your condo but still need to sell or rent it, please let me know. I can help walk you through the various options so that you can move on with your life!
At last, housing prices will finally hit bottom and begin to increase in 2012, according to a group of 54 economists surveyed by the Wall Street Journal.
The increase will be slight, probably less than 2.5% a year — not enough to keep up with inflation, the economists said. Yet the rebound will still be a welcome relief for homeowners across the country, who saw prices slip again this year. The economists predicted that home prices, as tracked by the Federal Housing Finance Administration, will fall 2.7% in 2011.
In Chicago, we’ve seen home prices drop about 5% this year, according to the most recent data from the Case-Shiller home price index. Prices started to recover here over the summer, only to dip ever so slightly (less than 1%) between August and September.
What’s next for the Chicago market? With interest rates at record lows — local lenders like Guaranteed Rate are now offering 30-year fixed mortgages at 3.85% — it’s still a stunningly cheap time to buy a home. But unemployment remains stubbornly high in the Chicago-Joliet-Naperville area, a factor that is likely to keep a lid on home prices. Even though Illinois led the nation in job growth in October, unemployment jumped from 8.8% a year ago to 9.7% in the Chicago area.
With financing for development so tight, it’s gotten quite hard to find new condos under construction throughout Chicago’s North side. What you can find, however, are hundreds of condos built in the last five years — where the value has fallen so far from what the original owner paid that many of them are nearing or already in foreclosure.
That means there are plenty of almost new condos in almost new buildings, many of them being sold at bargain prices. In Lincoln Square and North Center, two popular areas that include Ravenswood and Roscoe Village, there are more than 50 condos with at least 2-bedrooms that fit this description — all for sale at prices under $400,000.
At the lower end of the scale you have distressed (meaning financially troubled, not necessarily physically damaged) properties like 2472 W Foster Ave. #206, a 2-bedroom, 2-bath unit with garage parking for only $194,000. This empty unit is a short sale, which requires bank approval (and patience on the part of a buyer). The 1300-square-foot condo boasts limestone baths and a balcony, and it is located in a 5-year-old building where similar units sold for $280,000 to $335,000 in late 2006 and early 2007.
Meanwhile, there are several properties for sale in the $300,000 range with considerably more space. Consider 4809 N California Ave. #2W, also in Lincoln Square, a 3-bedroom, 2-bath with Brazilian cherry floors, a master bath with a steam shower and jacuzzi tub, and a large deck. Parking is $20,000 extra. Or 4313 N Western Ave. #2 in North Center, a 3-bedroom, 2-bath unit with parking. It features cherry cabinets and granite counters, stone baths and hardwood floors, located in an intimate 3-unit building built in 2008.
At the upper end of the range, there’s a 3-bedroom, 2-bath Roscoe Village condo with two parking spaces, a large deck and a balcony. Located at 2332 W Belmont Ave. #2, this is a 1700-square-feet unit featuring a separate dining room, gourmet kitchen, limestone baths and custom closets. It is priced at $398,500.
So if you’re looking for new construction in this age of scant construction, don’t despair. There are some wonderful, slightly used condos out there, available for much less than the first owner paid.
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.
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