Sue Fox, @Properties. Direct 773.816.1788
Subscribe to Site
- FHA loans
- Market conditions
- Tax credits
Real Estate radio
Archive for the 'Neighborhoods' Category
Lincoln Park is one of the most desirable neighborhoods in Chicago, with such prime real estate that many buyers assume they can’t afford it and begin their search in Lakeview or North Center instead. But recently, prices have fallen to the extent that there are now more than 60 Lincoln Park condos with at least 3 bedrooms available for less than $500,000. Most of them are townhomes or duplex units.
I was just searching for 3-bedroom condos in Lincoln Park, and came across several that have been on the market for more than a year — taking steep price cuts in the meantime. Like 2743 N Wolcott #43, a modern townhouse with a full finished basement and attached garage. Listed for sale a year and a half ago, at $535,000, it is now priced at a much more reasonable $439,900.
Or 1956 N Burling St, Unit B, which has been on the market for 539 days. The price tag for this townhouse, which has a 28-foot private rooftop deck and two wo0d-burning fireplaces, went from $525,000 to $449,000. Many others have been sitting on the market for at least six months, enduring price drops of $75,000 to $100,000.
If you’re looking for a townhouse or condo in Lincoln Park, now is the time to strike. There are some great deals out there this fall, and not enough buyers to absorb them. The imbalance between supply and demand has pushed prices down, to the point where we’re now seeing fabulous, renovated units like 2639 N Sheffield #2, an extra-wide 3-bedroom, 2-bath with garage parking, for just $469,000. This simplex condo is packed with features that today’s buyers want, like a gourmet eat-in kitchen with cherry cabinets, a master suite with a marble bath, separate shower and double vanity, high ceilings, lots of windows, a balcony and a back deck.
It’s been on the market since June, when it was priced at $574,900.
Happy Halloween! As the Chicago streets fill with little pirates and princesses, this time of year is often particularly scary for people trying to sell their homes. Many of them listed the property in the spring, waited all summer in hopes of a buyer, and now are facing a fading autumn with increasing desperation.
That’s why the fall is such a great time for serious buyers to find deals. Sellers have been knocked to their senses, with a brutal market showing them just how few homes are selling and at what prices. Some of them are doing the math and realizing that if they don’t sell now, they will likely be holding onto their homes through the winter and into the spring, paying another six months of mortgage payments and taxes. Serious sellers are ready to cut a deal.
In the last week alone, almost 900 new listings — 293 single-family houses, 434 condos, and 155 multi-unit buildings — hit the market in Chicago. But just 298 home sales closed. Multiply those trends over the autumn months and you’ve got thousands of homes out there in search of buyers — not to mention all the ones listed earlier in the year that still haven’t sold.
Qualified buyers remain a rarity. So if you are considering a home purchase anytime in the near future, remember that the fall season offers unusual treats for buyers ready to pounce. Wait until spring, and you’ll be out house-hunting with hundreds of competing buyers, amid sellers who aren’t so motivated to bargain.
The Illinois Assn.of Realtors released its latest data today, showing that Chicago home prices and sales both rose somewhat in September, compared to the same month a year ago. On the face of it, that’s good news. It seems that prices — and the number of homes changing hands — are finally starting to stabilize in Chicago.
There were 1,498 home sales (single family and condominiums) in September, up 6.8% from the previous year. Chicago’s median home price rose 5.6%, from $180,000 to $190,000.
Okay, $190,000 is better than $180,000. But it’s much worse than $225,000, which is where Chicago’s median price stood just two years ago, or $268,600, where it was three years ago. Check out the dramatic decline — in both prices and sales — over the past four years in Chicago:
- 2007: $267,750
- 2008: $268,600
- 2009: $225,000
- 2010: $180,000
- 2011: $190,000
- 2007: 2172 sales
- 2008: 1816 sales
- 2009: 1918 sales
- 2010: 1403 sales
- 2011: 1498 sales
So it’s a little premature to break out the hallelujah chorus. Even though things seem to be improving a bit, Chicago home prices are down 29% and sales have fallen 31% in just four years. The drop in sales volume was particularly steep in the autumn of 2010, after the federal tax credits for home buyers expired and demand dried up. Now Chicago’s market has recovered slightly from that abysmal season, giving us a pretty good idea of what the new normal looks like.
“September home sales in the city of Chicago show signs of stabilization, with an increase in the units sold for both single family and condominiums,” said Bob Floss, president of the Chicago Association of Realtors. “While interest rates remain historically low and prices compelling, we remain concerned about the overall economic stability of our marketplace with unemployment numbers and job creation still top of mind for so many buyers and homeowners, alike.”
It’s quite rare to find a house for sale in Andersonville’s beautiful Lakewood-Balmoral historic district for under $1 million. But every real estate downturn has an upside, and today there are several homes — including a genuine fixer-upper — priced closer to the half-million mark here.
The handyman’s special, a dilapidated three-story, turn-of-the-century Victorian complete with a turret, is in such lousy shape that the realtor didn’t bother to post any interior photos. “Not in move-in condition,” the listing advises. “Ideal for complete rehab or build new.” Located at 5453 N Magnolia, this 5-bedroom home has already been on the market for five months and is currently priced at $580,000 (a screaming deal for Lakewood-Balmoral, where a similar home in restored condition would fetch perhaps $1.4 million.)
On the same block, another faded beauty — this one with a third-floor ballroom in need of major work — is for sale at $675,000. Located at 5426 N Magnolia, this 1901 house retains some of its original splendor (the photos depict gorgeous wainscoting and stained glass in the dining room) but, again, the listing warns off casual house hunters. “House needs work, serious investors only,” it says. This home recently went under contract, after more than 6 months on the market.
And right across the street (what is it with this block?) there’s another home for sale, this one a brick 1906 house that looks a bit like a 2-flat from the outside. Priced at $720,000, it has just 3 bedrooms (plus one in the basement), but it also boasts the original staircase, leaded glass windows and built-in cabinetry. It’s been updated, with a newer kitchen and partially finished basement, and it’s been on the market since June.
Recent sales indicate that Lakewood-Balmoral bargains are often quickly snapped up. An updated 4-bedroom at 5410 N Wayne sold for $665,000 in May, while another updated 4-bedroom — this one at 5441 N Wayne on an extra-wide lot with a finished basement — sold for $750,000.
So if you’re in the market for a historic home in one of Chicago’s nicest neighborhoods, now is an uncommonly good time to make your move.
This has been an odd and uncertain year for Chicago real estate. Deals are still getting done, but absolutely every element has to be in place in order to get to the closing table. As a realtor on the ground day in and day out, I have seen some strange standoffs unfolding this year, with both buyers and sellers hesitating at crucial moments and sometimes deciding to stay put. No wonder sales are so scarce!
Here is what I’m observing from buyers: There is little urgency. With mortgage rates hovering at a record low of 4% and home prices in the gutter, most would-be buyers realize this is a golden moment to buy a home. However, they are also somewhat casual about the opportunity, since from their perspective this has been going on for at least a couple years. Neither interest rates nor home prices seem to be in any danger of quickly shooting up, so what’s the hurry?
In the last few months, I have witnessed at least five buyers wade halfway into a deal, only to change their minds. I have had some buyers who are pretty sure they want to make an offer, only to reconsider and decide against it. Others look around for a couple months and then opt to keep renting for another year. I have even seen two buyers (neither of whom I was representing; in both cases I was the seller’s agent) who wrote up offers and then, for lack of a better word, freaked out. One went so far as to negotiate a price and then refused to sign the contract, while the other actually did sign the contract — and then a day later changed his mind. Under the attorney review period, he was still able to withdraw from the deal.
Things look mighty different, on the other hand, from the point of view of many sellers. I can’t tell you how many listing appointments I’ve gone on this year where — once I explained the recent comps and showed the owners what their home was likely to sell for — they suddenly realized just how bleak their situation was. I met with one lovely woman last week who exclaimed, “Oh my god, Sue! I knew the market was bad. But I had no idea how bad it was.”
Yes, it really is bad. As in, your home is probably worth 10-35% LESS than what you paid for it, depending on what year you bought it and where it is located. In real terms, this means that sellers who paid $330,000 in 2007 can’t even sell for $285,000. Sellers who bought for $230,000 in 2005 (and put $15,000 in upgrades) would likely have to list their condo for less than $200,000 to get a bite. Owners who paid $450,000 in 2005 sold the same place this year for $95,000 less. I just checked the comps for someone who paid more than $220,000 six years ago in a building where similar units are now selling for $100,000 to $160,000, depending on the condition.
It is routine for sellers to be faced with a diabolical choice such as: Do you want to stay in the cramped two-bedroom condo you have outgrown now that you have a new baby, or do you want to bring $50,000 to closing in order to pay off your lender and closing costs? Many, many people do not have the tens of thousands it would take to close the deal. So they stay put, they decide to rent out their place, they attempt a short sale with their lender, or they overprice their home and stick it on the market anyway, hoping someone out there will pay them not what it’s worth, but what they owe.
Thus, as the winter season approaches, we have a standoff. Many Chicago sellers desperately want to sell, but they simply can’t afford to lower their asking prices to the point where a buyer would be interested. Many buyers theoretically want to buy, but only if they find a place they adore at a price that can’t be beat.
Another wave of Chicago-area foreclosures may be ahead, according to recent data gathered by RealtyTrac. The number of homes that received notices of mortgage default in the metro area spiked 30% in August over the previous month.
Some 6,239 delinquent homeowners received notices — the first step in the foreclosure process — in Cook County and the surrounding areas (DuPage, Kane, Kendall, Lake, McHenry and Will counties). The vast majority of the troubled properties, however, were in Cook, the nation’s second-largest county. Foreclosure filings jumped 24% in Cook County.
I see plenty of foreclosures, and most of them need at least a little work (and some of them require a total rehab). Missing or broken kitchen appliances are routine, as are floors that need refinishing and walls that need repainting. Because many foreclosures have been vacant for months, there are frequently leaks that have damaged the floors or drywall (I have seen more than one foreclosed condo where the refrigerator had leaked onto the hardwood floor.)
But for homebuyers seeking a bargain — especially if they have a little cash to put into repairing the property — foreclosures can be a good opportunity. There are a lot of good deals out there right now, and mortgage interest rates are super low.
Chicago’s foreclosure crisis has been uneven, devastating some communities while barely touching others. Even in the more affluent neighborhoods like Lakeview, they tend to be clustered in certain buildings like 655 W Irving Park Road or 3660 N Lake Shore Drive. And in the poorer areas, such as South Shore, you’ll find some blocks — even blocks right by the lake — where it seems that every other house is a boarded-up foreclosure.
What’s harder to find is a single foreclosed property in the middle of an otherwise stable, desirable neighborhood. Those homes tend to sell quickly, especially if they are priced below market value, and they often attract multiple offers.
When it comes to truly high-end real estate, Chicago is worlds away from New York. While the Big Apple has dozens of properties that sell for multiple millions, it’s exceedingly rare to find homes in the Windy City that close for $5 million or more.
How rare? Over the past year, only three single-family homes in the entire city of Chicago have sold for upwards of $5 million, according to Midwest Real Estate Data LLC. Another five houses went for $4 million to $5 million. The most expensive Chicago house to sell was 25 Banks Street, a 13,500-square foot Gold Coast mansion built in 1880. Located a block from the lake, it boasted 8 bedrooms, 11 bathrooms, a media room, a wine vault, staff quarters with a separate entrance, and a rooftop terrace. But even this grandeur came at a bargain price: $6.8 million, about half its original price tag of $13.5 million after more than three years on the market.
Of course, there were also seven Chicago condos that sold for upwards of $5 million over the past year. With the exception of one, they were all at the Elysian, the new luxury building located at 11 E Walton Street. (The other was a top-floor penthouse located above the Four Seasons Hotel at 132 E Delaware Place.) At $8.6 million, the priciest condo cost more than the most expensive house — and both were cash deals, as were the majority of all the $5 million-and-up sales. Hmmmm, I was just wondering what to do with that $5 million just sitting in my bank account…
In any case, multi-million dollar sales of any sort are a rare breed in Chicago. There were only 50 single-family houses and 75 condos that sold for $2 million or more citywide (mainly in the Gold Coast, Streeterville or Lincoln Park) over the past year. On the North Shore, moreover, there were 86 homes that sold for over $2 million, but only six that fetched more than $5 million.
Chicago real estate doesn’t generally bounce along like a perky episode of Flip That House, but now and then you still see a sparkly rehabbed house hit the market a few months after it was plucked from the netherworld of foreclosure. Such is the case with 3339 N Kolmar Ave. in Irving Park, a 5-bedroom checkerboard bungalow that has been completely renovated in the space of three months.
Back in April, this 1926 house was just another forlorn foreclosure, owned by a bank and being sold “as is.” But its interior was still in pretty good shape, although the kitchen needed updating. It sold for $152,000 after three months on the market.
The new owner got straight to work, but made sure to keep many of the charming features that make a bungalow a bungalow: the distinctive curb appeal with its low roof line, the exterior limestone accents, the gorgeous stone fireplace flanked by bookcases in the living room, the hardwood floors and wood trim. In this case, it looks like the original windows had already been replaced, as had the kitchen and baths (probably sometime in the 1980s, from the look of the photos.)
The new kitchen now boasts granite countertops, stainless steel appliances and what appear to be cherry cabinets. It looks shiny and new, but it also looks like every other generic kitchen built by a developer in thousands of condos (and houses) throughout the city. Sometimes I wish the owners of these historic homes would put a little more thought into how they restore them. There’s an entire book on how to renovate bungalow kitchens, the aptly-named “Bungalow Kitchens” by Jane Powell and Linda Svendsen. They also wrote “Bungalow Bathrooms,” and both books feature beautiful photos of updated rooms that preserve historic character without sacrificing modern functionality.
But I digress! The bungalow at 3339 N Kolmar now features bathrooms redone with marble and granite, a renovated basement, and a huge deck in the freshly landscaped backyard. The bedrooms are scattered throughout the home, with two carpeted rooms upstairs, one with hardwood floors on the main level, and two others below grade (with wood laminate floors) in the basement.
The house is now priced at $313,900, down from $334,900 when it hit the market in July. These rehabbed single-family houses tend to sell quickly in Irving Park, but this one may need to drop its price just below $300,000 to attract the buyers in that range.
Let me know if you’d like to see this bungalow, or any other home! I’ll even let you borrow my bungalow books.
There are 28 houses, many of them new construction, currently for sale at prices above $1 million in Bucktown, Wicker Park and Ukrainian Village. But despite many months — sometimes more than a year — on the market, the majority of these sellers seem reluctant to lower their prices. Some are surely developers who built spec houses and now don’t want to face the fact that the depressed market has sliced deeply into their hoped-for profits.
Only 13 of the 28 have cut their prices, a ratio far less than the local average. Two-thirds of home sellers in Illinois reduce their asking prices, according to data collected by the Illinois Assn. of Realtors. Home sellers in Chicago, a region hit hard by foreclosures, typically post the largest price reductions in the state.
But at the top of the market in popular Bucktown and its neighboring areas, you’ll find houses like 2556 W Huron Street, a 4-bedroom renovated greystone for $1.3 million that’s been on the market for two and a half years without a price reduction. Or 2032 W Ohio Street, a 7000-square-foot mansion with 5 bedrooms, 20-foot ceilings and a huge roof deck, all spread over two city lots. It’s been stubbornly priced at $1,685,000 for a whole year.
Others are more recent listings, with no price reductions all summer and into the fall. Or there are homes like 1232 N Hoyne Avenue, a modern 6-bedroom with an elevator, two playrooms and a screening room, which has been priced at $1,699,000 for more than nine months (it did have one price cut before that, from $1,749,000.)
While I agree that Bucktown and Wicker Park are wonderful, hip places to live, it’s simply not realistic to leave these overpriced luxury homes languishing on the market. If they are not selling after months online, by definition they are priced too high. And over the past four months, only three of these million-plus houses have closed. Three out of 28… That’s a pretty low ratio.
So if you are shopping for a high-end house in Bucktown and its environs, I wouldn’t put too much stock in these lofty price tags. All three of the homes that actually sold, after all, went for $175,000 to $650,000 less than their original prices.
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.
- 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