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Chicago ranks #1 nationwide in foreclosures

filed under: Buyers, Foreclosures, Lakeview, Sellers posted on July 9th, 2011

CHICAGO, FORECLOSURE CAPITAL OF THE NATION:

CHICAGO, THE NEW FORECLOSURE CAPITAL: Unfortunately, Chicago now leads the nation in the number of foreclosed homes. This 3-bedroom, 3-bath foreclosed house in Lakeview, which was listed at $586,000 at the end of 2009, finally closed last April for $405,000.

The Chicago area now has the largest inventory of foreclosed homes in the nation, and these abandoned properties take longer to sell here than in most other cities.

With 118,776 homes that are either bank-owned or in the midst of being seized by lenders, Chicago ranks first in foreclosures among the 20 biggest metro areas, according to RealtyTrac, a company that compiles housing data. Even the cities that were hit hardest by the housing bust, such as Los Angeles, Miami, Las Vegas, and Phoenix, had tens of thousands fewer homes in foreclosure when the data was collected in May. Los Angeles, for example, was #2 with 86,745 foreclosed homes.

As a realtor who regularly shows homes throughout Chicago, particularly on the North side, I can testify that many of the foreclosures here are: 1) concentrated in poorer, less desirable neighborhoods with older housing stock 2) in lousy condition, often missing kitchen appliances or pockmarked by signs of neglect, such as water leaks and mold 3) if they are condos, located in buildings that may have other foreclosures, short sales, units not paying their assessments or financial problems that make lenders unlikely to give a buyer a mortgage there 4) owned by banks that are disorganized, unresponsive, and even idiotic in their approach to selling the home.

In a story today in the New York Times, the glut of Chicago foreclosures is also blamed on Illinois law that protects delinquent borrowers by requiring lenders to go to court to foreclose, creating a backlog of cases. Meanwhile, Attorney General Lisa Madigan is investigating banks’ “robo-signing” practices, involving the creation of  false loan documents.

Also slowing down the sale of distressed properties is the reluctance of banks to lose money. Banks will be banks, of course, and they don’t want to sell foreclosed homes for substantially less than what the borrower owed on the mortgage. (I also see this mindset slowing down and often thwarting short sales, which is why I generally discourage buyers from even pursuing them until the banks get their acts together.)

The bottom line is that Chicago and its suburbs, especially the poor neighborhoods, are full of foreclosures. Buying one requires lots of patience and the acceptance of more risk than you’d encounter in a normal sale. But there are still some good deals out there, and I have helped several of my buyers pursue foreclosed homes that they now happily own.

Written by Sue Fox // Please leave a comment.

Experts predict bottom for housing prices

filed under: Buyers, Chicago home prices, Gold Coast, Market conditions, Sellers posted on July 6th, 2011

Will 2011 prove to be the bottom for Chicago home prices? The jury is still out, but on a national level, many housing experts believe that the worst will soon be behind us.

A MILLION DOLLAR DISCOUNT: This Gold Coast

DRAMATIC DISCOUNTING: This Gold Coast greystone, built in 1883, still boasts many historic details, such as a hand-carved staircase, leaded glass windows and a mosaic tile foyer. All it needs now is a buyer! Have prices finally found a bottom in Chicago? One can assume that this owner, who 0riginally priced the home at $2.15 million, hopes so. Currently for sale at $1.49 million, it has been on the market for nearly 3 years. Jeanne Carava of Prudential Rubloff has the listing.

In June, MacroMarkets LLC polled more than 100 economists, real estate experts and investment strategists with a wide range of viewpoints, including the National Association of Realtors Chief Economist Lawrence Yun, Moody’s Analytics economists Mark Zandi and Cecilia Chen, FusionIQ CEO Barry Ritholtz, and Freddie Mac Chief Economist Frank Nothaft. More than half of the panel said they expect U.S. home prices to hit bottom sometime this year and then remain stable through 2015.

“A significant majority of our panelists believe that the bottom for home prices arrived in the first quarter or will arrive sometime before year end,” said Robert Shiller, co-founder of the Standard & Poor’s/ Case-Shiller National Home Price Index and Macro Markets’ chief economist and co-founder. “Despite persistent macroeconomic uncertainly and unprecedented housing market dysfunction, almost two-thirds of the panelists see the U.S. residential real estate market as at an historic turning point.”

To be sure, I still see plenty of homes that aren’t selling. But those that do sell tend to be either distressed properties at bargain prices or handsome homes with plenty of amenities in solid neighborhoods. Put it all together, and it seems home prices in Chicago are finally starting to touch bottom.

Written by Sue Fox // Please leave a comment.

Condo & townhome prices up in Lincoln Park

filed under: Buyers, Chicago home prices, Lincoln Park, Townhomes posted on July 5th, 2011

A SPARK IN LINCOLN PARK: Some Chicago areas are still hot, even in this punishing market and some

A SPARK IN LINCOLN PARK: Some Chicago areas are still hot, even in this punishing market, and some are not. Lincoln Park, one of the city's most popular and wealthy neighborhoods, has held its value. Condo and townhome prices have surged 14.2% here during the past two years. This 3-bedroom townhome at The Pointe, for instance, sold for $710,000 this spring.

Buyers often ask me for advice about a key question: Is it better to buy a smaller place in a nicer neighborhood, or a bigger home in a slightly less-desirable area? Real estate always involves a series of trade-offs (regarding price, location, size of the home, age of the home, amenities, school district, etc. etc. etc.) but this Location Vs. Size debate is one of the central decisions that buyers must make. In other words, is it a better investment to buy a 2-bedroom condo in, say, a stable, affluent area like Lincoln Park… or maybe a 3-bedroom condo a little further north, perhaps in Uptown or Edgewater?

These days, my vote would have to go with Location. That’s because we are now in Year 5 of a brutal and unrelenting real estate downturn, and I’ve watched homes in many fine North Side neighborhoods lose their value as buyers increasingly turned away from up-and-coming, less central areas in favor of those that were already quite popular. A bird in the hand is probably worth at least five in the bush in these uncertain times, and if you buy in an established, thriving community like Lincoln Park, you will likely come out ahead no matter what.

Consider the prices of condos and townhomes in Lincoln Park over the past two years. While other Chicago communities (and the city as a whole) saw home prices drop, the median sale price for Lincoln Park condos and townhomes increased 14.2% since June 2009, according to MLS data. And the climb has been relatively steady. Two years ago, the median sale price was $530,000. A year later, it was $557,500. And this June, it had jumped to $605,000.

Chicago home buyers are voting with their feet. Every day, they are choosing where to invest, live, and raise families — and they aren’t in a mood to gamble on a neighborhood that seems to be struggling or battered by foreclosures or lacking a strong commercial center or too far from the action. Lately I’m seeing more buyers opting for places like Lincoln Park, Lakeview, Bucktown, and the Gold Coast over areas like Logan Square, Irving Park, Albany Park, Uptown, Edgewater and Rogers Park — even if it means less space.

Written by Sue Fox // Please leave a comment.

Sweet interiors in Wicker Park and Bucktown townhomes

filed under: Bucktown, Buyers, Chicago home prices, Sellers, Townhomes, Wicker Park posted on June 20th, 2011

BUCKTOWN LUCK:

BUCKTOWN LUCK: This snazzy kitchen, burnished by $60,000 in upgrades including custom cabinetry and Brazilian granite countertops, was an eye-catching centerpiece of a Bucktown townhome. Priced at $669,000, it went under contract within just three weeks.

I have some clients looking for a townhome in the $700,000 range in Wicker Park, Bucktown, or Lincoln Park, and lately we have run across several impressive homes with a least three bedrooms, garage parking and a roof deck. Because Wicker Park and Bucktown tend to boast newer construction than other areas of the city closer to the lake, their selection of mid-range townhomes has been more attractive than that of, say, Lincoln Park, where many townhomes were built in the 1980s.

Take, for example, the 4-bedroom, 2-and-a-half bath townhouse at 1757 N Paulina, Unit O in the heart of Bucktown. Tucked away in a narrow courtyard off a nondescript street, these brick townhomes aren’t much to look at from the outside. (This is often the case with Chicago townhome developments; you’ll find an expanse of brick broken up by an occasional bay window jutting out, usually framed in metallic cladding or limestone as an accent. Nothing too exciting, generally, but once you step inside some homes rapidly distinguish themselves from the masses.)

Here on Paulina, the home immediately opens up into a soaring living room bathed in light, anchored by a dramatic floor-to-ceiling stone fireplace. The kitchen –which has seen some $60,000 in upgrades — was truly beautiful, with custom Brookhaven cabinetry and white Brazilian granite. There was a huge island and room for a large table (or a built-in banquette, in this case.)

This elegant home was priced at $669,000 — and it’s not alone. We have seen several at this price point that are worth consideration, a welcome change from the lofty prices such upgraded homes used to command. There was a similar unit in this development that sold for $800,000 in 2008.

Even in this market, a lovely home in a good location that is well-priced is likely to sell. People still value beauty (and location). And while this Bucktown townhome wasn’t quite right for my buyers, it sold quickly — just three weeks after hitting the market.

Written by Sue Fox // Please leave a comment.

More troubled sales at Catalpa Gardens

filed under: Buyers, Chicago home prices, Edgewater, Foreclosures, Sellers, Short sales posted on June 14th, 2011

CATALPA GARDENS FALLS SHORT: Not two years after many owners bought here, 13 of them are trying to sell their condos short. Because these deals require lender approval (and the lender will lose money), they often fail.

CATALPA GARDENS FALLS SHORT: Over the past year, 9 of the 12 sales here was a short sale. Another was a foreclosure.

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.

Written by Sue Fox // Please leave a comment.

Condo prices plunge in Chicago area

filed under: Andersonville, Buyers, Chicago home sales, First-time buyers, Market conditions posted on May 11th, 2011

AVILLE

A CHILL IN A-VILLE: This newly rehabbed 2-bedroom, 2-bath condo in the heart of Andersonville has been on the market for more than 400 days. It sold for $300,900 in the summer of 2008 and its owner listed it in Feb. 2010 for $304,999. One of dozens of 2-bedroom condos now for sale in once-hot Andersonville, it is now priced at $285,900.

Condo prices have tumbled 10.4% nationwide in the last year, according to data just released by the National Assn. of Realtors. But the plunge was much worse in the Chicago area, where prices dove 24.1% in the first quarter compared to a year ago.

The region (Chicago-Naperville-Joliet, in terms of the realtor’s association) fared worse than almost every other metro area in the country. Only the Tampa and Sarasota regions in Florida and Barnstable Town, Mass., saw condo prices fall further.

No wonder it’s getting so difficult to sell a condo in Chicago. What was once an active market has become seized and sclerotic, with thousands of condos for sale that just sit and sit and sit. I’m now seeing this troublesome trend in desirable neighborhoods like Andersonville and Lincoln Square, as well as much of Edgewater, Uptown, and even parts of Lakeview. Chicago’s North side seems to be awash in condos, may of them recent rehabs or nicely restored vintage units, that languish on the market for months despite their appeal. For many condos, showings are scarce and open houses attract only a few people, even at the height of the spring market.

What is going on here? Are young people, who traditionally drove the market for first-time condo buyers, deciding that it’s simply better to rent? Or are so many of them unemployed or under-employed that they can’t qualify for a mortgage? There are definitely fewer first-time buyers in the market these days; according to the realtor’s association, first-time buyers purchased 32% of homes in the first quarter, down from 42% last year when a $8,000 tax credit was stimulating sales.

If first-time buyers sit on the sidelines, our market will become paralyzed. First-time buyers drive sales by buying at the lower end, which then frees up those sellers to go buy another home. But if people can’t sell their condos, most of them won’t be able to buy again. They will be stuck. And unfortunately, this year many Chicago sellers are discovering that is exactly where they are.

Written by Sue Fox // Please leave a comment.

Foreclosure feast in Rogers Park

filed under: Buyers, Chicago home sales, First-time buyers, Foreclosures, Rogers Park, Short sales posted on May 6th, 2011

NOT A FORECLOSURE:

NOT A FORECLOSURE: One of the rare condos for sale in Rogers Park that isn't under some sort of financial cloud (or at least, the listing doesn't mention any problem). Priced at $179,000, this 3-bedroom, 2-and-a-half-bath has been on and off the market for more than a year... and was in fact listed as a short sale for $219,000 earlier this year.

This week, one of my buyers made an offer on a foreclosed 2-bedroom, 2-bath condo in Rogers Park. In years past, I did a healthy business in Rogers Park; it was a popular destination for first-time home buyers who wanted to live in an affordable area close to the lake.

But Rogers Park, like so many other up-and-coming neighborhoods throughout Chicago, has been just about crushed by the real estate downturn, resulting in a massive tide of foreclosures and short sales. This has made Rogers Park something of a buyer’s banquet, with deals you can only dream of in other North side areas, like newly-rehabbed 2-bedroom condos with parking for well under $200,000.

There are now 99 condos with at least 2 bedrooms and 2 baths listed for sale for less than $200,000 in Rogers Park (and more than 20 of them have 3 bedrooms.) But the truly shocking part is that nearly all of them are distressed properties, either foreclosures or short sales seeking to avoid a foreclosure. I just combed through all 99 listings, and I only counted 28 that were NOT foreclosures or short sales.

In fact, it’s so rare to find an ordinary seller selling a ordinary home in Rogers Park these days that it’s become a selling point: “REGULAR SALE!!!!” shouts the description for 1900 W Touhy Ave #1C, a rehabbed condo priced at $135,000.

The flip side of so many great deals is that most of them, unfortunately, will be difficult to actually buy. At least half of them are short sales, which require lender approval that takes months and often never comes. Many of these will eventually slide into foreclosure and be seized by a bank. Even the foreclosed condos can be tough to buy, though, because if they are located in a troubled building with other distressed units, lenders will not want to loan in that building.

So if you are a buyer considering Rogers Park — especially if you’re a condo buyer — please tread carefully. The neighborhood’s housing market has become a veritable thicket of problem properties, and you need to make sure you are well represented as you sort through the real estate rubble looking for a gem.

Written by Sue Fox // Please leave a comment.

Lovely duplex-up condo in Lincoln Square

filed under: Buyers, Lincoln Square posted on April 26th, 2011

SUN-SPLASHED: Because this duplex is on the second and third floors, the whole condo gets plenty of light.

SUN-SPLASHED: Because this duplex is on the second and third floors, the whole condo gets plenty of light. It feels like a townhouse... at a much lower price.

Check out my new listing, an elegant duplex-up condo in the heart of Lincoln Square. In real estate parlance, a duplex-up is a two-story condo unit where the bedrooms are upstairs, rather than tucked below grade on the basement level in a duplex-down unit. Duplex-up condos are much harder to find than duplex-downs, and they are prized because the bedrooms feel light and airy since they are often on the third floor or above.

This duplex, located at 2646 W Gunnison #2, is nearly new and packed with upgrades. The building was gut rehabbed and converted to condos in 2007, and this unit features a gourmet kitchen with cherry cabinets, granite counters, a tile backsplash, a breakfast bar, and all stainless-steel appliances. The kitchen opens to a striking living/dining area with classic recessed ceilings, a gas fireplace, and large windows that let in the sunlight. There are hardwood floors, crown molding, and elegant finishes throughout. You can check out more photos here.

On the upper level, there are two bedrooms and two luxury baths, each ensconced in a private suite. There is also a laundry room down the hall, making it easy to wash and fold clothes without trekking up and down stairs.

The condo is located in an intimate 10-unit building that is across the street from a park. It’s close to the Brown line and all the restaurants and shops of Lincoln Square. This is a beautiful, modern home, priced to sell at $299,900. If you would like to see this duplex, or any of my other listings, please call me at 773-816-1788. Thanks!

Written by Sue Fox // Please leave a comment.

Sales of new houses plummet in Chicago area

filed under: Chicago home sales, Market conditions posted on April 25th, 2011

SOMETHING NEW:

SOMETHING NEW: This "spectacular new construction home" first hit the market in June 2007 with a $2,389,000 price tag. Complete with a sweeping marble staircase, mahogany doors and an elevator, this 5-bedroom Bucktown house tumbled into foreclosure for want of a buyer by 2009. It finally closed that May for $1 million. The listing noted that it had "amazing potential" but needed to be finished off.

Remember the days when developers couldn’t seem to build new houses fast enough to satisfy the eager buyers who were lining up to buy them? This was mostly a suburban phenomenon in the Chicago area, although builders snapped up plenty of tear-downs in the city as well, razing older homes in favor of handsome (and expensive) new ones in popular neighborhoods such as Bucktown and Wicker Park.

Those high-flying days are tough to even imagine right now. New single-family home sales are now at the lowest point they have ever been since the data was first gathered in 1963, when the U.S. had 120 million fewer people, the New York Times reported Saturday. New home sales have plummeted more than 80% from the peak in 2005, while resales of other homes fell just 28%. And in the Chicago metro area, the trend is even more pronounced — new homes sales are down 90%.

In addition to the near-collapse of the financial system and record high unemployment in recent years, it seems that surging gas prices are also playing a role in this sustained downturn. Many people now prefer smaller, cheaper houses closer to their jobs. They are less willing to buy a new suburban house that demands a long commute. One home builder out in Richmond even decided to throw in a new car with any home purchase to boost his dismal sales, the Times said.

There are also thousands of foreclosed houses now competing for buyers’ attention. In Chicago, nearly 4 out of 10 home sales is a foreclosure.

Sometimes you fall so far, there’s not much lower to sink. That may be the case with housing starts reported for March, which were up 7.2% for a 549,000-unit annual rate.  New building permits also jumped. Housing starts and permits remain down about 13% over last year, however.

Written by Sue Fox // Please leave a comment.

More IL jobs point to real estate recovery

filed under: Buyers, Illinois unemployment, Market conditions, Sellers posted on April 14th, 2011

People often ask me whether the Chicago housing market, which has deteriorated to the point that home prices now stand about where they were a decade ago, has hit bottom. Much of the answer depends on employment, because without jobs, people can’t buy houses. And if they already own homes, they are more likely to lose them if they lose their jobs.

But in recent months, Chicago’s employment picture has brightened considerably. Today the Illinois Department of Employment Security announced that the Illinois unemployment rate dropped to 8.8% in March — marking the 14th consecutive month of good news about local jobs. 

This is particularly important for Chicago, the economic engine of the state and the third-largest city in the country. The jobless rate fell one-tenth of a percentage point from February and is now the lowest since February 2009, when it stood at 8.6%.

 “Illinois is moving in a positive direction,” said the state employment director, Maureen O’Donnell. She said this is the  longest decline in Illinois unemployment  in more than 16 years. However, more than a half a million state residents (582,100, to be exact) were still looking for jobs in March.

Jobs are the key to any real estate recovery. If unemployment continues to fall — and mortgage interest rates continue to rise — we may find that 2011 indeed marked the bottom for the Chicago housing market.

Written by Sue Fox // Please leave a comment.