Sue Fox, @Properties. Direct 773.816.1788
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I was going to write about my latest listing, a 2000-sq-ft luxury condo with three bedrooms, two baths, garage parking and a roof deck with a great view of the lake. But it’s already been snapped up by a buyer, after just a week on the market.
So what’s the secret? Yes, it was a lovely unit with plenty of space and high-end finishes, in a snazzy building built just a few years ago. But the reason is sold so quickly, which I see time and again in Chicago, is that it was priced right. My sellers were realistic, asking $359,000 for a unit they purchased new from the developer in 2006 for nearly $90,000 more.
No one likes to take such a loss. But consider the fate of two similar luxury units in the same little lakeside stretch of Edgewater, just south of Loyola: One condo, at 5722 N Winthrop #3S, was on the market for a tragic 1,134 days. The price started at a lofty $489,500 and finally fell to… $359,000. But it didn’t sell. The owner, probably beaten down by three years of relentless price reductions, finally gave up and took it off the market a month ago. Another similar condo, at 6121 N Winthrop #2N, was originally priced at $359,000 in January, and it went under contract in less than two months.
So when it came time to list their unit, my sellers carefully considered the recent comps, listened to my take on market trends and priced their unit accordingly. Within a week, we had a buyer!
And that is really the point. What good is listing your home if you don’t sell it? We’re now seeing thousands of Chicago home sellers each year that — despite months on the market and multiple price cuts — ultimately fail to attract buyers. If you price your home correctly, you needn’t be one of them.
The monthly sales data is out for February, and the median home price in Chicago — now $177,500 — appears to be pretty much what it was a year ago. It’s actually a tad higher (by $1,000). Perhaps prices have finally stopped their relentless downward slide in the Windy City.
Yet sales volume continued to plummet, meaning that fewer properties are actually changing hands. A year ago in February, there were 1,225 single-family homes and condos sold in Chicago, according to the Illinois Association of Realtors. But in February 2011, only 1,056 homes were sold, nearly a 14% drop. This is not encouraging news for sellers who are hoping to attract buyers during this year’s spring market.
And prices are way down from where they were even in 2008, which was well after the downturn began. Take a look at Chicago’s median home prices in February over the past four years:
- February 2011: $177,500
- February 2010: $176,500
- February 2009: $218,625
- February 2008: $290,000
This simple chart shows the devastating impact of the thousands of Chicago homes that have fallen into foreclosure or are being marketed as short sales. All these distressed properties have pushed the year-over-year median price down nearly 40% in just a few years.
Good news for Chicago home buyers: Lenders are finally starting again to offer loans with minimal down payments. Guaranteed Rate, for example, announced this week that it can now do conventional loans (not FHA!) with 3% down, provided the borrower has a credit score of 680 or higher.
This is especially good news for condo buyers, who have been forced to turn to FHA in recent years for a low-down-payment loan… but in Chicago, FHA and condos are often a lousy fit.
The trouble is, many first-time buyers can’t scrape up much cash to buy their first home. Ever since the real estate downturn led lenders to dramatically tighten the purse-strings in 2008, many buyers have been told to come up with at least 10% down. For hundreds of thousands of people, the only alternative was to use an FHA loan, which requires just 3.5% down.
This was all (usually) well and good if you were buying a house. But many first-time buyers in Chicago want a condo, and the vast majority of Chicago condos are NOT currently FHA-approved. Making matters worse, the FHA changed its rules last year to make it even more cumbersome to get condo buildings approved.
But now, buyers with good credit can avoid the whole FHA bottleneck and choose whatever condo they like — and still only put 3% down. This is great news for sellers, too, since it will smooth the path for buyers who may be interested in their homes.
It’s rare to find a vintage condo in perfect condition these days, exquisitely restored to accentuate its charm and yet updated for modern living. But I just listed one of these historic Arts and Crafts beauties in Edgewater, at a very reasonable price!
This 2-bedroom, 1-bath condo at 1355 W Rosemont Ave. has gorgeous original woodwork and crown molding throughout, along with oak floors and a working fireplace flanked by built-in bookshelves. It’s a corner unit, so it gets a lot of light from both northern and western exposures.
In addition to a warm living room anchored by the fireplace, there is a large formal dining room and a sunroom with new slate floors. I sold this condo to its current owners five years ago, and they have lovingly restored it, renovating the kitchen with new stainless steel appliances, a farmhouse sink and granite counters and painting every room in historic hues of paint meant to bring out the lovely wood trim.
You can check out more photos here. The condo is priced at $229,000 and it’s close to the Red Line, shopping and the lake. Please call me at 773-816-1788 if you’d like to see it.
Trying to make fast money by investing in Chicago real estate these days is like squeezing blood from a stone. But that isn’t stopping a few bold rehabbers from snapping up foreclosed houses, renovating them top to bottom, and popping them back on the market a few months later at double or triple the price.
I’m seeing this trend in otherwise sleepy neighborhoods like Irving Park and Albany Park, which boasts a lovely swath of vintage bungalows in its Mayfair area. Consider this renovated bungalow, located at 4839 N Springfield in Albany Park, which has 3 bedrooms (plus another one in the basement) and 3 baths. I chose this house as March’s Bungalow of the Month to call attention to the enduring phenomenon of house flipping.
The owner bought the house — a foreclosure — in July for $104,000, according to public records. It was a simple frame bungalow with white siding and black trim, being sold “as is” after spending three years on and off the market at steadily reduced prices.
Three months later, it was back on the market, totally renovated and set at nearly triple the price: $299,000. The exterior was now a soft gray with brown and white accents, the kitchen boasted dark (but plain) new cabinetry and stainless steel appliances, the floors had all been refinished and the walls repainted, the basement was finished with carpet, and the backyard now featured a new deck.
And the upgrades weren’t merely cosmetic. The house now had a new roof, HVAC system, siding and windows, electric wiring, and other improvements. There was also a new 2-car garage.
But the goal of any house flipper is to find a buyer, and in this case they have yet to do so. This bungalow has been on the market for five months now and the price has been cut twice, most recently to $259,000 last week. We will have to wait and see what the final sale price is to decide whether this was a wise investment.
Chicago is chock full of bungalows and other homes that are now languishing in foreclosure, or are trapped in a slow downward spiral as short sales. I see them in virtually every neighborhood these days, but they are especially prevalent on the South and West sides of the city. Even on the North side, you can find them in Rogers Park, Albany Park, Irving Park, Avondale, Portage Park, Jefferson Park… and the depressing list goes on.
I love bungalows, and I hate to see these historic homes abandoned and decaying. Now, this particular bungalow looks like it was stripped of whatever built-in bookshelves or hutches it once had, and it lacks a fireplace or any leaded glass windows. The new interior now has something of a generic, condo-ish feel and the finishes look like they came straight off the shelf at Home Depot. However, whoever bought and renovated this house did save it from a fate all too common these days in Chicago’s bungalow belt: utter neglect.
This spring, it seems that Chicago homeowners have gotten the message that housing prices have dropped considerably — and they’re not coming back anytime soon. As I meet with prospective sellers this month, I’m sensing a sober new attitude towards selling their homes. People are being realistic, thoughtful, even calm as they digest the latest sales figures in their neighborhood and decide on a reasonable price.
It’s a noticeable change from recent years, when sellers were apt to be more skeptical of the comps, and more insistent that their home must be worth more. Chicago home prices have been falling steadily for about five years now, with each year worse than the last, and at this point many of those folks who wanted to sell in 2007 and 2008 but kept waiting until the market recovered have finally concluded that a rebound could be years off. Do they want to keep waiting?
Some of them, the ones who really need to sell, are deciding to bite the bullet. I have four new listings on or about to hit the market, and all of the sellers know that they are not going to make any money on their sale. Three of them are listing their homes for less than what they paid four or five years ago.
While the circumstances vary, it’s not uncommon these days for people selling an ordinary, run-of-the-mill condo to lose $50,000 on their sale, when you factor in the commissions and closing costs. That’s why inventory in Chicago is so low right now — the month’s supply in January was 30% lower than it was a year ago. People who can’t afford to sell simply aren’t selling (or else they are attempting a short sale.) People who can afford to sell are, it seems, finally pricing their homes to actually sell them.
And deals are getting done. I just sold a house in Evanston last week… for about 10% less than the seller paid for it in 2004.
Chicago home prices slipped again in December, capping another dismal year for the Chicago real estate market. According to the Standard & Poor’s/Case-Shiller Home Price Index, average home prices in Chicago fell 7.4% in 2010. This is even worse than the 7.2% drop in 2009 (but not as bad as the 14.3% plunge in 2008.)
As a whole, the 20-city index has fallen 31.2% from its peak, according to data released this week. Average home prices in Cleveland, Detroit, Atlanta, and Las Vegas are now below what they were 11 years ago. Robert Shiller, the Yale economist who co-founded the index, said this week that he sees “substantial risk” that home prices will continue to fall — which would put Chicago (along with Dallas, Charlotte and Minneapolis) there, too. In Chicago, the home price index is already back to its March 2002 level.
Chicago condo prices, which until now have remained one of the brighter spots in our market, fared even worse in 2010. Condo prices fell nearly 12% citywide, substantially worse than the 8.7% decline in 2009 and the 7.3% drop the year before. The condo index has sunken back to its July 2001 level, making this a lost decade for Chicago condo prices.
But not everyone is lamenting. This is a fantastic time to be a buyer, obviously (if you have cash or can qualify for a loan!) Home buyers have their pick of some very choice Chicago real estate at what are now basically the lowest prices seen in a decade.
I’ve noticed that inventory is down, however — probably because so many home owners can’t stomach the idea of selling at these prices. Fewer people are listing their homes for sale than in recent years. Last week, for example, there were only 1,120 property listings in Chicago, compared to 1,552 a year ago. That’s a significant drop — 28% fewer listings in just one year. The decline means buyers have fewer properties to choose from, so the popular ones may actually attract multiple offers.
Check out my latest listing, a lovely 2-bedroom, 1-bath condo in the heart of east Lakeview, at the corner of Waveland and Pine Grove. It’s the ideal mix of vintage charm and modern upgrades, and it’s priced to sell at $235,000.
Located at 3702 N Pine Grove Ave., this condo is in a great neighborhood, about two blocks from the lake and half a mile to Wrigley Field. Right when you walk inside, you feel the warmth of the interior, which has beautiful wood trim and hardwood floors throughout. This property features a large living room with a wood-burning fireplace, a formal dining room, and an updated kitchen with stainless steel appliances. It comes with a private balcony as well as a rear deck, and the building has a roof deck as well.
You can see more photos here. It’s a lovely place, and unlike many vintage condos this one comes with a washer and dryer inside the unit.
Please call me at 773-816-1788 if you’d like to see this condo. At this price, it won’t last long!
Last night I was supposed to take some buyers house-hunting in Evanston, our third time out in recent weeks. With weather forecasters predicting a dire snowstorm, I checked in with my buyers earlier in the day to see if they still wanted to go.
At 11 am the answer was yes, but by 4 pm (once the snow had started swirling) we were all thinking better of it. I canceled our showing appointments and hunkered down with a mug of hot chocolate and some old episodes of “Friday Night Lights.”
But today, even with roads unplowed and alleys blocked and cars buried and schoolchildren home all over the vast city of Chicago, our real estate market is forging ahead. Yes, the Chicago Assn. of Realtors did close its offices today (as did @properties and other firms), but 333 new property listings nonetheless hit the market in the last 24 hours!
Blizzard of 2011 notwithstanding, many intrepid buyers (including mine) are making plans to go out looking again tomorrow, and some are even making offers. According to the MLS, 166 Chicago-area homes went under contract over the past day.
Among the fresh listings today are dozens of foreclosures, some of them deals that seem rather tempting. Take 1138 W Catalpa Ave. #D2, a 2-bedroom, 2-bath duplex-up penthouse condo for just $252,500. It’s in a relatively new (2003) building on the corner of Broadway, just a block from the Red line. Boasting a “great view of the city skyline,” this condo has a newer kitchen with Sub-Zero stainless steel appliances, granite counters and a large island; a 16×15 master bedroom featuring a wall of windows; and garage parking included in the price.
Is this a good deal? Originally priced at $447,000 in 2007, this condo has had a tough time of late: It’s been through four realtors and what looks like an unsuccessful attempt at a short sale, where it was under contract for most of last year before apparently sliding into foreclosure. But now, a price in the $250K range for a newer 2BR/2BA with parking in Andersonville? That’s hot enough to melt off some of this snow.
When will it end?
Not in 2010, apparently. The latest round of real estate data shows that Chicago home prices fell 5% to a median $199,250 in December 2010, compared to the same month a year earlier, according to the Illinois Assn. of Realtors. And substantially fewer homes changed hands: Chicago home sales (single family and condominiums) totaled 1,444 sales in December, an 18% decline from the 1,767 homes sold in December 2009.
The housing numbers look different, however, if you survey the entire year’s activity. For the year, Chicago home sales dropped only slightly; they fell 1.6% with 19,089 sales in 2010, compared to 19,398 sales for 2009. This stability was undoubtedly due to the giant pillar propping up the housing market all spring — the federal tax credits for home buyers. Once that artificial support was removed, both sales and prices plunged. For the year, Chicago’s median sales price fell 8% to $207,000.
“Buyers are finding value and opportunities in the marketplace and making long-term investments in real estate due to compelling pricing and low interest rates,” said Mabel Guzman, president of the Chicago Assn. of Realtors. “The median price for the city of Chicago in 2010 was $207,000, down from $225,000 the previous year, reflecting the influence of distressed properties in communities across Chicago.”
I’m beginning to hear both buyers and sellers ask the obvious question: Are we at the bottom? We could be bumping along it, I think. Across the country, the average home prices in major cities have fallen to their lowest point in many years, according to a recent New York Times story. The latest Standard & Poor’s Case-Shiller Home Price Index show home prices in nine of 20 cities — including Chicago — have fallen to new lows for this economic cycle. The Chicago index has slipped 7.6% from November 2009, with most of that decline happening since September.
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