The last 3 months have seen the following activity on homes between $1,200,000 and $ 2,500,000
Total Under Contract
The average number of properties closed/per month is 48/3, or 16.
That means the current ACTIVE inventory on the market (137)
is 8.6 months’ worth –
an OVER SUPPLY!
Looking at it further, we see the following breakdown by neighborhood over the last 3 months:
In my total market area (south loop to Edgewater),the inventory of single family homes is rising.
Number of New Listings for Sale
Meantime, the number of closings is declining.
Number of New Closings
Below is the chart for single family inventory in the total market area. The figures supplied by MRED include 12 month sales figures. The trend looks less alarming because we’re just in the beginning of the slow down, and the 12 month sales figure used to calculate inventory is a broader perspective than the 3 month number used above.
Inventory of Single Family Homes
Based on Last 12 months rolling calculations
So what does this mean for you?
If you’re a single family homeowner that needs to sell,
then you may want to consider pricing your home more aggressively
If you’re a single family home buyer,
it’s a perfect time to get in the market- rates are low and it’s become a buyers’ market for single family homes in Chicago!
If you’re on the sidelines… think about your long term goals…
waiting to sell may NOT be a good move if you expect interest rates to rise (as do most consumers), prices to stagnate. There may be fewer buyers in the market when you finally go on the market.
If you’re planning on downsizing, and you think the economy is not going to significantly improve after the election, then now may be a good time to be realistic and put your home on the market.
Make sure your interest rate is locked in for a year or two MORE than you plan on staying in the home. Should you consider refinancing?
For a quick look at what your home’s worth, select this link:
Home Valuation – Emailed Directly to your Inbox
To find out more precisely what you can expect if you were to sell,
How’s the Chicago real estate market? How are single family home sales in the 60640 zip code of Chicago? Often, we track by neighborhood – Andersonville, Lakewood Balmoral, Edgewater, Uptown… For this article, I’d like to use 60640. It incorporates the southern Edgewater/Northern Uptown/Eastern Lincoln Square Neighborhoods, and I think it makes sense for single family home buyers who’re looking just north of Lakeview and Lincoln Park.
And, to see a SNEAK PEEK home tour with interior photos of homes currently for sale,select this link!
The market time for selling a home in 60640 is lower than the any time in the last 6 years. Right now, homes average 69 days on market.
Median Sales Price
Median sales prices are up! The highest median sales price recorded in this area was $740,000 – achieved both in April and October of 2009 (yes — higher than in 208!). Last month, sales hit $727,500 — 60640 has come back strong!!!
Yes — inventory is LOW! That’s what’s helping to drive prices up, of course. Lots of traffic and demand, but little inventory. In August, 2009, 13.9 months of homes were on the market. For the last 12 months, there have been less than 3 months worth of homes on the market – compared to a “stable” market of 6 months.
What this means for you…
If you’re buying –
Pick and choose your home carefully. It’s not the percentage off list price that matters, but the price you pay compared to the 3 most similar recent sales within 1/2 mile of your house.
Use property alert systems to see when homes go on the market – be ready with your mortgage pre-approval ready to go.
Don’t wait, as much as you may be afraid that the good values are gone… THEY’RE NOT! Appraisers can’t make you pay OVER the value – prices may be inching up, but they’re still great in general.
Pick an UGLY house! Homes that need a little cosmetic care – new carpet, paint, kitchen makeovers go for much less than shiny new pennies. Check out IKEA hacks for ways to cleverly redo a kitchen – a little “sweat equity” goes a long way to improving your investment!
Interest rates are still LOW, and they’re projected to rise. Since your monthly payment is largely due to the interest rate, take advantage of buying TODAY if at all possible.
If you’re selling –
Pricing Notes: You still need to price your home AT the market, not over. This is critical for 2 reasons:
1. The appraiser will only allow the bank to loan based on appraised price, not the amount you hope to get (or a buyer is stupid enough to offer). As they say, pigs get fat and hogs get slaughtered! Enticing a buyer to overpay by a large amount only results in cancelled contracts, angry buyers, and longer market times because the property has to be re-listed.
2. By pricing AT the market, you may get buyers into a bidding war. This gives you a chance to get not just a great price, but a chance to negotiate the terms of your contract – the closing date you want, a quicker inspection time, and fewer requests for credits after the inspection. A happy buyer makes for a smooth transaction!
3. Pricing your home at a fair market price means your home will sell quickly. I just sold a home in Sauganash where the sellers thought they’d have to get rid of the family bunny to stage their home. They were on a waiting list to give the bunny away, but VOILA! We sold the home in one day, to very excited buyers. While bunny went on a weekend visit to Michigan, she’s now safely ensconced back home and blissfully waiting to move to her new home. Selling quickly can save lots of headaches!
Realistic Expectations: Don’t think that everyone will buy your home just because there are fewer properties on the market. Today’s buyers are savvy and educated. Every property is different, and like always, the first 3 weeks your home is on the market is CRITICAL. If it doesn’t sell then, have a serious talk with your agent – something is wrong. If you don’t get a contract in the first 3 weeks- your price is wrong, you’re not well staged, or something else is preventing you from enjoying a successful sale. In this market, if a home’s still available after 60 days, buyers think something is tragically wrong with it, and they may avoid even showing your home.
Here’s a list of homes sold in the 60640 zip code during the 3 months ending August 17, 2014
In order to answer the question, we need to know how much it costs to live there, and then based on the current interest rates, determine monthly costs. From that, we can figure out how much income one needs to purchase this mythical condo.
I did research on 1,2, and 3 bedroom condos in Chicago’s Near North (8008), Loop (8032) and Near South (8033) neighborhoods, and I discovered the following:
One bedroom sales have increased between 20% and 36% in the 3 neighborhoods
Average taxes range between $ 3364 and $ 3723 per year.
Average assessments range between $ 445.39 (South Loop) to $ 590.26 in the Gold Coast.
Cost to Live in a One Bedroom Condo
Let’s determine the monthly cost of one of these one bedroom condos.
Purchase Price: $ 230,000
Down Payment: $23,000
Interest Rate: 4.5%
Debt Ratio 28% of Gross Income
Monthly Payment Resulting from these assumptions:
Principal and Interest: $ 1841
Taxes: $291.67 (or, $ 292)
Gross Monthly Payment: $1841
Annual Tax Savings for Federal and Illinois: $3254 (from Bankrate.com)
Net Monthly Payment (not including property tax savings): $1569
What do you have to Earn To Afford This Purchase?
Lenders usually allow for more debt than this, but when I first became a Realtor in 1987, the 28% rule was always followed. (Part of why we got into trouble in 2008 was our relaxing of this 28/36 debt ratio.)
28% debt ratio means that the gross monthly payment can be no more 28% of the gross monthly income.
For this example, $1841 / 28% = $ 6575 per month.
Annual Income Required: $ 6575 x 12 = 78,900.
Two Bedroom Condos –
Loop, Near North, Near South
Three Bedroom Condo Prices –
Loop, Near North, Near South
Want to Learn More about condos in the Loop, Near North, or Near South Neighborhoods?
Are you ready to begin the first steps toward owning a condominium in Chicago?
If Congress doesn’t act on the Mortgage Forgiveness Debt Relief Act, which expires at the end of this year, it could leave distressed borrowers with an additional financial burden in 2014.
The measure was designed to keep underwater homeowners from having to pay income taxes on the portion of their mortgage debt that was wiped out in a short sale or other mitigation tactic.
“What you’re looking at is people who have lost their house,” says Marceline White of the Maryland Consumer Rights Coalition. “And then to have them hit with this [tax] just boggles the mind.”
Maryland legislators plan to renew a measure exempting residents from state taxes even if the federal law sunsets, but few other states have similar protections in place. There are three bills on Capitol Hill seeking extension of the federal law, but it is uncertain how much of a priority the issue will be in Congress next year.
“We’re far from out of the foreclosure crisis,” White warned. “We hope that policymakers look at longer-term solutions.”
Wondering when you should get in the Chicago real estate market?
THERE’S NEVER BEEN A BETTER TIME TO BUY!
Whether you’re buying for the first time, selling and buying, or downsizing ….
NOW IS THE TIME TO MAKE A MOVE!
Interest Rates Rates are the lowest in over 30 years — Freddie Mac reported September average rates at 3.38%!
PRICES Prices have stabilized – in some places, they’re reporting increases. Yes, prices dropped between Jan 2008 and July 2011, but prices are now showing a stabilization.
This chart shows average prices on condos/homes on Chicago’s North Side:
CONSUMER CONFIDENCE/OPTIMISM Consumer Confidence is up again in November – 3.8%, but here in Chicago, properties are flying!
Inventories are low – while at one time, condo listings represented 24 + months of inventory, today there are only 3.8 months’ worth of units on the market. (Lenders use 6 months as a benchmark for determining market health.)
On a personal note, I have been helping clients find investment property. We are having to put in offers immediately – 6 properties have sold within a week, sometimes with multiple offers.
Don’t wait to read this in the newspapers – by then it will be too late to take advantage of the opportunities
Expect the following:
Declining inventories between now and Feb 2013
Increasing demand around Feb 2013
Mar-May 2013 — prices will rise & inventories will remain low — but where will interest rates be? Ad 1% difference on a $250K loan means more than $49K in payments over the life of the loan (and $1647.48 more per year!)
If you’re thinking about buying or selling, call or email me right away!
Need to Find a home in one of the Chicago Neighborhood Elementary School Districts?
Search for homes in the districts most often requested by buyers over the last year:
This township is located from the Chicago River to Fullerton ave (2400N) and west to the Chicago River North Branch. (Lakeview and Jefferson townships have already gone through their reassessment and appeal periods.)
After the recent teachers’ strike, it’s more and more likely that Chicago taxes will be going up – the question we each need to ask ourselves is, ” How do I limit my risk for higher expenses?” One thing homeowners can do right away is file a property tax appeal!
The sales prices for the properties in North Chicago declined by 5+%, but homeowners should still take advantage of the opportunity to file an appeal. Your assessed value may go down, but it may not have declined by 5.3%. Or, even if it went down by 6%, you might still be assessed for more than you should – NOW IS THE TIME TO INVESTIGATE!
2011 Median Sale Price
2010 Median Sale Price
2009 Median Sale Price
Median Current A.V.
Median Prior A.V.
Median % Change
Median A.V. Change
Appeals can be handled one of two ways:
Do it yourself! Appeals can be filed online by selecting this link. If your property is incorrectly categorized, or if your assessment is higher than your neighbors’ comparably priced home, then it should be a fairly simple process.*
Hire an attorney. Many attorneys work on a contingency basis – they will take a portion of your first year’s savings as remuneration. This means you can appeal without having to pay someone “out of pocket” to do the work on your behalf.
If you would more information about you particular case, contact me – send your requests via email to Anne@Rossley.com.