Chicago Suburbs Real Estate Blog
THIS IS THE PLACE TO SHARE IDEAS ABOUT FINDING THIS SPECIAL, UNIQUE PLACE YOU CALL HOME. REAL ESTATE NEWS, RECENT HOME SALES FROM NORTHWEST SUBURBS OF CHICAGO, ILLINOIS AND MUCH MORE....
What is in your wallet?
NOVEMBER 5, 2010 Have you checked out your wallet recently? Now is the time – Federal Reserve Bank (aka Fed) decided to purchase 600 billion dollars worth of government bonds. So where are these cool 600 billion coming from? You guessed it – from a thin air. Or, rather from the printing press to be exact. In the next few months, there will be a ton of new money flowing into our economy. And, as everybody knows, if more units of something is available, the lesser each of these units (in this case – dollars) is worth. So, when you take another look at your wallet in 6 months, the same $100 may buy you less stuff, especially, if you plan to go overseas or purchase foreign goods imported into the U.S. Both are by the way, legitimate goals of “quantitative easing” as economists call this operation. Our central bank wants to both increase (!) inflation that is now around 1% a year, and depreciate U.S. dollar so American goods become cheaper overseas and foreign imports get less attractive here.
Fed cannot cut interest rates anymore so creating new money seems to be one of very few tools still left available. Some even say, the tool of last resort…
Home sales in Illinois continue to decline
OCTOBER 25, 2010
llinois Association of Realtor (IAR) released today its latest report on home sales in September.
"In the Chicagoland Primary Metropolitan Statistical Area (PMSA) in September total home sales (including single-family and condominiums) reached 5,327 homes sold, down 5.4 percent from August’s total of 5,632; sales were down 22.4 percent compared to 6,862 homes sold in September 2009. Year-to-date sales remain up 10.5 percent January through September 2010 with 54,619 sales compared to 49,424 home sales for the same period in 2009. The median home sale price for the Chicagoland PMSA was $175,000 in September 2010, down 12.1 percent from $199,000 in September 2009. Year-to-date, the median home sale price is down 5.5 percent to $189,000 from $200,000 for 2009"
Both slower sales and continued price declines in September suggest that no self-sustained real estate recovery is possible without significant job growth.
Inventory of bank owned homes is shrinking
OCTOBER 17, 2010
Last week Fannie Mae (FNMA) ordered a large number of their listings to be removed from the market. The supply of foreclosed homes was reduced by over 100 listings. All these homes are now investigated for the possibility of flawed or missing paperwork. In some cases, even pending closings had to be put on hold for up to 60 days. It is the latest sign of the unfolding foreclosure drama that started a week ago when four major banks discovered that tens of thousands of foreclosure cases had been rushed through the system without due process.
With new foreclosures halted and existing bank owned properties being pulled off the market, the inventory of so called “distressed sales” is posed to shrink significantly in the coming weeks and months. Will that be a chance for regular sales to pick up? In my opinion, instead of seeing more sales of privately-owned homes, we will rather see a significant decline in overall sales caused by limited supply of low-priced foreclosed homes.
Home sales in Illinois continue to decline
OCTOBER 7, 2010
What started as a curious case of one bank employee who admitted he used to approve thousands of foreclosure cases every month without even reading most of them, now turned into a nationwide scandal involving possibly hundreds of thousands of homes in the process of foreclosure. Three major banks: J.P. Morgan Chase, Wells Fargo, Bank of America and GMAC all announced a temporary halt on foreclosures while the extent of “flawed paperwork” is being investigated. It is widely believed that banks have been so overwhelmed by the ever rising number of foreclosure cases, that they had to cut corners and forced their employees to “robo sign” thousands of documents without making sure they meet standards required by the law.
This practice must have been so widespread that Congress in an unusually expedited manner voted a bill that would make foreclosure documents that meet legal standards in one state, exempt from verification procedures in any other state that requires court approved foreclosure proceedings. This bill now faces a veto, since President Obama doesn’t want to make it easier for banks to bypass state laws regarding proper verification of foreclosure cases.
The extent of this scandal is not fully known and every day brings new developments. Many banks in addition to halting pending foreclosures, are also removing foreclosed properties from the market fearing their documents are so flawed that no title insurance company would cover them, once sold. One of those companies - Old Republic Title is said to refuse insuring properties from banks who announced moratorium on pending foreclosures. It is almost certain that the number of foreclosures coming to the market will slow down in the next weeks and months. The enigmatic “shadow inventory” of foreclosed homes that are not yet listed for sale, will grow even more. As a result, it will take even more time to clear all “distressed home sales” from the market and clear the way for home values to grow again.