Chicago Real Estate Blog

More about Tax Credit fomebuyers

2010-04-13T10:09:00.000-07:00

You heard it right: the program that's paying first time homebuyers AND those who purchase their replacement home, is set to expire in less than 3 weeks. Here are some facts about it:

Credit amount up to $8,000
For any home purchase where a sales contract is signed by April 30, 2010 and closes by June 30, 2010
Available on single-family detached homes, townhomes and condominiums
The tax credit does not need to be repaid unless the home is sold within the first three years after purchase

This program will NOT be extended anymore so if you think of buying a home, you need to start acting now. Please contact us!

Short Sales made easier under HAFA program

2010-04-07T21:11:00.000-07:00

On Monday, April 5th, Obama administration released new federal program meant to prevent more foreclosures in the U.S. Under HAFA (Home Affordable Foreclosure Alternatives), homeowners who are unable to retain their home, will get help with short sale process.

The program allows borrowers to receive pre-approved short sales terms before listing the property (including the minimum acceptable net proceeds and acceptable closing costs).It also requires borrowers to be fully released from future liability for the first mortgage debt (no cash contribution, promissory note, or deficiency judgment is allowed). HAFA also provides financial incentives: $3,000 for borrower relocation assistance; $1,500 for servicers to cover administrative and processing costs; and up to a $2,000 match for investors for allowing a total of up to $6,000 in short sale proceeds to be distributed to subordinate lien holders.

courtesy: National Association of Realtors Government Affairs Division.

Good News about Jobs (Finally!)

2010-04-02T07:13:00.000-07:00

U.S. economy added 162,000 non-farm payrolls in March 2010. That was most jobs added in the last 3 years. The total of jobs added includes 48,000 of temporary 2010 Census hiring. The unemployment rate stayed unchanged at 9.7%.

This graph shows the unemployment rate and the year over year change in employment vs. recessions (courtesy of calculatedriskblog.com). Click for large image.

In Chicago, food lines start to form

2010-03-31T13:49:00.000-07:00

Economic rebound may be on its way but for some welfare remains the only option. This line started early in the morning at one of the non-for-profit organizations in Chicago.

Doing a short sale and your FICO credit score

2010-03-23T09:20:00.000-07:00

According to Rex Johnson, founder of credit union consulting firm Lending Solutions Consulting, a home foreclosure, for example, might dock about 200 points off your score and a short sale could cost you around 80 to 90 points, said Johnson. Declaring bankruptcy could lower a good score of 750 by up to about 250 points. You can find entire article here.

Home prices in late 2009 showing some weakness

2010-02-01T20:34:00.000-08:00

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Recently released report published by Standard's & Poor Case/Shiller confirms that home prices in 20 metropolitan areas mostly dropped in November 2009. Only 4 cities recorded modest gains while the the rest of metropolitan areas saw annual decreases in home values from -13.2% (Tampa, FL) to -0.6% (Washington, DC). The table below shows changes in home values between September and November 2009.

In Chicago area, the difference in home values between November 2008 and November 2009 was -8.5% while last both October 2009 and November 2009, each recorded steady 1% decrease. The graph below shows home values in Chicago area over the last 4 years.

Low mortgage rates will not last forever

2010-01-06T19:57:00.000-08:00

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As long as Treasury is buying mortgages guaranteed by Fannie Mae and Fredie Mac, mortgage rates will remain near historic lows. Federal government is virtually the only purchaser of this type of securities, since private investors ran for cover in mid 2008 and never came back as viable players. If not for the Fed, there would be very few takers for financial products backed by US mortgages. Most of the experts predict that Treasury will gradually withdraw from buying large amounts of mortgage backed securities some time in 2010, most likely in 3rd and 4th quarter. So what happens when Uncle Sam stops buying our mortgages? Most likely the private banks that will replace federal government on the secondary mortgage market will charge much higher interest rates based on current (uncertain) economic situation.

Zillow releases 3rd Quarter Home Values

2009-11-20T05:48:00.000-08:00

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The popular home valuation website - Zillow.com recently released its data for the third quarter of 2009.

Zillow Home Value Index

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More Illinois Home Values

Overal, in the last 12 month, the average home value was $172,400, 10.2% less than in the same period of 2008. Chicago metro area homes lost 10.9% and Arlington Heights - 9.8% with the average home value at $290,000, down $85,000 from the peak of late 2006.

Is the Water still Cold?

2009-11-07T21:13:00.000-08:00

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Summer is long over but I still remember my younger daughter sticking her toe into the calm waters of Lake Michigan to check if the lake’s temperature is finally good enough for her to jump in. That in turn resembles the behavior of so many home buyers waiting for the prices to bottom out. Is the market still going down? Is real estate still getting cheaper and cheaper? Will the continued unemployment force more foreclosures and devaluate home prices even more? Nobody knows answers to these questions - all we can do is watch the market and the prices of homes that recently got sold, in increasing numbers. I spent last 9 months “in the field” – showing homes, making offers, negotiating deals and, so often, losing them to other buyers. A year ago, it was almost unheard of that a house would sell over the asking price with 3 or 5 competing offers. Just within the last two months I experienced this scenario at least once a week.

Not all homes sell like that, only the “great deals” homes: no major repairs required, in good location, and at unbelievably low prices. So low that prospective buyers were happy to offer up to 10% ABOVE the asking price, just to get the home under contract ahead of others.

So, are there still people who think that home values will continue to drop? Yes, there are – they are still waiting for the prices to be “just right” – in 6 months or even a year from now. Waiting, however, is over for so many others who are actively seeking the great deals that are available here and now. They are enjoying huge price reductions, good quality homes, and low interest rates on mortgages.

My daughter’s friends had a long and joyful summer vacation. They did not wait until the water’s temperature was just perfect. They jumped right in and never regretted it. This is what I wish most of undecided home buyers did. Here and now.

Get a sample of Chicago suburbs foreclosures at www.ChicagoSuburbs-Homes.com

Foreclosures in Melrose Park - Back on the market

2009-11-05T15:07:00.001-08:00

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Haunted Houses

2009-10-28T10:32:00.000-07:00

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There are houses that are really scary. Not because of the ghosts, monsters or other surreal creatures. The reason for fear is very real - foreclosures. There are entire streets that have only half of houses still occupied, other owners have either left voluntarily or have been kicked out of their homes. They left behind overgrown yards, leaky roofs and boarded up windows. Some of them even left behind their belongings as if they were expecting ghosts to use them at Halloween...

Learn more about Chicago suburbs foreclosures at my website: www.ChicagoSuburbs-Homes.com.

Nationwide Home Prieces on the Rise

2009-10-27T10:20:00.001-07:00

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The Standard & Poor's/Case-Shiller home price index of the largest U.S. metro areas was released today. The index shows another slight increase (1%) of home prices in August 2009, compared to the month before. Still, the median home price in the U.S. is 11.4% down from August 2008.

In Chicago metro area, home prices in August were 1.7% higher than in August and 4.4% higher than in July 2009.

Some experts signal though that the mounting pressure from the distressed homes market, particularly Chicago foreclosures (also, foreclosures in Chicago suburbs), will soon drive the prices back down, or at least make them flat for another 6-10 months.

Illinois Unemployment Data

2009-10-21T13:07:00.000-07:00

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High unemployment we experience in Illinois contributes directly to the high rate of foreclosures in Cook County and most of Chicago suburbs. Not all counties were affected by unemployment (and foreclosures) the same way. Please take a look at the map that is published as per US Bureau of Labor Statistics.

Unemployment in the entire state of Illinois was 10.5% in September 2009 but certain counties, located outside of Chicago area, were well above the 12% rate.

Uneployment Rate in Cook County continues to decline

2009-10-07T08:32:00.000-07:00

The jobless rate in the entire U.S. seems to be flat but locally we can observe a very positive trend, especially in large metropolitan areas like Chicago. Cook County, Illinois saw a 1.5% drop in unemployment between June 2009 and September 2009.

The graph above shows a sharp rise in unemployment rate from May 2008 to June 2009 follow by equally significant decline in the 3 months that followed. Still, Cook County, Illinois has the jobless rate almost half percent higher than the average for all of the United States.

September 27th Foreclosure Report

2009-09-29T21:27:00.000-07:00

(click above for larger view)

In the week ending on Sept. 27th. there were 13 bank owned single family homes sold and just 3 that entered (re-entered) the real estate market in northwest suburbs of Chicago.

Mortgage Applications on the Rise

2009-09-28T20:27:00.000-07:00

Mortgage Bankers Association reports that the number of mortgage applications last week was almost 13% higher than a week before. Most of that increase were filings for government-insured loans like FHA. In general, government-insured mortgages made up 45.7% of all purchase applications last week - the highest proportion since November 1990.

Government sponsored loans are especially attractive to first time homebuyers who are rushing to take advantage of the last weeks of homebuyer tax credit that runs through November 30th.

Weekely Foreclosure Report

2009-09-24T20:30:00.000-07:00

(click for larger view)

Last week the foreclosure activity was high. 4 single family houses went under contract (sold) and 6 more entered the market. The following houses were listed in MLS since September 13th:

What's next for Randhurst?

2009-09-22T21:03:00.000-07:00

Once one of the larges shopping malls in the world and a true pride of Chicago suburbs – Randhurst Center, has been reduced to a few stand alone stores and a humungous hole in the ground. The crews just completed the demolition of the 1960’s marvel of commercial architecture. Left alone is the main gate which now leads nowhere… New Randhurst Village - a new lifestyle center incorporating retail, hospitality and residential components is scheduled to open in 2011.

COPS action in Arlington Heights

2009-09-17T13:55:00.000-07:00

Most people consider Arlington Heights to be a middle class, safe neighborhood. That wasn't the case on September 17th, when an armed and dangerous fugitive managed to escape while being transported to a courtroom. The fugitive is a 39-year old man suspected for bank robbery. He took guns from the escorting officers, switched clothes, hijacked a car at a gunpoint and hid himself in the apartment complex by Algonquin and Goebbert Rd in southwest Arlington Heights. All schools in the area are under lockdown.

This is a developing story. More details soon! You can also check out my twitter feed.

photo courtesy of WGN News

September 12th Weekely Foreclosure Report

2009-09-13T13:19:00.000-07:00

Is spite of the shorter business week, the foreclosure activity was high after Labor Day. 8 single family houses went under contract (sold) and 11 more entered the market. The following houses were listed in MLS since September 7th (click for larger view)

These homes are priced 50% to 70% below similar properties sold in the last 3 years. Some of them can be purchased now with just 3.5% down payment and even if your credit score is below "prime" score. Please contact me for more details.

Stay tuned to my next week's report that will be in your mailbox on Saturday, September 18th. In the meantime, you can read more on my Chicago Suburbs Foreclosures website or if you have any questions, please contact me at pkedzior@sbcglobal.net

Standard & Poor's/Case-Shiller's vs. National Association of Realtors

2009-09-03T18:40:00.000-07:00

In the recent days two home sales reports were published that in my opinion totally contradict each other. The first report comes from the Standard & Poor's/Case-Shiller's U.S. National Home Price Index which in the second quarter of 2009 recorded the first rise in home values since 2006. The other report is from the National Association of Realtors (NAR) that reported that one-third of all home sales over the past few months were either a foreclosure or a short sale. How can you reconcile those two reports? A third of all homes sold on a fire sale maks the property values climbing?

The other side of short sales

2009-09-01T19:00:00.000-07:00

Home values are plummeting and for some selling the property for less than owed to the lender may be the only option to avoid foreclosure. Many banks agree to write off large portions of the original mortgage enabling the new owner to take possession of it.

In some cases, closing doesn’t end the seller’s liability. Some reports indicate that the distressed seller is receiving a “bill” for the unpaid amount on his loan that he may have mistakenly believed was forgiven. While the mortgage (or the security interest in the property) was released, perhaps the unpaid balance on the note (the loan) was not. The short sale seller might not have gotten a copy of his note marked “paid in full” or some other document indicating that the balance on the loan has been forgiven by the lender. So maybe agreeing to the low ball offer presented by the first available buyer wasn’t such a good deal after all? Maybe another buyer would had been willing to purchase the property at a higher price thus reducing any deficiency he might owe to his lender? These transactions can become very fuzzy very quickly especially in situations where there is an “investor” or “intermediary” in the middle.

It is very important to be clear as to the fact, that deficiency judgments are a real possibility when a lender may seek the distressed seller to cover for the unpaid amount on his loan.

Existing Homes Sales Boosted by Foreclosure Deals

2009-08-21T07:56:00.000-07:00

Increased number of foreclosures available at deeply discounted prices caused July 2009 home sales in Chicago suburbs to rise to levels not observed in almost 10 years. The encouraging factor is that a lot of homes were sold to first time home buyers, not just savvy investors taking advantage of deflated home prices. The government tax credit is playing an important role here and, as most involved in real estate hope, will continue to boost sales of existing homes throughout the fall season.

While foreclosed homes sell fast, the inventory of privately owned real estate remains high. Some condo projects (as in this Rolling Meadows, IL subdivision) have over 10% of units listed for sale and very few of them changing hands, except for foreclosures and short sales. Some buyers even refuse to look at any other properties, just waiting until the “right deal” comes along.

All types of distressed sales have been deflating prices of homes in Chicago suburbs at 10-15% annually and as long as the supply of bank foreclosures is steady, nobody really expects homes to gain value any time soon.

Increadibly Cheap Bank Owned House

2009-07-10T10:07:00.000-07:00

Just look at this price! Large house with 2 bathrooms and a basement, lots of parking space. Great deal on foreclosures in Maywood, IL

3BR/2BA Single Family House offered at $27,500!

Nobody will believe you if you get this deal! ***PRICE***PRICE***PRICE***. So much potencial! This home is perfect for large families. Why pay rent if you can own a piece of American Dream? Remodeled in 2004/2005 this house features an oversized lot, long driveway, enclosed porch and full basement. All room and room sizes are approximate. Please verify for yourself when at property.

For more bank owned properties in Chicagoland, please visit our northwest Chicago foreclosures website .

218 S. Broker Ave., Itasca, Illinois

2009-06-29T20:53:00.000-07:00

Bank foreclosure - solid construction - newer ranch (built 1965) with basement and second kitchen. One of best deals on foreclosures in Itasca

3BR/2BA Single Family House offered at $170,500

Desirable All Brick Ranch located in a quiet residential area. Features include country kitchen and large rec room. This 3 bedroom and 2 full bath home is ready for you to move in and enjoy. The summer kitchen in the lower level is great for cooking on hot summer days. The fabulous 2 car garage is an added plus. Come see today! Large patio. Closed to park, shopping and METRA train station. Sold in "as is" condition. Bank owned.

For more bank owned properties in Chicagoland, please visit our Chicago suburbs foreclosures website .