Chicago Real Estate Blog

Home prices in late 2009 showing some weakness

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

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 .

Are Multiple Offers Back?

2009-05-01T23:11:00.000-07:00

Are the old, good days back? The days of scarce “deals”, anxious buyers and multiple offers? Well, not really, at least not for the most homes on the market. There are however listings that are highly sought after. Almost all of them are bank-owned properties, oftentimes listed well bellow the comparable homes in the area. As we all know, the prevailing opinion among today’s home buyers, is that the real estate prices are so much deflated and sellers so anxious to get rid of their homes that basically any offer would "fly", will be considered, counter-offered and, finally – lead to a sale. As it turns, it’s not necessarily the case with the hottest listings on the market, especially - REO properties. These homes are hot bargains and buyers are very much aware of that. There are plenty of people on the lookout for them almost everywhere.

A few days ago I had a buyer who was interested in one particular condo subdivision. For over 2 months none of the homes there came even close to his target price. When finally a REO condo was listed, within 48 hours my client put an offer at about 20% below the list price. Next day we learned that there are 2 other offers on the table and that my client was not the highest bidder. We are now again on the lookout for a condo there. This time my client has learned his lesson and is prepared to make an offer that would be at, or very close to, the list price.

Times are changing and we will see more and more bargain hunters. These leveraged buyers are necessary to bring some stability to the real estate market and reduce inventories. The number of foreclosed houses and foreclosed condos is still on the rise. Foreclosed houses and condos represent at least a half of all sold properties this year. More bargain hunters are still needed!

Foreclosures - Blessing in Disguise?

2009-04-19T11:05:00.000-07:00

Everyone knows how dramatically prices of homes have been falling in the last 2 years. Some estimates indicate that an average American home lost 25-30% of its peak value. The recent wave of foreclosures makes price declines even more acute. For home sellers, having a bank foreclosed property in the neighborhood is their worst nightmare since this type of homes sell from 20 to 40% below the area average.

On the other hand, in times of tight credit standards, more and more homes become available again to first time buyers who would not afford jumbo loans. Foreclosures play important role in the market correction and when it finally reaches the bottom, it will be much easier for a greater number families to afford their first home. Sure, thousands of other families will loose their homes by then, but greater affordability will result in even more people being able to buy real estate property.

Foreclosures have yet another positive effect on our industry - they make people excited - again! Everybody likes a good deal and foreclosed properties are exactly the type of deals some home buyers just can't refuse. In certain price ranges, foreclosed homes make up to 50% of all sales in the area. They act like a magnet for those buyers who were just sitting on the sidelines and waiting for better times to buy a home. In Illinois, foreclosures are on the rise. Recently, my office listed a foreclosed home in Glenview that once was appraised at $1,100,000 and now is listed at $639,900. That's more than $450,000 in depreciation! Please visit our website where you can see the list of foreclosed houses for sale in Cook County. All of you bargain hunters - get ready!

More time for home owners facing foreclosures in Illinois

2009-04-05T20:26:00.000-07:00

Illinois governor Pat Quinn approved the legislation that grants additional 90 days to people facing foreclosures. The new law gives home owners the right to credit counseling and creation of a payment plan to get out of the foreclosure proceedings. Together with President Obama's Affordability and Stability Act of 2009, this move is meant to stop the rise of foreclosures that expert predict, could soon reach in Illnois the 100,000 mark.

Foreclosures hurt home sales in every area of Cook County. Almost every neighborhood has one. On the other hand, foreclosures in Arlington Heights is the hottest group of properties home buyers are after these days.

If you think U.S. economy sucks, think twice!

2009-03-23T12:40:00.000-07:00

Spring is officially here and it brought new hope to a number of counties around the world, especially those hit hard by the current recession. Last winter was probably the most difficult to bear in Island. This small country between Europe and America has not only a very cold climate, but is also now in a middle of economic crises of catastrophic proportions.

The failure of the country’s biggest banks in October 2008 eliminated more than two thirds off the value of the local currency last year and pushed inflation to almost 20 percent while sending unemployment to a record high.

The outlook for the rest of this year is grim. Experts predict a 10.5 percent economic contraction (!!!) which in turn, may help contain the runway inflation. You can learn more about economic troubles of Island on my favorite economic blog – Planet Money.

In this country we face a rising wave of foreclosures after a number of self-imposed foreclosure moratoriums ended last week. Buyers take advantage of extremely low prices not seen on real estate market for a decade or more. You can see a number of foreclosed houses, foreclosed condos and other bank owned properties in Cook County by visiting www.arlingtonheights-realestate.info

Walmartization of Real Estate

2009-03-08T08:21:00.001-07:00

In the recent surge of bad economic news and bad corporate earning, Walmart emerges as one of very few companies to stay stable during the recession and even make some healthy profits. Obviously, price driven consumers see the value in $9.99 toasters and $8.99 pairs of jeans. Bargain hunters are also prevailing on the real estate market. The average home sales price in Chicago metro area dropped significantly in February 2009 with huge discounts put on bank owned properties. In Chicago suburbs deals likes a $20,000 condo or a $99,000 house is what really brings buyers to the market. Some properties even receive multiple offers and sell in less than 2 weeks. Is this a start of a long awaited recovery on real estate market? Quite likely so. Especially that the word of cheap deals on condos and incredible prices on both investment and live-in properties, travels fast and more and more people get interested in buying a home again. As for now, real estate agents will have to learn to live on a “minimum commission” level that most of these cheap deals offer. After all, a typical payment from a $20K sale is almost on a “poverty” line. But what starts small, hopefully will end up large. Some day.