Waiting for the Bottom?
It May Already Be Gone.
Homebuyers trying to time the real estate market today may think they have it down to a science. They watch the news, read the papers, hear that prices are dropping, and assume the bottom hasn't arrived. So they wait.
There's just one problem. The bottom - at least the bottom for interest rates - appears to be gone. And it just so happens that interest rates are a very powerful determinant of how much home you can afford and what you'll pay each month - even more powerful, in some instances, than price.
Conforming 30-year mortgage rates are already a half-point above their October lows, clocking in at 4.625% heading into the second week of December. This is consistent with the Mortgage Bankers Association's (MBA) prediction that the average rate on the 30-year loan will increase to 4.7 percent in the first quarter of 2011, and could reach 5.1 percent by the end of next year. Meanwhile, a recent forecast by the University of Chicago Booth School of Business predicts that Chicago home prices will remain near their current levels, while the U.S. economy will enjoy stronger than expected growth in 2011.
In Illinois, the economy is fighting its way back. State unemployment has gone down for seven consecutive months, and a great start to holiday shopping indicates consumer confidence is on the rise. While the Fed has stated its intention to purchase an additional $600 billion in Treasury securities, the MBA says this move is priced into current rates.
It may be hard to believe, but in the long run it makes more financial sense to buy a home at a higher price with a lower interest rate than vice versa. So instead of trying to time the bottom for prices, get the best interest rate you can on a mortgage and home that's right for you.
For more information on how interest rates affect purchasing power, please feel free to contact me. And please remember that I'm never too busy for your referrals.
Interest rates can impact your payments and purchasing power more than the price of a home.
Monthly principal & interest per $100,000 borrowed
4.25% $492
5.25% $552
Loan amount with $2,000 monthly principal & interest
4.25% $406,000
5.25% $362,120
Courtesy of Guaranteed Rate
Dave Straub
@properties
(773) 255-3180
Saturday, December 11, 2010
Sunday, December 5, 2010
When Home Prices Will Head Up
Property values are still drifting down, but look for relief at the end of 2011.
By Pat Mertz Esswein, Associate Editor
From Kiplinger's Personal Finance magazine, January 2011
The lowest mortgage interest rates in almost 60 years, plus affordable homes in cities where buyers had been priced out for years, should be turning the housing market around. But the market also labors under some heavy burdens: a glut of foreclosures that are dragging down home prices, high unemployment and tight credit. Sales fell off a cliff after the home-buyer tax credit expired. And “foreclosure-gate” -- legal squabbling about the process used to repossess many homes -- postponed the sale of many foreclosed properties and struck yet another body blow to confidence in the housing market.
For the four years beginning with the downturn in mid 2006, the median price of an existing home nationwide fell by 27%, or 7.7% annualized, according to Fiserv Case- Shiller, a home-price research firm. (At the worst of the decline, a year ago, prices had fallen 30%.) The median home now sells for $177,000, a bit more than what it would have fetched in 2003.
Among the cities that Fiserv tracks, Merced, Cal., fared worst, with a 68% plunge in its median home price in the four years since the peak, followed closely by Modesto, Salinas and Stockton, Cal.; Cape Coral-Fort Myers, Fla.; and Detroit. Prices rose in just 12 cities -- in upstate New York, Tennessee and Pennsylvania -- that missed the boom and plugged along at their usual slow pace of appreciation.
Stuck Underwater
The home-price plunge has left 23% of mortgage borrowers (out of 53.5 million) underwater -- that is, they owe more on their mortgage than the market value of their home. Unless they can ante up the difference -- an average of $75,000, according to CoreLogic, which analyzes mortgage data -- they can’t sell and they can’t move. Their choices? Stick it out, ask the lender for permission to sell for less than they owe (a short sale), or default.
In Norwood, Mass., south of Boston, Al and Shannon Becker wish they could buy a bigger home, but they’re underwater by about $50,000. But the couple have a plan. They bought their 1910 farmhouse, with three bedrooms and two baths, for $389,000 in 2005. By 2006, the property appraised for $423,000 and the couple refinanced, taking cash out for home improvements. Now it’s worth $350,000. Still, they can afford to move -- and could come up with the cash to pay off the mortgage. Instead, they are paying an extra $500 a month on the second mortgage they took out when they purchased the house and anticipate the day when debt pay-down and home-price growth will converge. Walk away? No. “That would be un-American, and my parents would kill me,” says Al.
The price gains that would put the Beckers and the millions of homeowners like them in the black have been tantalizingly out of reach, though glimmers of hope exist. Median home prices rose by 3.6% during the year ended June 30. Many California cities saw double-digit increases. Prices rose by at least 5% in many cities in California’s beleaguered Central Valley and Inland Empire (such as Riverside-San Bernardino), a few cities in Florida, and in Phoenix, Washington, D.C., and Minneapolis-St. Paul.
David Stiff, chief economist at Fiserv Case-Shiller, says those price increases, artificially propelled by the home-buyer tax credit, weren’t sustainable. The tax credit expired on April 30. By June, sales had begun to slide, and in July they tanked. In late summer, sales of existing homes (including single-family houses, townhouses, condos and co-ops) began to climb again, but in the National Association of Realtors’ most recent report, they were still 19% below a year ago. The lower the price tier, the greater the decline in sales, which reflected the pullback of first-time home buyers.
Although this recovery may seem unendurably long, Stiff says that five to seven years is historically a “pretty standard time frame” for prices to stabilize after a large correction. But in the past, some regions suffered longer than others. For example, Dallas home prices took 12 years to recover after they fell from their peak in mid 1986. This time around, however, the downturn hit more areas because the mortgage-credit bubble was so widespread.
The Foreclosure Factor
Now, short sales and foreclosures are the driving force behind continued price declines. Throughout 2010, they accounted for about one-third of home sales, with an average price discount of 26%, according to RealtyTrac. Everyone agrees that more such sales are on the way, but estimates vary.
Moody’s Analytics chief economist Mark Zandi says the foreclosure pipeline holds about four million loans that are delinquent by 90 days or more -- or headed that way -- and he thinks half of those will end up for sale. He thinks that delinquency rates have peaked and that foreclosures will peak in 2011. He reckons that, given current supply and demand, it will take two years to work through the excess inventory (which is concentrated in Florida, the Atlanta area, Arizona, Nevada, California’s Central Valley, the Rust Belt and a few other spots in the Midwest). The longer it takes to put to rest the foreclosure-processing issue raised in October, the greater the backlog of properties -- and the more they will suppress prices when they hit the market. But Zandi says foreclosure-gate will be resolved within a few months, not a few quarters. Even so, foreclosure moratoriums have ensnared plenty of bargain hunters, including Kerry Deland of St. Cloud, Fla. Deland moved to St. Cloud, near Orlando, in 2005. A kindergarten teacher, Deland quickly figured out that she couldn’t afford to buy a home -- especially one with enough land for her horse -- on her salary.
A friend tipped her off to a property that appeared destined for foreclosure -- a 5-acre spread with a three-bedroom, two-bath house that would have sold for $300,000 in 2005. Deland watched and waited. In July, the foreclosing lender listed the property for $114,000. Deland made two offers. The first time she lost out to a higher bidder, whose deal fell through. In late August, she made a winning bid of $111,900. Closing was scheduled for early November, but in October Deland learned that the seller, Fannie Mae, had imposed a foreclosure moratorium. Fortunately, it offered to extend Deland’s contract until December 5. “I’ve waited this long,” she says. “I can wait some more.”
A Glass Half-Full
The worst-case scenario for home prices? Slow economic growth and high unemployment drive up the foreclosure numbers, which push down home prices. Consumers refrain from spending, further dampening economic growth and job creation. Demand for homes decreases because would-be buyers either don’t have a job or don’t have confidence that they’ll still have one in months to come. Confident buyers hold off because they expect further price declines.
But Zandi thinks the job market will begin to turn around by mid to late 2011. And the Federal Reserve will ensure that mortgages stay dirt-cheap at least until employment picks up again. Zandi says that the best reason for a bit of optimism is this: With few exceptions, the market is fairly valued based on the relationship of home prices to income and apartment rents. Some markets have actually become undervalued, which will attract more buyers and investors.
Bank of America Merrill Lynch economist Michelle Meyer says that to frame the housing outlook in a more optimistic light, “everything has to go as planned.”To buoy consumer confidence and put home sales on a strong, upward trajectory, job growth will have to be considerable and the unemployment rate clearly receding. Meyer agrees that we could see that begin to occur in the second half of 2011, but, she says, “it will be a slow process.” Fiserv expects the housing market to finally hit bottom in mid 2011, with another 7% decline in the U.S. median home price for the year ending June 30, 2011. The firm’s forecasting model says that prices are 90% of the way back to being in line with household incomes. Stiff says that the housing market is now “bouncing along the bottom,” with buyers and sellers creating price volatility as they try to match bid and ask prices. The firm predicts that in many cities, prices will begin to tick upward again in 2012.
By Pat Mertz Esswein, Associate Editor
From Kiplinger's Personal Finance magazine, January 2011
The lowest mortgage interest rates in almost 60 years, plus affordable homes in cities where buyers had been priced out for years, should be turning the housing market around. But the market also labors under some heavy burdens: a glut of foreclosures that are dragging down home prices, high unemployment and tight credit. Sales fell off a cliff after the home-buyer tax credit expired. And “foreclosure-gate” -- legal squabbling about the process used to repossess many homes -- postponed the sale of many foreclosed properties and struck yet another body blow to confidence in the housing market.
For the four years beginning with the downturn in mid 2006, the median price of an existing home nationwide fell by 27%, or 7.7% annualized, according to Fiserv Case- Shiller, a home-price research firm. (At the worst of the decline, a year ago, prices had fallen 30%.) The median home now sells for $177,000, a bit more than what it would have fetched in 2003.
Among the cities that Fiserv tracks, Merced, Cal., fared worst, with a 68% plunge in its median home price in the four years since the peak, followed closely by Modesto, Salinas and Stockton, Cal.; Cape Coral-Fort Myers, Fla.; and Detroit. Prices rose in just 12 cities -- in upstate New York, Tennessee and Pennsylvania -- that missed the boom and plugged along at their usual slow pace of appreciation.
Stuck Underwater
The home-price plunge has left 23% of mortgage borrowers (out of 53.5 million) underwater -- that is, they owe more on their mortgage than the market value of their home. Unless they can ante up the difference -- an average of $75,000, according to CoreLogic, which analyzes mortgage data -- they can’t sell and they can’t move. Their choices? Stick it out, ask the lender for permission to sell for less than they owe (a short sale), or default.
In Norwood, Mass., south of Boston, Al and Shannon Becker wish they could buy a bigger home, but they’re underwater by about $50,000. But the couple have a plan. They bought their 1910 farmhouse, with three bedrooms and two baths, for $389,000 in 2005. By 2006, the property appraised for $423,000 and the couple refinanced, taking cash out for home improvements. Now it’s worth $350,000. Still, they can afford to move -- and could come up with the cash to pay off the mortgage. Instead, they are paying an extra $500 a month on the second mortgage they took out when they purchased the house and anticipate the day when debt pay-down and home-price growth will converge. Walk away? No. “That would be un-American, and my parents would kill me,” says Al.
The price gains that would put the Beckers and the millions of homeowners like them in the black have been tantalizingly out of reach, though glimmers of hope exist. Median home prices rose by 3.6% during the year ended June 30. Many California cities saw double-digit increases. Prices rose by at least 5% in many cities in California’s beleaguered Central Valley and Inland Empire (such as Riverside-San Bernardino), a few cities in Florida, and in Phoenix, Washington, D.C., and Minneapolis-St. Paul.
David Stiff, chief economist at Fiserv Case-Shiller, says those price increases, artificially propelled by the home-buyer tax credit, weren’t sustainable. The tax credit expired on April 30. By June, sales had begun to slide, and in July they tanked. In late summer, sales of existing homes (including single-family houses, townhouses, condos and co-ops) began to climb again, but in the National Association of Realtors’ most recent report, they were still 19% below a year ago. The lower the price tier, the greater the decline in sales, which reflected the pullback of first-time home buyers.
Although this recovery may seem unendurably long, Stiff says that five to seven years is historically a “pretty standard time frame” for prices to stabilize after a large correction. But in the past, some regions suffered longer than others. For example, Dallas home prices took 12 years to recover after they fell from their peak in mid 1986. This time around, however, the downturn hit more areas because the mortgage-credit bubble was so widespread.
The Foreclosure Factor
Now, short sales and foreclosures are the driving force behind continued price declines. Throughout 2010, they accounted for about one-third of home sales, with an average price discount of 26%, according to RealtyTrac. Everyone agrees that more such sales are on the way, but estimates vary.
Moody’s Analytics chief economist Mark Zandi says the foreclosure pipeline holds about four million loans that are delinquent by 90 days or more -- or headed that way -- and he thinks half of those will end up for sale. He thinks that delinquency rates have peaked and that foreclosures will peak in 2011. He reckons that, given current supply and demand, it will take two years to work through the excess inventory (which is concentrated in Florida, the Atlanta area, Arizona, Nevada, California’s Central Valley, the Rust Belt and a few other spots in the Midwest). The longer it takes to put to rest the foreclosure-processing issue raised in October, the greater the backlog of properties -- and the more they will suppress prices when they hit the market. But Zandi says foreclosure-gate will be resolved within a few months, not a few quarters. Even so, foreclosure moratoriums have ensnared plenty of bargain hunters, including Kerry Deland of St. Cloud, Fla. Deland moved to St. Cloud, near Orlando, in 2005. A kindergarten teacher, Deland quickly figured out that she couldn’t afford to buy a home -- especially one with enough land for her horse -- on her salary.
A friend tipped her off to a property that appeared destined for foreclosure -- a 5-acre spread with a three-bedroom, two-bath house that would have sold for $300,000 in 2005. Deland watched and waited. In July, the foreclosing lender listed the property for $114,000. Deland made two offers. The first time she lost out to a higher bidder, whose deal fell through. In late August, she made a winning bid of $111,900. Closing was scheduled for early November, but in October Deland learned that the seller, Fannie Mae, had imposed a foreclosure moratorium. Fortunately, it offered to extend Deland’s contract until December 5. “I’ve waited this long,” she says. “I can wait some more.”
A Glass Half-Full
The worst-case scenario for home prices? Slow economic growth and high unemployment drive up the foreclosure numbers, which push down home prices. Consumers refrain from spending, further dampening economic growth and job creation. Demand for homes decreases because would-be buyers either don’t have a job or don’t have confidence that they’ll still have one in months to come. Confident buyers hold off because they expect further price declines.
But Zandi thinks the job market will begin to turn around by mid to late 2011. And the Federal Reserve will ensure that mortgages stay dirt-cheap at least until employment picks up again. Zandi says that the best reason for a bit of optimism is this: With few exceptions, the market is fairly valued based on the relationship of home prices to income and apartment rents. Some markets have actually become undervalued, which will attract more buyers and investors.
Bank of America Merrill Lynch economist Michelle Meyer says that to frame the housing outlook in a more optimistic light, “everything has to go as planned.”To buoy consumer confidence and put home sales on a strong, upward trajectory, job growth will have to be considerable and the unemployment rate clearly receding. Meyer agrees that we could see that begin to occur in the second half of 2011, but, she says, “it will be a slow process.” Fiserv expects the housing market to finally hit bottom in mid 2011, with another 7% decline in the U.S. median home price for the year ending June 30, 2011. The firm’s forecasting model says that prices are 90% of the way back to being in line with household incomes. Stiff says that the housing market is now “bouncing along the bottom,” with buyers and sellers creating price volatility as they try to match bid and ask prices. The firm predicts that in many cities, prices will begin to tick upward again in 2012.
Wednesday, November 17, 2010
Why Use a REALTOR®?
All real estate licensees are not the same. Only real estate licensees who are members of the NATIONAL ASSOCIATION OF REALTORS® are properly called REALTORS®. They proudly display the REALTOR "®" logo on the business card or other marketing and sales literature. REALTORS® are committed to treat all parties to a transaction honestly. REALTORS® subscribe to a strict code of ethics and are expected to maintain a higher level of knowledge of the process of buying and selling real estate. An independent survey reports that 84% of home buyers would use the same REALTOR® again.
Real estate transactions involve one of the biggest financial investments most people experience in their lifetime. Transactions today usually exceed $100,000. If you had a $100,000 income tax problem, would you attempt to deal with it without the help of a CPA? If you had a $100,000 legal question, would you deal with it without the help of an attorney? Considering the small upside cost and the large downside risk, it would be foolish to consider a deal in real estate without the professional assistance of a REALTOR®.
But if you're still not convinced of the value of a REALTOR®, here are a dozen more reasons to use one:
1. Your REALTOR® can help you determine your buying power -- that is, your financial reserves plus your borrowing capacity. If you give a REALTOR® some basic information about your available savings, income and current debt, he or she can refer you to lenders best qualified to help you. Most lenders -- banks and mortgage companies -- offer limited choices.
2. Your REALTOR® has many resources to assist you in your home search. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your agent to find all available properties.
3. Your REALTOR® can assist you in the selection process by providing objective information about each property. Agents who are REALTORS® have access to a variety of informational resources. REALTORS® can provide local community information on utilities, zoning. schools, etc. There are two things you'll want to know. First, will the property provide the environment I want for a home or investment? Second, will the property have resale value when I am ready to sell?
4. Your REALTOR® can help you negotiate. There are myriad negotiating factors, including but not limited to price, financing, terms, date of possession and often the inclusion or exclusion of repairs and furnishings or equipment. The purchase agreement should provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.
5. Your REALTOR® provides due diligence during the evaluation of the property. Depending on the area and property, this could include inspections for termites, dry rot, asbestos, faulty structure, roof condition, septic tank and well tests, just to name a few. Your REALTOR® can assist you in finding qualified responsible professionals to do most of these investigations and provide you with written reports. You will also want to see a preliminary report on the title of the property. Title indicates ownership of property and can be mired in confusing status of past owners or rights of access. The title to most properties will have some limitations; for example, easements (access rights) for utilities. Your REALTOR®, title company or attorney can help you resolve issues that might cause problems at a later date.
6. Your REALTOR® can help you in understanding different financing options and in identifying qualified lenders.
7. Your REALTOR® can guide you through the closing process and make sure everything flows together smoothly.
8. When selling your home, your REALTOR® can give you up-to-date information on what is happening in the marketplace and the price, financing, terms and condition of competing properties. These are key factors in getting your property sold at the best price, quickly and with minimum hassle.
9. Your REALTOR® markets your property to other real estate agents and the public. Often, your REALTOR® can recommend repairs or cosmetic work that will significantly enhance the salability of your property. Your REALTOR® markets your property to other real estate agents and the public. In many markets across the country, over 50% of real estate sales are cooperative sales; that is, a real estate agent other than yours brings in the buyer. Your REALTOR® acts as the marketing coordinator, disbursing information about your property to other real estate agents through a Multiple Listing Service or other cooperative marketing networks, open houses for agents, etc. The REALTOR® Code of Ethics requires REALTORS® to utilize these cooperative relationships when they benefit their clients.
10. Your REALTOR® will know when, where and how to advertise your property. There is a misconception that advertising sells real estate. The NATIONAL ASSOCIATION OF REALTORS® studies show that 82% of real estate sales are the result of agent contacts through previous clients, referrals, friends, family and personal contacts. When a property is marketed with the help of your REALTOR®, you do not have to allow strangers into your home. Your REALTOR® will generally prescreen and accompany qualified prospects through your property.
11. Your REALTOR® can help you objectively evaluate every buyer's proposal without compromising your marketing position. This initial agreement is only the beginning of a process of appraisals, inspections and financing -- a lot of possible pitfalls. Your REALTOR® can help you write a legally binding, win-win agreement that will be more likely to make it through the process.
12. Your REALTOR® can help close the sale of your home. Between the initial sales agreement and closing (or settlement), questions may arise. For example, unexpected repairs are required to obtain financing or a cloud in the title is discovered. The required paperwork alone is overwhelming for most sellers. Your REALTOR® is the best person to objectively help you resolve these issues and move the transaction to closing (or settlement).
from realtor.com
Real estate transactions involve one of the biggest financial investments most people experience in their lifetime. Transactions today usually exceed $100,000. If you had a $100,000 income tax problem, would you attempt to deal with it without the help of a CPA? If you had a $100,000 legal question, would you deal with it without the help of an attorney? Considering the small upside cost and the large downside risk, it would be foolish to consider a deal in real estate without the professional assistance of a REALTOR®.
But if you're still not convinced of the value of a REALTOR®, here are a dozen more reasons to use one:
1. Your REALTOR® can help you determine your buying power -- that is, your financial reserves plus your borrowing capacity. If you give a REALTOR® some basic information about your available savings, income and current debt, he or she can refer you to lenders best qualified to help you. Most lenders -- banks and mortgage companies -- offer limited choices.
2. Your REALTOR® has many resources to assist you in your home search. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your agent to find all available properties.
3. Your REALTOR® can assist you in the selection process by providing objective information about each property. Agents who are REALTORS® have access to a variety of informational resources. REALTORS® can provide local community information on utilities, zoning. schools, etc. There are two things you'll want to know. First, will the property provide the environment I want for a home or investment? Second, will the property have resale value when I am ready to sell?
4. Your REALTOR® can help you negotiate. There are myriad negotiating factors, including but not limited to price, financing, terms, date of possession and often the inclusion or exclusion of repairs and furnishings or equipment. The purchase agreement should provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.
5. Your REALTOR® provides due diligence during the evaluation of the property. Depending on the area and property, this could include inspections for termites, dry rot, asbestos, faulty structure, roof condition, septic tank and well tests, just to name a few. Your REALTOR® can assist you in finding qualified responsible professionals to do most of these investigations and provide you with written reports. You will also want to see a preliminary report on the title of the property. Title indicates ownership of property and can be mired in confusing status of past owners or rights of access. The title to most properties will have some limitations; for example, easements (access rights) for utilities. Your REALTOR®, title company or attorney can help you resolve issues that might cause problems at a later date.
6. Your REALTOR® can help you in understanding different financing options and in identifying qualified lenders.
7. Your REALTOR® can guide you through the closing process and make sure everything flows together smoothly.
8. When selling your home, your REALTOR® can give you up-to-date information on what is happening in the marketplace and the price, financing, terms and condition of competing properties. These are key factors in getting your property sold at the best price, quickly and with minimum hassle.
9. Your REALTOR® markets your property to other real estate agents and the public. Often, your REALTOR® can recommend repairs or cosmetic work that will significantly enhance the salability of your property. Your REALTOR® markets your property to other real estate agents and the public. In many markets across the country, over 50% of real estate sales are cooperative sales; that is, a real estate agent other than yours brings in the buyer. Your REALTOR® acts as the marketing coordinator, disbursing information about your property to other real estate agents through a Multiple Listing Service or other cooperative marketing networks, open houses for agents, etc. The REALTOR® Code of Ethics requires REALTORS® to utilize these cooperative relationships when they benefit their clients.
10. Your REALTOR® will know when, where and how to advertise your property. There is a misconception that advertising sells real estate. The NATIONAL ASSOCIATION OF REALTORS® studies show that 82% of real estate sales are the result of agent contacts through previous clients, referrals, friends, family and personal contacts. When a property is marketed with the help of your REALTOR®, you do not have to allow strangers into your home. Your REALTOR® will generally prescreen and accompany qualified prospects through your property.
11. Your REALTOR® can help you objectively evaluate every buyer's proposal without compromising your marketing position. This initial agreement is only the beginning of a process of appraisals, inspections and financing -- a lot of possible pitfalls. Your REALTOR® can help you write a legally binding, win-win agreement that will be more likely to make it through the process.
12. Your REALTOR® can help close the sale of your home. Between the initial sales agreement and closing (or settlement), questions may arise. For example, unexpected repairs are required to obtain financing or a cloud in the title is discovered. The required paperwork alone is overwhelming for most sellers. Your REALTOR® is the best person to objectively help you resolve these issues and move the transaction to closing (or settlement).
from realtor.com
5 Reasons You Should Use a Real Estate Professional
Should you spend the money on a real estate commission or save that money by selling your home by yourself? That is a question many home sellers ask themselves. Today, we want to discuss why it is crucial to have a true professional guiding you through the minefield of challenges that exist in the current real estate market.
The housing market today is more challenging than it has ever been and seems to be becoming more difficult each day. What impact will foreclosures have on prices? Which loan products that were available just last month are no longer available? How do you convince perspective purchasers to pull the trigger on an offer when everyone is telling them that they should see another 100 houses before they make a decision? These are tough questions for a trained, experienced professional. The lay person would find it almost impossible to keep abreast of this rapidly evolving industry.
Here are five important reasons to use a real estate professional:
1. Pricing Is Difficult
Just a few years ago, you didn’t have to worry about overpricing your home. If it was too high, all you needed to do was wait as historic appreciation was taking place. The situation is quite different today. With experts calling for another drop in home values, overpricing your property will cost you time. In this market, time costs you money. A professional real estate agent will discuss how increasing inventory could dramatically impact the value of your property in the months to come. They will help you set the right price in today’s market.
2. Negotiating Ability Is Crucial
Buyers today have an almost unlimited supply of homes from which to choose. They realize that puts them in a great negotiating position. Most buyers are now being represented by an agent. Sellers need to also be represented by a professional expert trained to negotiate real estate contracts.
3. Mortgaging Is Key to the Deal
The biggest impact of the housing market collapse is that lending standards are much stricter today than they were a few short years ago. Rules are constantly changing. Even FHA has gone through a guidelines overhaul in the last several months. You need a real estate expert who has teamed up with a knowledgeable mortgage professional to make sure that the buyer in the deal is in fact capable of obtaining a mortgage. Losing time with an unqualified buyer costs you money in a market where prices are falling.
4. Your Family’s Safety
We have always found it puzzling that the same person that will lock every door and window and set the alarm today will then allow total strangers into their house tomorrow. The real estate industry trains its practitioners to take steps to protect themselves and their clients. Take advantage of putting a person between you and the person calling on an ad or yard sign.
5. You Probably Have More Important Things to Do
Selling a home could turn into a full time job. Learning the necessary disclosures, coordinating the dates of your closings, dealing with a challenge regarding your appraisal and re-negotiating the offer after an engineer’s report are just a few of the concerns you may face. You would probably be better off spending that time with the items important to you and your family and leaving the challenges to your agent.
Bottom Line
To make sure the sale of your home is handled professionally – hire a trained professional. In the long run, you will wind-up with more money in your pocket and have fewer challenges with the move.
The housing market today is more challenging than it has ever been and seems to be becoming more difficult each day. What impact will foreclosures have on prices? Which loan products that were available just last month are no longer available? How do you convince perspective purchasers to pull the trigger on an offer when everyone is telling them that they should see another 100 houses before they make a decision? These are tough questions for a trained, experienced professional. The lay person would find it almost impossible to keep abreast of this rapidly evolving industry.
Here are five important reasons to use a real estate professional:
1. Pricing Is Difficult
Just a few years ago, you didn’t have to worry about overpricing your home. If it was too high, all you needed to do was wait as historic appreciation was taking place. The situation is quite different today. With experts calling for another drop in home values, overpricing your property will cost you time. In this market, time costs you money. A professional real estate agent will discuss how increasing inventory could dramatically impact the value of your property in the months to come. They will help you set the right price in today’s market.
2. Negotiating Ability Is Crucial
Buyers today have an almost unlimited supply of homes from which to choose. They realize that puts them in a great negotiating position. Most buyers are now being represented by an agent. Sellers need to also be represented by a professional expert trained to negotiate real estate contracts.
3. Mortgaging Is Key to the Deal
The biggest impact of the housing market collapse is that lending standards are much stricter today than they were a few short years ago. Rules are constantly changing. Even FHA has gone through a guidelines overhaul in the last several months. You need a real estate expert who has teamed up with a knowledgeable mortgage professional to make sure that the buyer in the deal is in fact capable of obtaining a mortgage. Losing time with an unqualified buyer costs you money in a market where prices are falling.
4. Your Family’s Safety
We have always found it puzzling that the same person that will lock every door and window and set the alarm today will then allow total strangers into their house tomorrow. The real estate industry trains its practitioners to take steps to protect themselves and their clients. Take advantage of putting a person between you and the person calling on an ad or yard sign.
5. You Probably Have More Important Things to Do
Selling a home could turn into a full time job. Learning the necessary disclosures, coordinating the dates of your closings, dealing with a challenge regarding your appraisal and re-negotiating the offer after an engineer’s report are just a few of the concerns you may face. You would probably be better off spending that time with the items important to you and your family and leaving the challenges to your agent.
Bottom Line
To make sure the sale of your home is handled professionally – hire a trained professional. In the long run, you will wind-up with more money in your pocket and have fewer challenges with the move.
Saturday, November 13, 2010
Should You Buy or Rent?
Renting may be smarter if home prices in your area will fall further.
By Pat Mertz Esswein, Associate Editor
From Kiplinger's Personal Finance magazine, April 2010
If you're a renter, you may be champing at the bit to buy a house after watching prices fall for four years. Is it time to jump? It may well be, especially if you want to capture the home buyer's tax credit (you'll need to have a contract by April 30 and close by June 30). But before you leap, you need to go beyond calculating the impact on your monthly budget and figure out how much home-price froth is left in your local housing market.
Encouraging signs. A key number to consider when switching from renter to homeowner is the price-rent ratio. This figure compares a city's median home price with its median annual rent. At the housing market's peak in 2005, the national median home price had inflated to nearly 21 times the median annual rent. By the third quarter of 2009, however, the ratio had deflated to 15, returning to the historical norm, according to Hessam Nadji, managing director of Marcus & Millichap, a commercial real estate brokerage company in Encino, Cal.
If the price-rent ratio where you're looking to buy is 18 or higher, your market may still be in the bubble zone, with a greater probability that home prices will fall after you buy. That could put you underwater -- meaning your home would be worth less than what you owe on the mortgage. If the ratio has fallen below 15, there's less chance that home prices will sink.
The table on Rent or Buy below shows the ten cities in which home prices are least likely to drop further, as well as those most likely to fall further, based on price-rent ratios. We also show the gap between median monthly apartment rents and median monthly mortgage payments. Five years ago, the difference between monthly mortgage payments and rent was $745 nationally; by the end of 2009, it was just $181.
To get a rough estimate of your local price-rent ratio, divide the average list price of several homes that meet your criteria by the average annual rent of several rental units with the same number of bedrooms and comparable amenities.
Weighing the decision. A year ago, the price-rent ratio in Phoenix was 14 -- down from almost 19 a year earlier. Home prices had fallen by half, and mortgage rates were at historic lows. Financial planner Brendan McNamar decided it was finally time for him to buy. He had rented since moving to the city in 2006, just after the housing bubble peaked, and was sitting on a nice nest egg from a home he had sold in 2004.
McNamar shopped for a long time, made offers on several houses and eventually bought a ten-year-old, four-bedroom, three-bathroom short sale listed for $219,000. (In a short sale, the sellers get permission from the lender to sell for less than the mortgage amount.) The house had sold for $355,000 in 2007. McNamar offered the full price, which the bank eventually accepted after 90 days. He put down 20% and took out a 30-year mortgage with a low fixed rate of 5.25%. He pays $1,176 a month (including taxes and insurance), which is more than twice his former monthly rent of $550. But because he hadn't owned a home in the past three years, he was able to snag the $8,000 first-time home buyer's tax credit.
From an investment perspective, McNamar wanted a house that would allow him to break even or earn a profit if he sold in three years. But given that prices have fallen even further in Phoenix since last spring -- the price-rent ratio is a rough guide, not an infallible one -- he reckons that his break-even point now may be four years away. But it's not a big financial setback to him because he has no plans to move.
Good deals for renters. Renting can be a smart strategy while waiting for this choppy housing market to settle down. Consider Jeremy Portnoff and his wife, Heather, of Edison, N.J. By mid 2009, the median home price in Edison had fallen a healthy 19%, to $317,000, from the market's peak in mid 2006.
The Portnoffs had their heart set on a home with three or four bedrooms to accommodate the family they hope to have, plus an office for Jeremy. The house they could afford was a starter home, probably a small townhouse -- which, on an after-tax basis, they figured would cost them about the same as renting.
But the Portnoffs also figured that if they sold it in three years, real estate commissions would consume any gains they could reasonably expect. Plus, Jeremy believed that the price of their ideal home in that area would continue to decline.
So they took a pass on buying and got a great deal on renting a two-bedroom townhome -- $1,550 a month, $300 less than when they looked at the same development three years before. The couple prudently plan to continue to pay down debt and save for a larger down payment on their next home.
In some markets, rental prices have dropped as supply has increased. By the end of 2009, the vacancy rate nationally had grown to 8.2%, a 30-year high, according to Nadji, of Marcus & Millichap. Meanwhile, rents had fallen 5.8% from the year before.
Markets with the highest vacancy rates include Jacksonville, Fla. (forecast at 14% in 2010), Atlanta, Houston, Las Vegas, Orlando, Phoenix, Tampa and Tucson. Renters in such markets can afford to shop around and negotiate hard. A building's leasing manager may be willing to lower the rent to attract or keep your business.
Nadji expects the vacancy rate nationally to tighten up a bit (to 7.8%) by year-end and start a rapid recovery beginning in 2011, with very strong rent growth between 2011 and 2015. Demographics (five million people will enter the peak renter age range of 20 to 34 over the next decade) and plummeting construction starts in 2009 and 2010 drive his forecast.
Not all cities have an excess of rental units, though. In some large cities, such as New York, downtown Chicago, San Francisco, Los Angeles and Washington, D.C., vacancy rates have remained tight -- and home prices have remained stubbornly high.
By Pat Mertz Esswein, Associate Editor
From Kiplinger's Personal Finance magazine, April 2010
If you're a renter, you may be champing at the bit to buy a house after watching prices fall for four years. Is it time to jump? It may well be, especially if you want to capture the home buyer's tax credit (you'll need to have a contract by April 30 and close by June 30). But before you leap, you need to go beyond calculating the impact on your monthly budget and figure out how much home-price froth is left in your local housing market.
Encouraging signs. A key number to consider when switching from renter to homeowner is the price-rent ratio. This figure compares a city's median home price with its median annual rent. At the housing market's peak in 2005, the national median home price had inflated to nearly 21 times the median annual rent. By the third quarter of 2009, however, the ratio had deflated to 15, returning to the historical norm, according to Hessam Nadji, managing director of Marcus & Millichap, a commercial real estate brokerage company in Encino, Cal.
If the price-rent ratio where you're looking to buy is 18 or higher, your market may still be in the bubble zone, with a greater probability that home prices will fall after you buy. That could put you underwater -- meaning your home would be worth less than what you owe on the mortgage. If the ratio has fallen below 15, there's less chance that home prices will sink.
The table on Rent or Buy below shows the ten cities in which home prices are least likely to drop further, as well as those most likely to fall further, based on price-rent ratios. We also show the gap between median monthly apartment rents and median monthly mortgage payments. Five years ago, the difference between monthly mortgage payments and rent was $745 nationally; by the end of 2009, it was just $181.
To get a rough estimate of your local price-rent ratio, divide the average list price of several homes that meet your criteria by the average annual rent of several rental units with the same number of bedrooms and comparable amenities.
Weighing the decision. A year ago, the price-rent ratio in Phoenix was 14 -- down from almost 19 a year earlier. Home prices had fallen by half, and mortgage rates were at historic lows. Financial planner Brendan McNamar decided it was finally time for him to buy. He had rented since moving to the city in 2006, just after the housing bubble peaked, and was sitting on a nice nest egg from a home he had sold in 2004.
McNamar shopped for a long time, made offers on several houses and eventually bought a ten-year-old, four-bedroom, three-bathroom short sale listed for $219,000. (In a short sale, the sellers get permission from the lender to sell for less than the mortgage amount.) The house had sold for $355,000 in 2007. McNamar offered the full price, which the bank eventually accepted after 90 days. He put down 20% and took out a 30-year mortgage with a low fixed rate of 5.25%. He pays $1,176 a month (including taxes and insurance), which is more than twice his former monthly rent of $550. But because he hadn't owned a home in the past three years, he was able to snag the $8,000 first-time home buyer's tax credit.
From an investment perspective, McNamar wanted a house that would allow him to break even or earn a profit if he sold in three years. But given that prices have fallen even further in Phoenix since last spring -- the price-rent ratio is a rough guide, not an infallible one -- he reckons that his break-even point now may be four years away. But it's not a big financial setback to him because he has no plans to move.
Good deals for renters. Renting can be a smart strategy while waiting for this choppy housing market to settle down. Consider Jeremy Portnoff and his wife, Heather, of Edison, N.J. By mid 2009, the median home price in Edison had fallen a healthy 19%, to $317,000, from the market's peak in mid 2006.
The Portnoffs had their heart set on a home with three or four bedrooms to accommodate the family they hope to have, plus an office for Jeremy. The house they could afford was a starter home, probably a small townhouse -- which, on an after-tax basis, they figured would cost them about the same as renting.
But the Portnoffs also figured that if they sold it in three years, real estate commissions would consume any gains they could reasonably expect. Plus, Jeremy believed that the price of their ideal home in that area would continue to decline.
So they took a pass on buying and got a great deal on renting a two-bedroom townhome -- $1,550 a month, $300 less than when they looked at the same development three years before. The couple prudently plan to continue to pay down debt and save for a larger down payment on their next home.
In some markets, rental prices have dropped as supply has increased. By the end of 2009, the vacancy rate nationally had grown to 8.2%, a 30-year high, according to Nadji, of Marcus & Millichap. Meanwhile, rents had fallen 5.8% from the year before.
Markets with the highest vacancy rates include Jacksonville, Fla. (forecast at 14% in 2010), Atlanta, Houston, Las Vegas, Orlando, Phoenix, Tampa and Tucson. Renters in such markets can afford to shop around and negotiate hard. A building's leasing manager may be willing to lower the rent to attract or keep your business.
Nadji expects the vacancy rate nationally to tighten up a bit (to 7.8%) by year-end and start a rapid recovery beginning in 2011, with very strong rent growth between 2011 and 2015. Demographics (five million people will enter the peak renter age range of 20 to 34 over the next decade) and plummeting construction starts in 2009 and 2010 drive his forecast.
Not all cities have an excess of rental units, though. In some large cities, such as New York, downtown Chicago, San Francisco, Los Angeles and Washington, D.C., vacancy rates have remained tight -- and home prices have remained stubbornly high.
Friday, November 12, 2010
In The Market Now?
Here's What You Need To Know.
Current market conditions suggest that real estate's traditional "off season" - the months of November, December and January - could actually represent the best opportunity during the next 12 to 18 months to make a deal. For buyers and sellers who are forging ahead in the next 60 to 90 days, here are some keys to success in today's market.
SELLERS
Price Correctly - The discussion on selling your home starts and ends with price. Remember, the right asking price for your home is not determined by what you paid or the balance on your mortgage. Rather, it has everything to do with the market right here, right now. Price according to the market and you have a good shot at selling.
Be Flexible - Consummating a deal today requires flexibility beyond negotiating price. Sellers might be asked to close quickly, "hold paper" (provide seller financing) or satisfy some other unorthodox request. Don't turn your back on an offer just because it requires extra effort. If that effort allows you to sell, it can be well worth it.
Market Like It's Hot - In the winter months, a lot of brokerage firms cut back on advertising and marketing. Bad for them. Good for you. The less marketing they do, the more @properties' print, online and grassroots marketing stands out...giving your home even more exposure relative to the competition.
BUYERS
Be Strong - Most sellers today are willing to give up a little on price in exchange for the assurance of dealing with a financially sound buyer. Take the necessary steps to demonstrate your viability as a purchaser. The more solid the ground beneath your feet, the more leverage you will have in the negotiation.
Know When To Stop Looking - It's not uncommon for buyers today to view three times as many listings as buyers a few years ago. While this is certainly a function of available inventory, it's also an indication of the paralysis by analysis that is dogging the market today. If you're serious about buying in the next 60 to 90 days, focus your search on a specific price, location and features, and when you find the right home, put your energy into negotiating the best deal - not looking for alternatives.
Take a Long Term View - A great price doesn't always equal a great deal. The next home you buy has to be one you can live in, enjoy and re-sell when you're ready. So look ahead five or ten years down the road and ask yourself if you'll be happy living there. If the answer is "Yes", you're home.
If you're ready to buy or sell this winter, or if you're simply looking for answers or advice, feel free to contact me anytime. And remember, I always appreciate your referrals.
HAPPY THANKSGIVING!
Dave Straub @properties Chicago
(773) 255-3180
Current market conditions suggest that real estate's traditional "off season" - the months of November, December and January - could actually represent the best opportunity during the next 12 to 18 months to make a deal. For buyers and sellers who are forging ahead in the next 60 to 90 days, here are some keys to success in today's market.
SELLERS
Price Correctly - The discussion on selling your home starts and ends with price. Remember, the right asking price for your home is not determined by what you paid or the balance on your mortgage. Rather, it has everything to do with the market right here, right now. Price according to the market and you have a good shot at selling.
Be Flexible - Consummating a deal today requires flexibility beyond negotiating price. Sellers might be asked to close quickly, "hold paper" (provide seller financing) or satisfy some other unorthodox request. Don't turn your back on an offer just because it requires extra effort. If that effort allows you to sell, it can be well worth it.
Market Like It's Hot - In the winter months, a lot of brokerage firms cut back on advertising and marketing. Bad for them. Good for you. The less marketing they do, the more @properties' print, online and grassroots marketing stands out...giving your home even more exposure relative to the competition.
BUYERS
Be Strong - Most sellers today are willing to give up a little on price in exchange for the assurance of dealing with a financially sound buyer. Take the necessary steps to demonstrate your viability as a purchaser. The more solid the ground beneath your feet, the more leverage you will have in the negotiation.
Know When To Stop Looking - It's not uncommon for buyers today to view three times as many listings as buyers a few years ago. While this is certainly a function of available inventory, it's also an indication of the paralysis by analysis that is dogging the market today. If you're serious about buying in the next 60 to 90 days, focus your search on a specific price, location and features, and when you find the right home, put your energy into negotiating the best deal - not looking for alternatives.
Take a Long Term View - A great price doesn't always equal a great deal. The next home you buy has to be one you can live in, enjoy and re-sell when you're ready. So look ahead five or ten years down the road and ask yourself if you'll be happy living there. If the answer is "Yes", you're home.
If you're ready to buy or sell this winter, or if you're simply looking for answers or advice, feel free to contact me anytime. And remember, I always appreciate your referrals.
HAPPY THANKSGIVING!
Dave Straub @properties Chicago
(773) 255-3180
Saturday, November 6, 2010
Unfriend Social Media Scammers
Unfriend Social Media Scammers
Stay alert to schemes designed to hook users of Facebook, LinkedIn and Twitter.
Social-media web sites, such as Facebook, Twitter and LinkedIn, have become fertile hunting grounds for bad guys phishing for your ID, angling for your money or hoping to redirect you to malicious sites. Be on the lookout for these three scams:
Money transfers. You get a message from a friend saying that his wallet has been stolen while traveling, and he needs you to wire him money. Because the message seems to come directly from someone you know, you might be tempted to help. But if you receive one of these messages, get in touch with your friend -- offline -- to find out what's really going on.
This scam first showed up in e-mails, and the social-media version works in a similar way: A hacker hijacks your social-media identity and then contacts your friends, usually through a private message, status update or chat message. Because hackers typically send the same message to several friends, you can usually identify the scheme based on the simplicity of the request. "Scammers try to keep their messages generic," says Chester Wisniewski, of Sophos, a data-protection firm. "They won't answer any kind of question that is off the beaten path."
Applications. You might see an update from a friend inviting you to take a quiz, view a "shocking" video or sign up for a free offer. Clicking on the link directs you to an application that asks for personal information -- phone number, Social Security number, or social-media user name and password -- before you can access the content.
Don't take the bait. Providing information could leave you with a stolen identity, surprise charges on your phone bill or a hacked social-media account. The application could also use your account to send the bogus content to others -- which is probably how your friend unintentionally shared it with you.
Before you click through, read user reviews of the application or search the Web to find out whether an application is legitimate. If a rogue app does access your account, social-media resource Mashable.com recommends that you remove it from your social-media site's application settings and then delete any messages it may have posted from your account.
Shortened URLs. URL shorteners such as Bit.ly or TinyURL.com are popular ways to share long links on social-media sites. But a shortened URL can hide a link's true destination, sometimes directing users to a malicious Web site or damaging content.
To protect yourself, Wisniewski suggests installing a URL expander for your browser; Internet Explorer and Firefox both offer options. URL expanders allow you to preview the actual URL of a shortened link before you click. If you do click on a link that takes you to a suspicious site, avoid installing any programs or providing personal information, and make sure your antivirus software is enabled and up-to-date.
Casey Mysliwy, Kiplinger
http://tinyurl.com/unfriendscammers
Stay alert to schemes designed to hook users of Facebook, LinkedIn and Twitter.
Social-media web sites, such as Facebook, Twitter and LinkedIn, have become fertile hunting grounds for bad guys phishing for your ID, angling for your money or hoping to redirect you to malicious sites. Be on the lookout for these three scams:
Money transfers. You get a message from a friend saying that his wallet has been stolen while traveling, and he needs you to wire him money. Because the message seems to come directly from someone you know, you might be tempted to help. But if you receive one of these messages, get in touch with your friend -- offline -- to find out what's really going on.
This scam first showed up in e-mails, and the social-media version works in a similar way: A hacker hijacks your social-media identity and then contacts your friends, usually through a private message, status update or chat message. Because hackers typically send the same message to several friends, you can usually identify the scheme based on the simplicity of the request. "Scammers try to keep their messages generic," says Chester Wisniewski, of Sophos, a data-protection firm. "They won't answer any kind of question that is off the beaten path."
Applications. You might see an update from a friend inviting you to take a quiz, view a "shocking" video or sign up for a free offer. Clicking on the link directs you to an application that asks for personal information -- phone number, Social Security number, or social-media user name and password -- before you can access the content.
Don't take the bait. Providing information could leave you with a stolen identity, surprise charges on your phone bill or a hacked social-media account. The application could also use your account to send the bogus content to others -- which is probably how your friend unintentionally shared it with you.
Before you click through, read user reviews of the application or search the Web to find out whether an application is legitimate. If a rogue app does access your account, social-media resource Mashable.com recommends that you remove it from your social-media site's application settings and then delete any messages it may have posted from your account.
Shortened URLs. URL shorteners such as Bit.ly or TinyURL.com are popular ways to share long links on social-media sites. But a shortened URL can hide a link's true destination, sometimes directing users to a malicious Web site or damaging content.
To protect yourself, Wisniewski suggests installing a URL expander for your browser; Internet Explorer and Firefox both offer options. URL expanders allow you to preview the actual URL of a shortened link before you click. If you do click on a link that takes you to a suspicious site, avoid installing any programs or providing personal information, and make sure your antivirus software is enabled and up-to-date.
Casey Mysliwy, Kiplinger
http://tinyurl.com/unfriendscammers
Friday, November 5, 2010
How to Set Ceiling Fan Direction for Winter
How to Set Ceiling Fan Direction for Winter
By an eHow Contributor
Most people think of ceiling fans as a way cool rooms during the hot summer season. However, ceiling fans can be just as useful during winter months. By changing the direction of your ceiling fan's rotation, you can direct the blades to force cooler air upward, towards the ceiling. This will displace the warm air that naturally rises, forcing it down into your living space. While the heating properties of a ceiling fan aren't likely to offset the need for a conventional heating system, it can reduce your dependence on heaters and lower your energy bill.
Instructions:
Things You'll Need
Step stool, chair or ladder
1. Turn off your ceiling fan. You can accomplish this by pulling the string located on the fan or by using a remote control device. You should also flip the fan's wall switch to the "off" position.
2. Wait for the ceiling fan's blades to stop turning. For safety's sake, you don't want to try reaching your hand towards the ceiling fan while it's still in operation.
3. Find a ladder, step stool or chair that you can use to stand on while you're changing the direction of your fan's blades. Make sure to use something that's structurally sound and safe. Whatever you use, make sure that it's tall enough for you to see the ceiling fan's body completely.
4. Search the ceiling fan's cylindrical body for a small toggle switch. On most brands of ceiling fans, this switch will be no more than 1 to 2 inches long and will be vertically oriented. Most toggle switches are made from black plastic, making them easy to locate against a ceiling fan's lightly colored body.
5. Set the ceiling fan's toggle switch in the opposite direction. It should click firmly into place.
6. Dismount your step stool. Move it aside so that you have enough space to stand directly beneath your fan.
7. Turn on your ceiling fan again. Pull the string and flip the wall switch.
8. Pay attention to the direction in which the fan blades begin to spin. During winter months, the fan blades should turn in a clockwise direction.
9. Double-check your results by testing for a breeze. Once your fan is set correctly for winter, you should not be able to feel a breeze from directly beneath the fan.
Read more: How to Set Ceiling Fan Direction for Winter | eHow.com http://www.ehow.com/how_2153849_set-ceiling-fan-direction-winter.html#ixzz14RsseTH0
Read more: How to Set Ceiling Fan Direction for Winter @ eHow.com
Dave Straub
@properties
773.255.3180
By an eHow Contributor
Most people think of ceiling fans as a way cool rooms during the hot summer season. However, ceiling fans can be just as useful during winter months. By changing the direction of your ceiling fan's rotation, you can direct the blades to force cooler air upward, towards the ceiling. This will displace the warm air that naturally rises, forcing it down into your living space. While the heating properties of a ceiling fan aren't likely to offset the need for a conventional heating system, it can reduce your dependence on heaters and lower your energy bill.
Instructions:
Things You'll Need
Step stool, chair or ladder
1. Turn off your ceiling fan. You can accomplish this by pulling the string located on the fan or by using a remote control device. You should also flip the fan's wall switch to the "off" position.
2. Wait for the ceiling fan's blades to stop turning. For safety's sake, you don't want to try reaching your hand towards the ceiling fan while it's still in operation.
3. Find a ladder, step stool or chair that you can use to stand on while you're changing the direction of your fan's blades. Make sure to use something that's structurally sound and safe. Whatever you use, make sure that it's tall enough for you to see the ceiling fan's body completely.
4. Search the ceiling fan's cylindrical body for a small toggle switch. On most brands of ceiling fans, this switch will be no more than 1 to 2 inches long and will be vertically oriented. Most toggle switches are made from black plastic, making them easy to locate against a ceiling fan's lightly colored body.
5. Set the ceiling fan's toggle switch in the opposite direction. It should click firmly into place.
6. Dismount your step stool. Move it aside so that you have enough space to stand directly beneath your fan.
7. Turn on your ceiling fan again. Pull the string and flip the wall switch.
8. Pay attention to the direction in which the fan blades begin to spin. During winter months, the fan blades should turn in a clockwise direction.
9. Double-check your results by testing for a breeze. Once your fan is set correctly for winter, you should not be able to feel a breeze from directly beneath the fan.
Read more: How to Set Ceiling Fan Direction for Winter | eHow.com http://www.ehow.com/how_2153849_set-ceiling-fan-direction-winter.html#ixzz14RsseTH0
Read more: How to Set Ceiling Fan Direction for Winter @ eHow.com
Dave Straub
@properties
773.255.3180
Thursday, October 28, 2010
The Right Time to Buy or Sell
With winter approaching, many homebuyers and sellers assume now is the time to put real estate matters on hold. That logic may have held true in years past, but in the current market the idea of hibernating for the winter may not be the best decision. Following are a few reasons why right now is the right time for both buyers and sellers to be in the market.
Good Time to Buy
1. Price - The #1 reason qualified individuals are reluctant to buy today is a fear that prices will fall. And they may. But according to a recent story on MSN.com, "it doesn't really matter in the long haul." Housing affordability is near an all-time high, and according to the S&P/Case Shiller Home Price Index, local prices have increased for six consecutive months through August.
2. Interest Rates - Mortgage interest rates are 30% lower than they were four years ago. When you layer today's rates on top of prices that are 30% lower, you get monthly principal and interest that is only slightly more than half of what it was four years ago. That's a big deal.
3. Less Expensive Than Renting - According to the latest Trulia.com Rent vs. Buy Index, it is less expensive to own a home in Chicago than it is to rent. The 50-city index is calculated using the average list price compared with the average rent on two-bedroom apartments, condos, townhomes and co-ops listed on Trulia.com.
Good Time to Sell
1. Buyers Are Serious - It may be fun to drive around and look at open houses on a beautiful summer day, but when the weather starts to turn and people get busy with holiday schedules, kicking the tires on a new home is usually the last thing on someone's mind...unless, of course, they actually need to buy. Sure, there are fewer buyers in the fall and winter, but the ones who are out there are serious.
2. You're Moving Up - The thought of losing equity on a sale doesn't appeal to anyone, but in this market, sellers who trade up have more to gain than to lose. That's because, dollar for dollar, the more expensive home they're buying almost certainly has come down in price more than the home they're selling, which means move-up buyers will actually come out ahead provided they have the finances to complete a transaction.
3. Less Competition - While inventories remain high relative to past markets, the number of homes for sale in the fall and winter is generally about 25% less than in the spring. In addition, the recent moratorium on foreclosures has kept thousands of homes off the market. Those homes will eventually be put up for sale. So if you can capture the last few weeks of fall, you will face less competition than if you wait until next spring.
If you're considering buying or selling, there are many more reasons why it makes sense to do so now. To talk about your specific real estate needs, call or e-mail me today. And please remember that I always appreciate your referrals.
Dave Straub
@properties
(773) 255-3180
Good Time to Buy
1. Price - The #1 reason qualified individuals are reluctant to buy today is a fear that prices will fall. And they may. But according to a recent story on MSN.com, "it doesn't really matter in the long haul." Housing affordability is near an all-time high, and according to the S&P/Case Shiller Home Price Index, local prices have increased for six consecutive months through August.
2. Interest Rates - Mortgage interest rates are 30% lower than they were four years ago. When you layer today's rates on top of prices that are 30% lower, you get monthly principal and interest that is only slightly more than half of what it was four years ago. That's a big deal.
3. Less Expensive Than Renting - According to the latest Trulia.com Rent vs. Buy Index, it is less expensive to own a home in Chicago than it is to rent. The 50-city index is calculated using the average list price compared with the average rent on two-bedroom apartments, condos, townhomes and co-ops listed on Trulia.com.
Good Time to Sell
1. Buyers Are Serious - It may be fun to drive around and look at open houses on a beautiful summer day, but when the weather starts to turn and people get busy with holiday schedules, kicking the tires on a new home is usually the last thing on someone's mind...unless, of course, they actually need to buy. Sure, there are fewer buyers in the fall and winter, but the ones who are out there are serious.
2. You're Moving Up - The thought of losing equity on a sale doesn't appeal to anyone, but in this market, sellers who trade up have more to gain than to lose. That's because, dollar for dollar, the more expensive home they're buying almost certainly has come down in price more than the home they're selling, which means move-up buyers will actually come out ahead provided they have the finances to complete a transaction.
3. Less Competition - While inventories remain high relative to past markets, the number of homes for sale in the fall and winter is generally about 25% less than in the spring. In addition, the recent moratorium on foreclosures has kept thousands of homes off the market. Those homes will eventually be put up for sale. So if you can capture the last few weeks of fall, you will face less competition than if you wait until next spring.
If you're considering buying or selling, there are many more reasons why it makes sense to do so now. To talk about your specific real estate needs, call or e-mail me today. And please remember that I always appreciate your referrals.
Dave Straub
@properties
(773) 255-3180
Sunday, October 24, 2010
Should We Buy a New House?
Should We Buy a New House?
Q: I've recently married, and would like to give my new wife a new home. I'm tempted to buy one now, since builders have been giving away things like finished basements—one even will credit 1% of the price of the home towards upgrades for teachers like me. But since new-home prices still seem to be falling, we're nervous about committing. Plus, we see a lot of great deals on apartments, too, like one month's free rent for a unit with free WiFi and utilities. What should we do?
—Chicago
A: If you're motivated by incentives, suggest that you keep house-hunting. I don't think great builder incentives are going to last too much longer, and may even disappear before a newly-signed lease can expire.
It's true that there are deals on new homes now, spurred by the Chicago's still-weak economy. In its Chicago Market outlook PNC Financial Services Group noted that the city experienced a "more draining downturn" during the recession than the rest of the country due to heavy job losses and slow population growth.
But the city has a broad-based business sector that's beginning to revive, causing unemployment to tick down to a projected 9.8% in August from 10.1% a year earlier, according to the U.S. Bureau of Labor Statistics. While the recovery is still nascent and fragile, the housing market is responding. According to the most recent statistics from the Illinois Association of Realtors, in the Chicago metro area, 49,293 homes were sold from January to August this year, up 15.8% from the same period a year ago.
View Full Image
Associated Press
A sign advertises a new home's reduced price in a development in Twinsburg, Ohio.
.Although it's unclear what impact the current foreclosure mess will have on home prices, Standard and Poor's Case-Shiller indexes based on housing futures, while lightly traded, point to a possible turnaround in the offing, at least for Chicago. The composite index, which tracks 10 major metro areas, predicts that overall home prices will decline an additional 5.7% by Nov. 2011, while in Chicago, they'll fall only 0.5%. Then Chicago's prices are expected to pick up steam, rising 3% in Nov. 2012 and 5.4% in Nov. 2013. Meanwhile, the composite index for the same period is expected to fall 4.5% in 2012 and 1.4% in 2013.
All of which points to the likelihood that the days where you can score free finished basements and granite countertops are numbered. Indeed, last month the Federal Reserve's Beige Book noted that while residential building activity in Chicago has been minimal of late, despite falling inventory levels, "downward pressure on new home prices had likely bottomed out " and that "builders were refraining from reducing prices below costs, as many had done earlier in the year."
JUNE FLETCHER Wall Street Journal
HOUSE TALK
OCTOBER 21, 2010, 3:27 P.M. ET.
Q: I've recently married, and would like to give my new wife a new home. I'm tempted to buy one now, since builders have been giving away things like finished basements—one even will credit 1% of the price of the home towards upgrades for teachers like me. But since new-home prices still seem to be falling, we're nervous about committing. Plus, we see a lot of great deals on apartments, too, like one month's free rent for a unit with free WiFi and utilities. What should we do?
—Chicago
A: If you're motivated by incentives, suggest that you keep house-hunting. I don't think great builder incentives are going to last too much longer, and may even disappear before a newly-signed lease can expire.
It's true that there are deals on new homes now, spurred by the Chicago's still-weak economy. In its Chicago Market outlook PNC Financial Services Group noted that the city experienced a "more draining downturn" during the recession than the rest of the country due to heavy job losses and slow population growth.
But the city has a broad-based business sector that's beginning to revive, causing unemployment to tick down to a projected 9.8% in August from 10.1% a year earlier, according to the U.S. Bureau of Labor Statistics. While the recovery is still nascent and fragile, the housing market is responding. According to the most recent statistics from the Illinois Association of Realtors, in the Chicago metro area, 49,293 homes were sold from January to August this year, up 15.8% from the same period a year ago.
View Full Image
Associated Press
A sign advertises a new home's reduced price in a development in Twinsburg, Ohio.
.Although it's unclear what impact the current foreclosure mess will have on home prices, Standard and Poor's Case-Shiller indexes based on housing futures, while lightly traded, point to a possible turnaround in the offing, at least for Chicago. The composite index, which tracks 10 major metro areas, predicts that overall home prices will decline an additional 5.7% by Nov. 2011, while in Chicago, they'll fall only 0.5%. Then Chicago's prices are expected to pick up steam, rising 3% in Nov. 2012 and 5.4% in Nov. 2013. Meanwhile, the composite index for the same period is expected to fall 4.5% in 2012 and 1.4% in 2013.
All of which points to the likelihood that the days where you can score free finished basements and granite countertops are numbered. Indeed, last month the Federal Reserve's Beige Book noted that while residential building activity in Chicago has been minimal of late, despite falling inventory levels, "downward pressure on new home prices had likely bottomed out " and that "builders were refraining from reducing prices below costs, as many had done earlier in the year."
JUNE FLETCHER Wall Street Journal
HOUSE TALK
OCTOBER 21, 2010, 3:27 P.M. ET.
Saturday, October 23, 2010
Rise of the renting class
By Nin-Hai Tseng, reporter July 28, 2010: 9:33 AM ET
FORTUNE -- Modern America has long paired the "American Dream" with home ownership. The idea of staying put, paying property taxes and periodically mowing the lawn belonged to citizens who were somehow more American than the poor saps who could only afford to rent the place they called home.
The notion isn't accidental. Ownership and the American Dream are deeply linked in government policies that favor mortgages over rent payments, dating back before Herbert Hoover was elected president in 1929. As secretary of commerce, amid the Red Scare, Hoover trumpeted homeownership, believing that if one had an equity stake in the country, they'd less likely fall under the spell of Communism. What followed during the Great Depression were a spate of federal measures to help troubled homeowners, at a time when half of all mortgages were in default.
CommentMassive government programs supporting ownership still exist today, but record home foreclosures and spiraling prices have forced a redefinition of the American Dream -- one that includes renting.
In today's weak housing market, ownership has ceased to be an investment vehicle that millions used to trade up into the houses of their dreams in the boom years. And it's not an ATM machine for constant refinancing, either. Instead, for the past four years, ownership has been a culprit of distress. In June, one in every 411 housing units received a foreclosure filing, according to RealtyTrac Inc. Between 2006 and 2009, home prices fell more than 32%, according to the S&P/Case-Shiller Home Price Index.
Renting on the rise
With homeowner markets stressed, it appears renting has become more appealing than owning. Between 2004 and 2009, the number of renter households rose nearly 10% or by 3.4 million, according to a 2010 study of the Joint Center for Housing Studies of Harvard University. The rise was most dramatic in the Midwest, where growth of renter households swung upwards by 15.4% between 2004 to 2009. The South added the biggest number of renter households with a 1.2 million increase from 2004 to 2009, the study states.
All that has made Capitol Hill rethink its definition of the American Dream. As recently as the Clinton and George W. Bush administrations, the mantra of homeownership was almost synonymous to civic duty, but top policymakers now say that homeownership isn't necessarily good for everyone.
In May, U.S. Housing and Urban Development Secretary Shaun Donovan testified before a House committee that the financial crisis proved the need for a better balance between ownership and rental housing. And HUD senior official Raphael Bostic last week told the Washington Post: "In previous eras, we haven't seen people question whether homeownership was the right decision. It was just assumed that's where you want to go," Bostic said. "You're not going to hear us say that."
Owning a home wasn't always as easy as the liar loans of 2000's made it. When the economy went bust during the Great Depression, legislation intended to stimulate plummeting housing starts and defaulting mortgages laid the foundation for a bigger role of government over the housing market. Hoover signed the Federal Home Loan Act, and in 1933, Franklin D. Roosevelt created the Home Owners' Loan Corporation to provide low interest loans.
And the government was just getting started: a flurry of legislation was passed over the ensuing decades, helping veterans, minorities and the populace as a whole secure mortgages. But it appears the pendulum has swung.
"The government shouldn't blindly encourage homeownership," says Joe Gyourko, real estate finance professor at University of Pennsylvania's Wharton School. "If the government does anything the government should encourage people to make the right decision."
Gyourko says that he's not entirely against the idea of homeownership. After all, as a father of two, the 53-year-old professor owns a home. But he stresses that ownership should be looked at more broadly -- beyond any kind of long-term investment or cost benefit over renting.
Owners don't pay the landlord, but they pay taxes and maintenance costs on their house, and Gyourko says those costs can end up being roughly the same.
As far as buying a house as a smart long-term investment, Gyourko says that's not always true. He says between 1975 and 2008, the price for houses of similar quality and size appreciated an average of about 1% per year after inflation. Investors could have earned more by buying Treasury bills.
The post-crisis role the federal government decides to play in the housing market remains to be seen. In response to plunging home prices and record foreclosures rates, the Obama administration is pursuing an overhaul of policies that could put much less focus on homeownership. The administration could also scale down government support of home loans and put more focus on affordable rentals, but it isn't clear what direction officials will take.
The issues with Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500), the mortgage-finance giants seized by the government in September 2008 amid huge problems with bad loans, remain a touchy topic with lawmakers.Their combined bailout, according to some estimates, could reach $1 trillion -- a figure some might pin as the ultimate cost of generations of policies geared to favor home ownership.
Many blame the agencies' loose lending practices for contributing to the financial crisis. Republicans wanted the mortgage giants' fates to be addressed in the recently approved Dodd-Frank bill overhauling the nation's financial regulations, but that didn't happen.
However lawmakers define the government's role in the housing market, consumers have already begun redefining the American Dream: One where it has become socially OK to mail in a rent check rather than a mortgage coupon.
FORTUNE -- Modern America has long paired the "American Dream" with home ownership. The idea of staying put, paying property taxes and periodically mowing the lawn belonged to citizens who were somehow more American than the poor saps who could only afford to rent the place they called home.
The notion isn't accidental. Ownership and the American Dream are deeply linked in government policies that favor mortgages over rent payments, dating back before Herbert Hoover was elected president in 1929. As secretary of commerce, amid the Red Scare, Hoover trumpeted homeownership, believing that if one had an equity stake in the country, they'd less likely fall under the spell of Communism. What followed during the Great Depression were a spate of federal measures to help troubled homeowners, at a time when half of all mortgages were in default.
CommentMassive government programs supporting ownership still exist today, but record home foreclosures and spiraling prices have forced a redefinition of the American Dream -- one that includes renting.
In today's weak housing market, ownership has ceased to be an investment vehicle that millions used to trade up into the houses of their dreams in the boom years. And it's not an ATM machine for constant refinancing, either. Instead, for the past four years, ownership has been a culprit of distress. In June, one in every 411 housing units received a foreclosure filing, according to RealtyTrac Inc. Between 2006 and 2009, home prices fell more than 32%, according to the S&P/Case-Shiller Home Price Index.
Renting on the rise
With homeowner markets stressed, it appears renting has become more appealing than owning. Between 2004 and 2009, the number of renter households rose nearly 10% or by 3.4 million, according to a 2010 study of the Joint Center for Housing Studies of Harvard University. The rise was most dramatic in the Midwest, where growth of renter households swung upwards by 15.4% between 2004 to 2009. The South added the biggest number of renter households with a 1.2 million increase from 2004 to 2009, the study states.
All that has made Capitol Hill rethink its definition of the American Dream. As recently as the Clinton and George W. Bush administrations, the mantra of homeownership was almost synonymous to civic duty, but top policymakers now say that homeownership isn't necessarily good for everyone.
In May, U.S. Housing and Urban Development Secretary Shaun Donovan testified before a House committee that the financial crisis proved the need for a better balance between ownership and rental housing. And HUD senior official Raphael Bostic last week told the Washington Post: "In previous eras, we haven't seen people question whether homeownership was the right decision. It was just assumed that's where you want to go," Bostic said. "You're not going to hear us say that."
Owning a home wasn't always as easy as the liar loans of 2000's made it. When the economy went bust during the Great Depression, legislation intended to stimulate plummeting housing starts and defaulting mortgages laid the foundation for a bigger role of government over the housing market. Hoover signed the Federal Home Loan Act, and in 1933, Franklin D. Roosevelt created the Home Owners' Loan Corporation to provide low interest loans.
And the government was just getting started: a flurry of legislation was passed over the ensuing decades, helping veterans, minorities and the populace as a whole secure mortgages. But it appears the pendulum has swung.
"The government shouldn't blindly encourage homeownership," says Joe Gyourko, real estate finance professor at University of Pennsylvania's Wharton School. "If the government does anything the government should encourage people to make the right decision."
Gyourko says that he's not entirely against the idea of homeownership. After all, as a father of two, the 53-year-old professor owns a home. But he stresses that ownership should be looked at more broadly -- beyond any kind of long-term investment or cost benefit over renting.
Owners don't pay the landlord, but they pay taxes and maintenance costs on their house, and Gyourko says those costs can end up being roughly the same.
As far as buying a house as a smart long-term investment, Gyourko says that's not always true. He says between 1975 and 2008, the price for houses of similar quality and size appreciated an average of about 1% per year after inflation. Investors could have earned more by buying Treasury bills.
The post-crisis role the federal government decides to play in the housing market remains to be seen. In response to plunging home prices and record foreclosures rates, the Obama administration is pursuing an overhaul of policies that could put much less focus on homeownership. The administration could also scale down government support of home loans and put more focus on affordable rentals, but it isn't clear what direction officials will take.
The issues with Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500), the mortgage-finance giants seized by the government in September 2008 amid huge problems with bad loans, remain a touchy topic with lawmakers.Their combined bailout, according to some estimates, could reach $1 trillion -- a figure some might pin as the ultimate cost of generations of policies geared to favor home ownership.
Many blame the agencies' loose lending practices for contributing to the financial crisis. Republicans wanted the mortgage giants' fates to be addressed in the recently approved Dodd-Frank bill overhauling the nation's financial regulations, but that didn't happen.
However lawmakers define the government's role in the housing market, consumers have already begun redefining the American Dream: One where it has become socially OK to mail in a rent check rather than a mortgage coupon.
Friday, October 22, 2010
Contingency Strategies for a Smooth Sale
Great Tips for Sellers:
Contingency Strategies for a Smooth Sale
By Pat Mertz Esswein, Associate Editor
From Kiplinger's Personal Finance magazine, April 2010
Contingencies protect you and your buyer, but they can also sabotage a sale.
Once you've negotiated price and closing costs with your buyer, it's time to get down to the special provisions of the contract -- the contingencies -- that protect your interests and those of your buyer. As a seller, you want to ensure that the buyer's contingencies don't ruin the deal for you.
Sellers most often include in the contract two common contingencies: The purchase contingency gives you 30 or 45 days to buy your next home, and the leaseback allows you to live in your current home for a while after closing. Those provisions will help you avoid the hassle of moving twice -- first into a rental, and then into your next home. Seller Steve Vieux asked his buyer for both contingencies, as did the sellers who sold him his next home. The downside? While you're renting your former home, you're responsible for fixing anything that fails on your watch. For example, Vieux had to pay to replace a water heater.
--------------------------------------------------------------------------------
Buyers typically request a financing contingency. If they fail to get a mortgage or loan terms agreeable to them, they can bail out of your contract and you must refund their earnest-money deposit. This could send you back to square one, looking for a new buyer. You could avoid such a delay by accepting cash-only offers, but that limits the number of buyers.
The best strategy is to price your home so you receive multiple offers, and then you can be selective. Choose the buyer whose financing is most likely to go through. "Twenty percent down is a very warm and fuzzy feeling. Fifty percent is beautiful, and cash is great," says agent Janis Morgan.
If your house will appeal to first-time buyers, they may want Federal Housing Administration financing because it requires a down payment of only 3.5%. Be forewarned: If the home has defects that will cost a borrower of modest means too much to repair, you will have to ante up the cost of repairs or FHA will refuse financing for that home.
If you're anxious to settle and move on, consider passing up a higher offer with a financing contingency in favor of a lower one without it, says agent Bob Bower. Don't agree to a financing contingency unless the buyers present a preapproval letter from their lender (or a "certificate of eligibility," if they will seek a VA loan) with their offer.
Most buyers will want a home-inspection contingency. Purchase contracts generally say that sellers will turn over homes in "normal" working condition (unless the property is being sold "as is"). If the inspection turns up a problem that affects the home's habitability, you'll have to repair it. If the inspection turns up other, lesser issues, the buyer may ask you to take care of those, too. You can protect yourself from excessive costs by setting a limit upfront on the contingency.
Contingency Strategies for a Smooth Sale
By Pat Mertz Esswein, Associate Editor
From Kiplinger's Personal Finance magazine, April 2010
Contingencies protect you and your buyer, but they can also sabotage a sale.
Once you've negotiated price and closing costs with your buyer, it's time to get down to the special provisions of the contract -- the contingencies -- that protect your interests and those of your buyer. As a seller, you want to ensure that the buyer's contingencies don't ruin the deal for you.
Sellers most often include in the contract two common contingencies: The purchase contingency gives you 30 or 45 days to buy your next home, and the leaseback allows you to live in your current home for a while after closing. Those provisions will help you avoid the hassle of moving twice -- first into a rental, and then into your next home. Seller Steve Vieux asked his buyer for both contingencies, as did the sellers who sold him his next home. The downside? While you're renting your former home, you're responsible for fixing anything that fails on your watch. For example, Vieux had to pay to replace a water heater.
--------------------------------------------------------------------------------
Buyers typically request a financing contingency. If they fail to get a mortgage or loan terms agreeable to them, they can bail out of your contract and you must refund their earnest-money deposit. This could send you back to square one, looking for a new buyer. You could avoid such a delay by accepting cash-only offers, but that limits the number of buyers.
The best strategy is to price your home so you receive multiple offers, and then you can be selective. Choose the buyer whose financing is most likely to go through. "Twenty percent down is a very warm and fuzzy feeling. Fifty percent is beautiful, and cash is great," says agent Janis Morgan.
If your house will appeal to first-time buyers, they may want Federal Housing Administration financing because it requires a down payment of only 3.5%. Be forewarned: If the home has defects that will cost a borrower of modest means too much to repair, you will have to ante up the cost of repairs or FHA will refuse financing for that home.
If you're anxious to settle and move on, consider passing up a higher offer with a financing contingency in favor of a lower one without it, says agent Bob Bower. Don't agree to a financing contingency unless the buyers present a preapproval letter from their lender (or a "certificate of eligibility," if they will seek a VA loan) with their offer.
Most buyers will want a home-inspection contingency. Purchase contracts generally say that sellers will turn over homes in "normal" working condition (unless the property is being sold "as is"). If the inspection turns up a problem that affects the home's habitability, you'll have to repair it. If the inspection turns up other, lesser issues, the buyer may ask you to take care of those, too. You can protect yourself from excessive costs by setting a limit upfront on the contingency.
Wednesday, September 29, 2010
Luxury Sales Are Clicking At @properties
@properties has built the #1 luxury market share in Chicago* thanks to the knowledge, skill and hard work of our incomparable real estate professionals, as well as marketing programs that generate maximum exposure for listings priced at $1 million and above. Now high-end buyers and sellers alike will benefit from our latest marketing innovation: the @properties Luxury Collection Online Magazine.
Click through dozens of pages of spectacular homes - each featuring an average of seven professionally shot color photos. And link directly to the listing on the @properties web site for complete property details, additional photos, video tours, neighborhood info, school ratings and more. Separate editions highlight city and North Shore properties.
The @properties Luxury Collection Online Magazine can be viewed online anytime. It’s updated quarterly and e-mailed to our database of more than 450,000 clients, prospects and subscribers twice a year (winter and summer). Whether you’re looking for a new luxury home or just looking for inspiration, be sure to check out this exciting new feature at atproperties.com.
5000 REASONS TO CELEBRATE
For the 5th consecutive year, @properties has been named to the prestigious Inc. 500 | Inc. 5000 list of the fastest growing private companies in America. We continue to grow, create local jobs, and, most importantly, sell homes throughout Chicagoland.
@properties and the Inc. 500 | 5000
Inc. 500: 2006Inc. 5000: 2007, 2008, 2009, 2010One of only 38 real estate companies in the Inc. 5000 The only Illinois broker of for-sale homes Among the top 25% of real estate companies by revenueGRAND OPENING IN WINNETKA
Moving to the North Shore? @properties is proud to announce the grand opening of our new Winnetka office, located at 30 Green Bay Road, just south of the Indian Hill Metra station. Peruse listings in our state-of-the-art conference rooms, learn about our industry-leading marketing programs and see why @properties is the fastest-growing real estate brokerage firm on the North Shore. Contact me to make an appointment.
* #1 luxury market share based on closed-sales dollar volume, year to date, for transactions $1 million and above in the city of Chicago. Source: BrokerMetrics / MRED LLC.
Inc. 500|5000 is a registered trademark of Mansueto Ventures LLC.
Dave Straub
@properties
773.255.3180
Click through dozens of pages of spectacular homes - each featuring an average of seven professionally shot color photos. And link directly to the listing on the @properties web site for complete property details, additional photos, video tours, neighborhood info, school ratings and more. Separate editions highlight city and North Shore properties.
The @properties Luxury Collection Online Magazine can be viewed online anytime. It’s updated quarterly and e-mailed to our database of more than 450,000 clients, prospects and subscribers twice a year (winter and summer). Whether you’re looking for a new luxury home or just looking for inspiration, be sure to check out this exciting new feature at atproperties.com.
5000 REASONS TO CELEBRATE
For the 5th consecutive year, @properties has been named to the prestigious Inc. 500 | Inc. 5000 list of the fastest growing private companies in America. We continue to grow, create local jobs, and, most importantly, sell homes throughout Chicagoland.
@properties and the Inc. 500 | 5000
Inc. 500: 2006Inc. 5000: 2007, 2008, 2009, 2010One of only 38 real estate companies in the Inc. 5000 The only Illinois broker of for-sale homes Among the top 25% of real estate companies by revenueGRAND OPENING IN WINNETKA
Moving to the North Shore? @properties is proud to announce the grand opening of our new Winnetka office, located at 30 Green Bay Road, just south of the Indian Hill Metra station. Peruse listings in our state-of-the-art conference rooms, learn about our industry-leading marketing programs and see why @properties is the fastest-growing real estate brokerage firm on the North Shore. Contact me to make an appointment.
* #1 luxury market share based on closed-sales dollar volume, year to date, for transactions $1 million and above in the city of Chicago. Source: BrokerMetrics / MRED LLC.
Inc. 500|5000 is a registered trademark of Mansueto Ventures LLC.
Dave Straub
@properties
773.255.3180
Monday, September 6, 2010
Chicago renters, condo buyers could get protections
Daley proposal would increase conversion warning from 4 to 9 months.
Renters and condominium buyers in Chicago would get more protection from developers under a plan unveiled Thursday by Mayor Richard Daley, who acknowledged that it comes too late to protect people who had problems during the real estate boom that preceded the recession.
The proposal, which Daley will introduce at Wednesday's City Council meeting, would increase the forewarning developers have to give renters if they plan to convert apartments into condos from four months to nine months. It also would require landlords to give renters at least $1,500 to relocate if their building is going to be converted.
Developers also would have to give condo buyers a standardized "disclosure summary" about taxes and assessments on the property and the condition of the building before purchase, Daley said.
Though developers aren't doing much conversion work now because of Chicago's glut of condos and the depressed housing market, Daley said the proposal will be important when the city's real estate market heats up again.
"It's going to come back, and we want to be able to learn by mistakes, let's be realistic, things that did not take place in order to protect people, simple as that," the mayor said during a news conference at a park in the Belmont Cragin neighborhood on the Northwest Side.
"These proposals will serve residents and neighborhoods now, and when the housing market begins to rebound, so there's no better time to enact them into law," Daley said.
The proposed ordinance is based on the recommendations of the Condominium Conversion Task Force. The mayor appointed the group of aldermen, real estate agents, developers and renters' rights advocates in 2007 to recommend stronger standards. The group released its report Thursday.
jebyrne@tribune.com http://www.chicagotribune.com/news/local/ct-met-daley-0902-20100902,0,4498761.story
Renters and condominium buyers in Chicago would get more protection from developers under a plan unveiled Thursday by Mayor Richard Daley, who acknowledged that it comes too late to protect people who had problems during the real estate boom that preceded the recession.
The proposal, which Daley will introduce at Wednesday's City Council meeting, would increase the forewarning developers have to give renters if they plan to convert apartments into condos from four months to nine months. It also would require landlords to give renters at least $1,500 to relocate if their building is going to be converted.
Developers also would have to give condo buyers a standardized "disclosure summary" about taxes and assessments on the property and the condition of the building before purchase, Daley said.
Though developers aren't doing much conversion work now because of Chicago's glut of condos and the depressed housing market, Daley said the proposal will be important when the city's real estate market heats up again.
"It's going to come back, and we want to be able to learn by mistakes, let's be realistic, things that did not take place in order to protect people, simple as that," the mayor said during a news conference at a park in the Belmont Cragin neighborhood on the Northwest Side.
"These proposals will serve residents and neighborhoods now, and when the housing market begins to rebound, so there's no better time to enact them into law," Daley said.
The proposed ordinance is based on the recommendations of the Condominium Conversion Task Force. The mayor appointed the group of aldermen, real estate agents, developers and renters' rights advocates in 2007 to recommend stronger standards. The group released its report Thursday.
jebyrne@tribune.com http://www.chicagotribune.com/news/local/ct-met-daley-0902-20100902,0,4498761.story
Friday, August 13, 2010
The Hot List
The Hot List
It's August in Chicago. And that means it's hot. But when it comes to housing in Chicago the words "hot" and "real estate" rarely appear in the same sentence. Nevertheless, in deference to summer, we've come up with a list of what really is hot in the city real estate market. And believe it or not, we filled the page without breaking a sweat.
Low Interest Rates
In June, 30-year mortgage rates averaged around 4.75%. Less than 60 days later, the average rate on the 30-Year Fixed has dropped below 4.5%, its lowest level since Freddie Mac began surveying rates back in 1971. That's not hot; that's scorching.
Skip a Step
Low prices and the prospect of slow appreciation have many buyers taking a longer-term view of their home purchase. Buyers today are thinking about how the home they buy will meet their needs five to 10 years down the road versus the three- to five-year window that was common during the boom. As a result, many buyers are skipping a step on the housing ladder and purchasing larger homes they can grow into.
New Construction Deals
Price cuts and special financing programs have been effective in whittling down excess new-construction inventory in several areas including River North, the West Loop and the Loop. By the end of next year, new construction in these neighborhoods should be largely absorbed, with no new product scheduled to come online. Translation: if you like new, your time is now.
Shrewd Buyers
Buyers today are approaching the market not only with more information but also with a totally different psychology. The focus is on location and space, and value is the watchword in every price range from $200,000 to $2 million. If you're selling, be prepared to demonstrate that your home is the best in its class, because today's astute buyers won't settle for anything less.
Putting Down Roots
A large home, in good condition, near top-rated city schools is suddenly attainable for the first time in years. That's causing many homebuyers to rethink typical suburban migration patterns and put down roots in the city. And the neighborhood improvements that can result from long-term investment might just be one of the most positive outcomes of the housing bubble. That's hot...and very cool.
Buying, selling or just looking for more information -- I welcome the opportunity to help. And please remember that referrals are always hot.
Dave Straub
@properties
773.255.3180
It's August in Chicago. And that means it's hot. But when it comes to housing in Chicago the words "hot" and "real estate" rarely appear in the same sentence. Nevertheless, in deference to summer, we've come up with a list of what really is hot in the city real estate market. And believe it or not, we filled the page without breaking a sweat.
Low Interest Rates
In June, 30-year mortgage rates averaged around 4.75%. Less than 60 days later, the average rate on the 30-Year Fixed has dropped below 4.5%, its lowest level since Freddie Mac began surveying rates back in 1971. That's not hot; that's scorching.
Skip a Step
Low prices and the prospect of slow appreciation have many buyers taking a longer-term view of their home purchase. Buyers today are thinking about how the home they buy will meet their needs five to 10 years down the road versus the three- to five-year window that was common during the boom. As a result, many buyers are skipping a step on the housing ladder and purchasing larger homes they can grow into.
New Construction Deals
Price cuts and special financing programs have been effective in whittling down excess new-construction inventory in several areas including River North, the West Loop and the Loop. By the end of next year, new construction in these neighborhoods should be largely absorbed, with no new product scheduled to come online. Translation: if you like new, your time is now.
Shrewd Buyers
Buyers today are approaching the market not only with more information but also with a totally different psychology. The focus is on location and space, and value is the watchword in every price range from $200,000 to $2 million. If you're selling, be prepared to demonstrate that your home is the best in its class, because today's astute buyers won't settle for anything less.
Putting Down Roots
A large home, in good condition, near top-rated city schools is suddenly attainable for the first time in years. That's causing many homebuyers to rethink typical suburban migration patterns and put down roots in the city. And the neighborhood improvements that can result from long-term investment might just be one of the most positive outcomes of the housing bubble. That's hot...and very cool.
Buying, selling or just looking for more information -- I welcome the opportunity to help. And please remember that referrals are always hot.
Dave Straub
@properties
773.255.3180
Thursday, July 15, 2010
The New Normal
The New Normal Feeling
A Bit More...Well...Normal
Over the last few years, there has been a lot of talk in real estate circles about "the New Normal." At first, the New Normal meant the days of double-digit price appreciation were over. Then the financial crisis hit, and suddenly the New Normal became a barrage of bad news that seemed to never end. Eventually, the economy started to regain its footing, the Housing Tax Credit took hold, and the Chicago real estate market enjoyed a rally through the spring of 2010. Today, the tax credit is gone, and while trouble spots remain, the general sentiment is the worst is behind us. Finally, the New Normal is starting to feel a bit more...normal.
A number of data points support the trend toward normalization. Home prices as tracked by the Case Shiller index have returned to the historical trend line, and April marked the 12th straight month of improvement in the Chicago index. Though the data still shows a year-over-year price decline in the city, the fall-off has slowed dramatically. The inventory picture is also far more stable with a 10.4 month supply of homes on the market - a reduction of about 50 percent since June 2008.
The city housing market remains challenging, but equilibrium is slowly returning, which means today's low prices and record-low mortgage rates make the next six to twelve months a prime opportunity - especially for first-time and move-up buyers.
#1 in Chicago
Yet another phenomenon that is becoming the norm is seeing @properties atop the Chicago real estate market. Through the halfway point of 2010, in the city, @properties was #1 in total transactions, #1 in shortest average market time, #1 in dollar volume sold, and #1 in market share. We continue to gain strength, add marketing programs and increase our level of service for Chicago homebuyers and sellers - all of which gives our clients a distinct advantage in the marketplace. Thank you for making @properties #1.
I'd be delighted to help you gain (or regain) perspective on the real estate market in your area. Please feel free to contact me anytime. And if someone you know is looking to buy or sell a home, remember that I always appreciate your referrals.
Dave Straub
Realtor,@properties
Illinois Licensed Real Estate Salesperson
Member, NAR, IAR, CAR, MLS
773.255.3180 DIRECT
A Bit More...Well...Normal
Over the last few years, there has been a lot of talk in real estate circles about "the New Normal." At first, the New Normal meant the days of double-digit price appreciation were over. Then the financial crisis hit, and suddenly the New Normal became a barrage of bad news that seemed to never end. Eventually, the economy started to regain its footing, the Housing Tax Credit took hold, and the Chicago real estate market enjoyed a rally through the spring of 2010. Today, the tax credit is gone, and while trouble spots remain, the general sentiment is the worst is behind us. Finally, the New Normal is starting to feel a bit more...normal.
A number of data points support the trend toward normalization. Home prices as tracked by the Case Shiller index have returned to the historical trend line, and April marked the 12th straight month of improvement in the Chicago index. Though the data still shows a year-over-year price decline in the city, the fall-off has slowed dramatically. The inventory picture is also far more stable with a 10.4 month supply of homes on the market - a reduction of about 50 percent since June 2008.
The city housing market remains challenging, but equilibrium is slowly returning, which means today's low prices and record-low mortgage rates make the next six to twelve months a prime opportunity - especially for first-time and move-up buyers.
#1 in Chicago
Yet another phenomenon that is becoming the norm is seeing @properties atop the Chicago real estate market. Through the halfway point of 2010, in the city, @properties was #1 in total transactions, #1 in shortest average market time, #1 in dollar volume sold, and #1 in market share. We continue to gain strength, add marketing programs and increase our level of service for Chicago homebuyers and sellers - all of which gives our clients a distinct advantage in the marketplace. Thank you for making @properties #1.
I'd be delighted to help you gain (or regain) perspective on the real estate market in your area. Please feel free to contact me anytime. And if someone you know is looking to buy or sell a home, remember that I always appreciate your referrals.
Dave Straub
Realtor,@properties
Illinois Licensed Real Estate Salesperson
Member, NAR, IAR, CAR, MLS
773.255.3180 DIRECT
Friday, July 2, 2010
Drop in Interest Rates
Drop in Interest Rates
a Welcome Surprise
Just about everyone (myself included) expected mortgage interest rates to rise when the Treasury Department ended its $1.25 trillion purchase of mortgage-backed securities in March. But Europe's ongoing debt crisis has driven investors to the safety of Treasury notes, a benchmark for mortgage interest rates. And as the yield on Treasuries has come down so too have mortgages. Bankrate.com, a website that tracks interest rates, said it was hard to identify the last time mortgage rates were this low, but estimates put the timeline in the fall of 1956. Sock hop, anyone?
This latest development should come as welcome news to both home buyers and sellers. For buyers, today's interest rates could be even more valuable than the recently expired Federal Housing Tax Credit. The chart below compares today's interest rates with those from a year ago to illustrate the monthly, annual, 5-year and 10-year savings for a range of conforming and jumbo loan amounts. On loans upwards of $300,000, the 5-year savings exceed the maximum $8,000 tax credit. On jumbo loans, the savings are far more substantial.
Sellers also have reason to cheer the recent drop in rates. Bearish housing analysts predicted that the absence of the tax credit and an anticipated spike in interest rates would put new downward pressure on prices, which have begun to tick up in many markets and submarkets. With rates moving in the other direction, cheap money should help buoy prices - hopefully until the Europe situation and U.S. employment picture begin to brighten. Lower rates also create a wider pool of home buyers and should provide a sense of urgency to house hunters who are in the market this summer.
Source: Bankrate.com 30-year fixed-rate mortgage index, 6/23/10
For more information on how today's historically low interest rates affect your buying power or selling strategy, feel free to contact me. And remember, I always appreciate your referrals.
Dave Straub
Realtor,@properties
Illinois Licensed Real Estate Salesperson
Member, NAR, IAR, CAR, MLS
773.255.3180
a Welcome Surprise
Just about everyone (myself included) expected mortgage interest rates to rise when the Treasury Department ended its $1.25 trillion purchase of mortgage-backed securities in March. But Europe's ongoing debt crisis has driven investors to the safety of Treasury notes, a benchmark for mortgage interest rates. And as the yield on Treasuries has come down so too have mortgages. Bankrate.com, a website that tracks interest rates, said it was hard to identify the last time mortgage rates were this low, but estimates put the timeline in the fall of 1956. Sock hop, anyone?
This latest development should come as welcome news to both home buyers and sellers. For buyers, today's interest rates could be even more valuable than the recently expired Federal Housing Tax Credit. The chart below compares today's interest rates with those from a year ago to illustrate the monthly, annual, 5-year and 10-year savings for a range of conforming and jumbo loan amounts. On loans upwards of $300,000, the 5-year savings exceed the maximum $8,000 tax credit. On jumbo loans, the savings are far more substantial.
Sellers also have reason to cheer the recent drop in rates. Bearish housing analysts predicted that the absence of the tax credit and an anticipated spike in interest rates would put new downward pressure on prices, which have begun to tick up in many markets and submarkets. With rates moving in the other direction, cheap money should help buoy prices - hopefully until the Europe situation and U.S. employment picture begin to brighten. Lower rates also create a wider pool of home buyers and should provide a sense of urgency to house hunters who are in the market this summer.
Source: Bankrate.com 30-year fixed-rate mortgage index, 6/23/10
For more information on how today's historically low interest rates affect your buying power or selling strategy, feel free to contact me. And remember, I always appreciate your referrals.
Dave Straub
Realtor,@properties
Illinois Licensed Real Estate Salesperson
Member, NAR, IAR, CAR, MLS
773.255.3180
Monday, June 7, 2010
After the Tax Credit
What to do now
So the Housing Tax Credit has come and gone. The Treasury Department estimates that 1.8 million people took advantage of the credit at a cost to the government of about $13 billion. For those who missed out on the credit, there may be a tinge of disappointment. But in the days following the deadline we at @properties have been reassured by healthy market activity in showings, listings and contracts. Still, with the tax credit in the history books, it's a good time to ask, "What should I do now?"
If you're a buyer who was in the market prior to April 30, you've answered an important question. It's not just about finding the right deal. It's about finding the right home. The fact is buying a home today is a longer-term proposition than it was a few years ago, and a home has to work for you not only as a place to invest but as a place to live. From that point of view, $8,000 probably isn't a make or break. Of course that doesn't mean the right deal isn't out there – especially with today's low mortgage rates and plentiful inventory.
If you're a seller now is a good time to step back and evaluate pricing and positioning. With the increase in recent transaction volume, there are more comparable sales today than six months ago. If your home has been on the market for a while, it's a good idea to revisit the comparative market analysis. But it's also important to point out that we at @properties do not subscribe to the notion – as some brokers do – that sellers need to fill the government's role as a provider of homebuyer subsidies by automatically dropping asking prices or offering cash credits. The market needs to stand on its own, and we believe it can and will.
If you have questions about the real estate market, post tax credit, please contact me.
Celebrating 10 years and a new office
Finally, last month brought two important milestones for @properties. First, we announced that we will be opening a new North Shore office in Winnetka. We are set to begin construction on the office on Green Bay Road this month and should be open by late summer 2010. We are excited about serving the North Shore from this new location.
April also marked @properties' 10th anniversary. We opened our doors back in spring 2000 with one goal: to provide the best real estate brokerage service in Chicago. Today, we're the #1 broker in the city and the fastest-growing firm on the North Shore. Most importantly, our goal remains the same, and we're working harder than ever to see it through. Thank you to all of our clients, associates, partners, family and friends for making @properties a success.
Dave Straub
@properties
773.255.3180
http://www.atproperties.com/agents/davestraub/listings
So the Housing Tax Credit has come and gone. The Treasury Department estimates that 1.8 million people took advantage of the credit at a cost to the government of about $13 billion. For those who missed out on the credit, there may be a tinge of disappointment. But in the days following the deadline we at @properties have been reassured by healthy market activity in showings, listings and contracts. Still, with the tax credit in the history books, it's a good time to ask, "What should I do now?"
If you're a buyer who was in the market prior to April 30, you've answered an important question. It's not just about finding the right deal. It's about finding the right home. The fact is buying a home today is a longer-term proposition than it was a few years ago, and a home has to work for you not only as a place to invest but as a place to live. From that point of view, $8,000 probably isn't a make or break. Of course that doesn't mean the right deal isn't out there – especially with today's low mortgage rates and plentiful inventory.
If you're a seller now is a good time to step back and evaluate pricing and positioning. With the increase in recent transaction volume, there are more comparable sales today than six months ago. If your home has been on the market for a while, it's a good idea to revisit the comparative market analysis. But it's also important to point out that we at @properties do not subscribe to the notion – as some brokers do – that sellers need to fill the government's role as a provider of homebuyer subsidies by automatically dropping asking prices or offering cash credits. The market needs to stand on its own, and we believe it can and will.
If you have questions about the real estate market, post tax credit, please contact me.
Celebrating 10 years and a new office
Finally, last month brought two important milestones for @properties. First, we announced that we will be opening a new North Shore office in Winnetka. We are set to begin construction on the office on Green Bay Road this month and should be open by late summer 2010. We are excited about serving the North Shore from this new location.
April also marked @properties' 10th anniversary. We opened our doors back in spring 2000 with one goal: to provide the best real estate brokerage service in Chicago. Today, we're the #1 broker in the city and the fastest-growing firm on the North Shore. Most importantly, our goal remains the same, and we're working harder than ever to see it through. Thank you to all of our clients, associates, partners, family and friends for making @properties a success.
Dave Straub
@properties
773.255.3180
http://www.atproperties.com/agents/davestraub/listings
Monday, April 19, 2010
Chicago's Temperate Spring
Chicago's Temperate Spring
(the weather's not bad either)
A real spring. It's a rarity in Chicago. We're talking flowers, warm weather and picture perfect Opening Days on both sides of town. Spring 2010 not only arrived with great weather; it revealed a fair real estate market as well.
A sampling of data from nearly 40 Chicago neighborhoods and North Shore communities shows a market that is vastly improved from last year. At properties analyzed inventory, sales and market times from the first quarter of 2009 vs. the first quarter of 2010. Year-over-year sales activity was up significantly from Hyde Park to Lake Forest and inventory levels and market times came down as buyers and sellers moved closer on price in a number of submarkets.
Closed sales were up 100% or more in several areas, including Lincoln Park, Rogers Park and the Loop in the city, and Highland Park, Kenilworth, Lake Bluff, Lake Forest and Northbrook on the North Shore – an encouraging sign heading into the peak spring market. A nearly universal increase in homes under contract seems to confirm the notion that the market is gaining traction.
Still, with predictions and postulations filling the spring air like milkweed, the next couple of months will be an important measure of the local market. Fortunately, it's easy to stay informed with At properties' Market Reports. Just log on and choose a neighborhood or town from the interactive map. Then view the latest market data. Of course, numbers alone don't account for all of the factors affecting real estate in your neighborhood. For that, there's nothing like a knowledgeable REALTOR®.
Spring in Chicago can be unpredictable, but at least this spring's real estate market is looking a little more temperate. So, if you or someone you know is thinking about buying or selling a home in the coming months, please contact me. And remember, I always appreciate your referrals.
Dave Straub 773.255.3180
(the weather's not bad either)
A real spring. It's a rarity in Chicago. We're talking flowers, warm weather and picture perfect Opening Days on both sides of town. Spring 2010 not only arrived with great weather; it revealed a fair real estate market as well.
A sampling of data from nearly 40 Chicago neighborhoods and North Shore communities shows a market that is vastly improved from last year. At properties analyzed inventory, sales and market times from the first quarter of 2009 vs. the first quarter of 2010. Year-over-year sales activity was up significantly from Hyde Park to Lake Forest and inventory levels and market times came down as buyers and sellers moved closer on price in a number of submarkets.
Closed sales were up 100% or more in several areas, including Lincoln Park, Rogers Park and the Loop in the city, and Highland Park, Kenilworth, Lake Bluff, Lake Forest and Northbrook on the North Shore – an encouraging sign heading into the peak spring market. A nearly universal increase in homes under contract seems to confirm the notion that the market is gaining traction.
Still, with predictions and postulations filling the spring air like milkweed, the next couple of months will be an important measure of the local market. Fortunately, it's easy to stay informed with At properties' Market Reports. Just log on and choose a neighborhood or town from the interactive map. Then view the latest market data. Of course, numbers alone don't account for all of the factors affecting real estate in your neighborhood. For that, there's nothing like a knowledgeable REALTOR®.
Spring in Chicago can be unpredictable, but at least this spring's real estate market is looking a little more temperate. So, if you or someone you know is thinking about buying or selling a home in the coming months, please contact me. And remember, I always appreciate your referrals.
Dave Straub 773.255.3180
Sunday, March 14, 2010
A New Window of Opportunity
The lure of contemporary floor plans, custom finishes and upscale amenities drew Chicagoans to new construction in record numbers in the early 2000s. Now, as the market stabilizes, new construction has become attractive once again. In fact, today might be the best opportunity to invest in a new home for years to come. Here's why:
Below Replacement Cost - While land has gotten significantly less expensive, labor and material costs have not come down proportionately. That means many developers simply cannot build the homes they are selling today for the prices at which they're being offered.
See Before You Buy - Traditionally, one of the biggest obstacles to purchasing new construction was buying from a floor plan. However, almost all new homes on the market today are completed. That means buyers can see room sizes, touch finishes and experience views before making a decision – a luxury that wasn't available at the height of the market.
Locked and Low - Another obstacle that has been removed is interest-rate uncertainty. Buying new construction used to mean rolling the dice on where rates would be when your home was finished six to 18 months after you signed a contract. With today's move-in-ready inventory, buyers are virtually assured the lowest rates in history.
Tax Credit - The Federal Homebuyer Tax Credit (up to $8,000 for first-time buyers and up to $6,500 for move-up buyers) is available for new-home purchases as well as re-sales. With the April 30 contract deadline approaching, builder inventory gives new-construction buyers some added flexibility.
Cycling Out - Believe it or not, if you like the idea of owning a brand new condominium in downtown Chicago, the window of opportunity is closing. While 3,400 new condos were delivered downtown in 2009, only 1,200 will be finished this year. In 2011, less than 300 new condos are slated for delivery, and no new condominium deliveries are scheduled for 2012 or beyond.*
Buying or selling, new or existing, I'm here to help with all of your real estate needs. Contact me anytime, and please remember that I always appreciate your referrals.
*Source: Appraisal Research Counselors Downtown Benchmark Report
Below Replacement Cost - While land has gotten significantly less expensive, labor and material costs have not come down proportionately. That means many developers simply cannot build the homes they are selling today for the prices at which they're being offered.
See Before You Buy - Traditionally, one of the biggest obstacles to purchasing new construction was buying from a floor plan. However, almost all new homes on the market today are completed. That means buyers can see room sizes, touch finishes and experience views before making a decision – a luxury that wasn't available at the height of the market.
Locked and Low - Another obstacle that has been removed is interest-rate uncertainty. Buying new construction used to mean rolling the dice on where rates would be when your home was finished six to 18 months after you signed a contract. With today's move-in-ready inventory, buyers are virtually assured the lowest rates in history.
Tax Credit - The Federal Homebuyer Tax Credit (up to $8,000 for first-time buyers and up to $6,500 for move-up buyers) is available for new-home purchases as well as re-sales. With the April 30 contract deadline approaching, builder inventory gives new-construction buyers some added flexibility.
Cycling Out - Believe it or not, if you like the idea of owning a brand new condominium in downtown Chicago, the window of opportunity is closing. While 3,400 new condos were delivered downtown in 2009, only 1,200 will be finished this year. In 2011, less than 300 new condos are slated for delivery, and no new condominium deliveries are scheduled for 2012 or beyond.*
Buying or selling, new or existing, I'm here to help with all of your real estate needs. Contact me anytime, and please remember that I always appreciate your referrals.
*Source: Appraisal Research Counselors Downtown Benchmark Report
Friday, February 12, 2010
Degrees of Control
The past 18 months have taught us many things, not the least of which is that we don't have control over a number of variables that affect the real estate market. However, we do have control over the actions we take to prepare for and react to these variables. During the next 60 to 90 days, some significant housing-related changes are imminent. We can't control those changes, but to a certain degree we can control how they affect us.
Can't Control: Expiration of Federal Housing Tax Credit
Can Control: Purchase Date / Closing Date
While we can't control how the expiration of the Federal Housing Tax Credit will affect the real estate market, it is an absolute certainty that qualified first-time buyers will receive up to $8,000 and qualified repeat buyers will receive up to $6,500 if they enter into a purchase contract by April 30 and close by June 30. With less than 90 days until the expiration of the Federal Housing Tax Credit, buyers need to be in the market now.
Can't Control: Mortgage Interest Rates
Can Control: Locking in Today's Rates
No one knows what will happen to mortgage interest rates when the Fed ends its $1.25 trillion purchase of mortgage backed securities in a few weeks. But one thing is for sure. Home buyers who lock in their interest rate today will benefit from some of the best mortgage financing conditions in history.
Can't Control: Selling Price
Can Control: Asking Price
If you're a seller, the price you paid for your home or the amount you owe on your mortgage has no bearing on your home's ultimate selling price. What does determine that price is the market. And today sellers must show consideration for the market with correct pricing right out of the gate. The chart below shows just how important Original List Price (OLP) is to selling your home for the highest possible price in the shortest amount of time.
2009 Sales Data
Homes with no price changes Homes with at least one price change
Average selling price as a percentage of OLP Average days on market Average selling price as a percentage of OLP Average Days on market
96%
116
82%
240
Source: Agent Metrics, MRED LLC data, 2009, Selling Price to Original Listing Price, City of Chicago.
One more thing you can control is your choice of real estate agent. Thank you for allowing me to serve you, and please contact me if you or anyone you know needs help navigating today’s real estate market.
Can't Control: Expiration of Federal Housing Tax Credit
Can Control: Purchase Date / Closing Date
While we can't control how the expiration of the Federal Housing Tax Credit will affect the real estate market, it is an absolute certainty that qualified first-time buyers will receive up to $8,000 and qualified repeat buyers will receive up to $6,500 if they enter into a purchase contract by April 30 and close by June 30. With less than 90 days until the expiration of the Federal Housing Tax Credit, buyers need to be in the market now.
Can't Control: Mortgage Interest Rates
Can Control: Locking in Today's Rates
No one knows what will happen to mortgage interest rates when the Fed ends its $1.25 trillion purchase of mortgage backed securities in a few weeks. But one thing is for sure. Home buyers who lock in their interest rate today will benefit from some of the best mortgage financing conditions in history.
Can't Control: Selling Price
Can Control: Asking Price
If you're a seller, the price you paid for your home or the amount you owe on your mortgage has no bearing on your home's ultimate selling price. What does determine that price is the market. And today sellers must show consideration for the market with correct pricing right out of the gate. The chart below shows just how important Original List Price (OLP) is to selling your home for the highest possible price in the shortest amount of time.
2009 Sales Data
Homes with no price changes Homes with at least one price change
Average selling price as a percentage of OLP Average days on market Average selling price as a percentage of OLP Average Days on market
96%
116
82%
240
Source: Agent Metrics, MRED LLC data, 2009, Selling Price to Original Listing Price, City of Chicago.
One more thing you can control is your choice of real estate agent. Thank you for allowing me to serve you, and please contact me if you or anyone you know needs help navigating today’s real estate market.
Wednesday, January 20, 2010
@properties Is #1
@properties Is #1
2009 was a challenging year for businesses across the globe. Some companies took it sitting down. Not @properties. We invested in new marketing and technology, opened new offices, and expanded programs to serve you better. The result: Our independent locally-owned company is stronger today than ever before. In fact, @properties far and away leads the Chicago market in more key categories than any other real estate company. And that means more resources, better service and ultimately better results for you.
@properties is clearly #1.
2009 Market Performance #1 in Market Share (City): 12.4%
#3 in Market Share (Northern Illinois Region): 4.4%
#1 Increase in Market Share (City): 28.0%
#1 Increase in Market Share (Northern Illinois Region): 18.8%
#2 Increase in Market Share (North Shore): 68.6%
#1 New Construction Market Share (City): 16.5%
#1 Buyer's Representative (City): 12.0%
#1 Seller's Representative (City): 12.9%
#1 Average Market Time (Northern Illinois Region): 147 Days
#1 Selling Price to Original Listing Price (Northern Illinois Region): 93.8%
For more information on @properties' services or your local market area, please contact me. I'm here to help.
Source: MRED, LLC, 1/1/09-12/31/09. Based on top 10 companies per category. Market share figures are based on sales volume.
2009 was a challenging year for businesses across the globe. Some companies took it sitting down. Not @properties. We invested in new marketing and technology, opened new offices, and expanded programs to serve you better. The result: Our independent locally-owned company is stronger today than ever before. In fact, @properties far and away leads the Chicago market in more key categories than any other real estate company. And that means more resources, better service and ultimately better results for you.
@properties is clearly #1.
2009 Market Performance #1 in Market Share (City): 12.4%
#3 in Market Share (Northern Illinois Region): 4.4%
#1 Increase in Market Share (City): 28.0%
#1 Increase in Market Share (Northern Illinois Region): 18.8%
#2 Increase in Market Share (North Shore): 68.6%
#1 New Construction Market Share (City): 16.5%
#1 Buyer's Representative (City): 12.0%
#1 Seller's Representative (City): 12.9%
#1 Average Market Time (Northern Illinois Region): 147 Days
#1 Selling Price to Original Listing Price (Northern Illinois Region): 93.8%
For more information on @properties' services or your local market area, please contact me. I'm here to help.
Source: MRED, LLC, 1/1/09-12/31/09. Based on top 10 companies per category. Market share figures are based on sales volume.
Friday, January 8, 2010
Local commercial delinquencies dip in likely ‘anomaly’
By Alby Gallun, Dec. 14, 2009
(Crain’s) — Local banks reported a lower percentage of troubled commercial real estate loans in the third quarter, though delinquencies are likely to resume their climb over the next year because of depressed property values and the languishing economy.
The delinquency rate for commercial mortgages at Chicago-area banks fell to 5.9% in the quarter, down from 6.2% in the second quarter, according to Foresight Analytics LLC, an Oakland, Calif.-based research firm. That’s still up sharply from a rate of 3.5% a year earlier.
The third-quarter drop is probably a “statistical anomaly,” not the beginning of a turnaround, says Foresight Partner Matthew Anderson.
With occupancies and rents at many properties continuing to decline, more borrowers will struggle to keep up with their monthly loan payments, especially those who piled on debt when lending was loose.
Other investors will default as loans come due and they struggle to find replacement financing.
Though distress continues to build, regulators are showing flexibility in how banks deal with problem loans, one reason Mr. Anderson expects it could take a lot longer to clean up the financial mess than many observers previously believed.
And many vulture investors could find it harder than expected to scoop up distressed properties on the cheap.
“You’ve got almost all the ingredients for a massive wave of foreclosures or loan sales,” he says. “The part that’s missing is the regulatory pressure.”
Chicago is faring worse than the nation as whole, probably because the job market, a key driver of demand for real estate, is especially bad here, Mr. Anderson says.
Chicago’s third-quarter delinquency rate ranked 14th highest among the 100 biggest U.S. metropolitan areas, and it exceeded the national rate of 4.6%, according to Foresight.
Though he doesn’t offer a forecast for Chicago, Mr. Anderson expects the U.S. delinquency rate to peak at 7.5% to 8.0% near the end of 2010. That would be the highest since 1991, during the last commercial property crash, when the rate hit about 9.5%.
The Foresight data, which is based on bank regulatory filings, does not cover loans packaged and sold off as commercial mortgage-backed securities (CMBS), a segment of the market blamed for some of the biggest lending excess during the boom.
Foresight calculates the delinquency rate by dividing the dollar value of delinquent loans by the value of all outstanding mortgages on operating commercial properties. A loan is classified as delinquent if it’s at least 30 days past due.
Foresight also tracks the delinquency rate for construction and land loans, which hit a new high locally of 24% in the third quarter, up from 21.3% in the second quarter and 13.7% in the year-ago period.
One big source of distress: residential builders who have finished projects but are struggling to sell them out. Others are sitting on undeveloped property that has plunged in value, and they can’t develop it or refinance.
Though banks are required to write off bad loans, federal regulators issued new guidelines in October that could take some of the pressure off. The new rules encourage “loan modifications and restructurings, which will curb defaults associated with the wave of upcoming maturities,” Real Capital Analytics, a New York-research firm, writes in a recent report.
That’s good news for some banks on the edge, but “it could have the unintended consequence of stretching out the whole adjustment process,” Mr. Anderson says. Originally, he expected banks to clear out their bad loans within two years. Now he expects it to take four to five.
In the Chicago area, 398 commercial properties and developments are in various stages of distress, accounting for $5.6 billion in loans, according to Real Capital. The retail sector represents the biggest source of trouble, with $1.3 billion in troubled loans, followed by hotels, at $1.0 billion, and apartments, at $848 million.
(Crain’s) — Local banks reported a lower percentage of troubled commercial real estate loans in the third quarter, though delinquencies are likely to resume their climb over the next year because of depressed property values and the languishing economy.
The delinquency rate for commercial mortgages at Chicago-area banks fell to 5.9% in the quarter, down from 6.2% in the second quarter, according to Foresight Analytics LLC, an Oakland, Calif.-based research firm. That’s still up sharply from a rate of 3.5% a year earlier.
The third-quarter drop is probably a “statistical anomaly,” not the beginning of a turnaround, says Foresight Partner Matthew Anderson.
With occupancies and rents at many properties continuing to decline, more borrowers will struggle to keep up with their monthly loan payments, especially those who piled on debt when lending was loose.
Other investors will default as loans come due and they struggle to find replacement financing.
Though distress continues to build, regulators are showing flexibility in how banks deal with problem loans, one reason Mr. Anderson expects it could take a lot longer to clean up the financial mess than many observers previously believed.
And many vulture investors could find it harder than expected to scoop up distressed properties on the cheap.
“You’ve got almost all the ingredients for a massive wave of foreclosures or loan sales,” he says. “The part that’s missing is the regulatory pressure.”
Chicago is faring worse than the nation as whole, probably because the job market, a key driver of demand for real estate, is especially bad here, Mr. Anderson says.
Chicago’s third-quarter delinquency rate ranked 14th highest among the 100 biggest U.S. metropolitan areas, and it exceeded the national rate of 4.6%, according to Foresight.
Though he doesn’t offer a forecast for Chicago, Mr. Anderson expects the U.S. delinquency rate to peak at 7.5% to 8.0% near the end of 2010. That would be the highest since 1991, during the last commercial property crash, when the rate hit about 9.5%.
The Foresight data, which is based on bank regulatory filings, does not cover loans packaged and sold off as commercial mortgage-backed securities (CMBS), a segment of the market blamed for some of the biggest lending excess during the boom.
Foresight calculates the delinquency rate by dividing the dollar value of delinquent loans by the value of all outstanding mortgages on operating commercial properties. A loan is classified as delinquent if it’s at least 30 days past due.
Foresight also tracks the delinquency rate for construction and land loans, which hit a new high locally of 24% in the third quarter, up from 21.3% in the second quarter and 13.7% in the year-ago period.
One big source of distress: residential builders who have finished projects but are struggling to sell them out. Others are sitting on undeveloped property that has plunged in value, and they can’t develop it or refinance.
Though banks are required to write off bad loans, federal regulators issued new guidelines in October that could take some of the pressure off. The new rules encourage “loan modifications and restructurings, which will curb defaults associated with the wave of upcoming maturities,” Real Capital Analytics, a New York-research firm, writes in a recent report.
That’s good news for some banks on the edge, but “it could have the unintended consequence of stretching out the whole adjustment process,” Mr. Anderson says. Originally, he expected banks to clear out their bad loans within two years. Now he expects it to take four to five.
In the Chicago area, 398 commercial properties and developments are in various stages of distress, accounting for $5.6 billion in loans, according to Real Capital. The retail sector represents the biggest source of trouble, with $1.3 billion in troubled loans, followed by hotels, at $1.0 billion, and apartments, at $848 million.
Tuesday, January 5, 2010
Downtown apartments slip as glut looms
(Crain’s) — After taking two steps forward, downtown apartment landlords took one step back in the third quarter.
Demand for apartments remains surprisingly strong, but competition for tenants is heating up amid a swelling supply of new units. That’s one reason rents and occupancies at high-end downtown buildings slipped in the third quarter after rising in the first two, resuming a downward trend that began more than two years ago, according to a report by Appraisal Research Counselors.
“It’s really not a signal that it’s a weak market,” says Ron DeVries, vice president at the Chicago-based real estate consulting firm. “Demand is strong. We’ve just got a supply bubble right now.”
The average net effective rent at Class A downtown apartment buildings fell to $2.10 a square foot in the third quarter, down 3.2% from the second quarter and 7.1% from the year-earlier period, according to Appraisal Research.
Effective rents, which include concessions such as free rent, have fallen 10.6% from their peak of $2.35 in third-quarter 2007.
The average Class A occupancy also declined, to 91.9%, down from 93.4% in the second quarter and 92.8% in the year-ago period.
Demand for apartments typically falls in a recession as more renters try to save money by doubling up or moving in with their parents. But that hasn’t happened in downtown Chicago, where more people are renting now than were before the economy went south.
Renters occupied 17,617 downtown apartments surveyed by Appraisal Research at the end up the third quarter, up 16.7% from 15,093 two years earlier. Appraisal Research tracks about 80% of the apartments in downtown Chicago.
Normally, apartment landlords lose a certain percentage of tenants who move out to buy a condominium or single-family home. But the turnover rate has slowed dramatically, possibly because would-be buyers are hesitant to commit to a mortgage when the economy is so shaky and condo vales could fall further, Mr. DeVries says. Other renters simply may not be able to qualify for a mortgage.
“The path to home ownership is a lot tougher right now,” Mr. DeVries says.
While that’s good for landlords, the current building boom isn’t. Developers have added 3,270 units to the downtown apartment market in 2008 and 2009 and will complete another 2,236 next year, boosting the total downtown inventory by 25%, according to Appraisal Research.
“I could still see demand remaining reasonable, but I could see pressure on rents because of the supply,” says Michael Newman, president and CEO of Golub & Co., the Chicago-based developer of Streeter Place, a new 480-unit apartment tower at 355 E. Ohio St.
Golub is offering tenants two months of free rent on a 12- to 14-month lease in the building, which is about 55% leased, he says. Though the property is not meeting financial projections set a few years ago, when the market was much stronger, “we’re kind of happy where we’re at,” considering the state of the economy, Mr. Newman says.
The so-called shadow rental market is another concern. Amid a glut of condominiums, more downtown condo owners are renting out their units rather than trying to sell them. And they’re competing with traditional landlords for tenants.
There were 1,747 downtown condos listed for rent on the Multiple Listing Service at the end of the third quarter, up 45% from the year earlier, according to Appraisal Research.
Whether the market can absorb all the extra supply will depend in part on the job market, the key driver of demand for apartments, says Anthony Rossi, president of RMK Management Corp., a Chicago-based property manager. He’s also a partner in the Parc Huron, a 221-unit apartment building under construction in River North.
“The big thing that we’ve got to hope for is that employment stabilizes and comes back,” Mr. Rossi says. “That will make everybody a little more comfortable.”
By Alby Gallun, Nov. 23, 2009
Demand for apartments remains surprisingly strong, but competition for tenants is heating up amid a swelling supply of new units. That’s one reason rents and occupancies at high-end downtown buildings slipped in the third quarter after rising in the first two, resuming a downward trend that began more than two years ago, according to a report by Appraisal Research Counselors.
“It’s really not a signal that it’s a weak market,” says Ron DeVries, vice president at the Chicago-based real estate consulting firm. “Demand is strong. We’ve just got a supply bubble right now.”
The average net effective rent at Class A downtown apartment buildings fell to $2.10 a square foot in the third quarter, down 3.2% from the second quarter and 7.1% from the year-earlier period, according to Appraisal Research.
Effective rents, which include concessions such as free rent, have fallen 10.6% from their peak of $2.35 in third-quarter 2007.
The average Class A occupancy also declined, to 91.9%, down from 93.4% in the second quarter and 92.8% in the year-ago period.
Demand for apartments typically falls in a recession as more renters try to save money by doubling up or moving in with their parents. But that hasn’t happened in downtown Chicago, where more people are renting now than were before the economy went south.
Renters occupied 17,617 downtown apartments surveyed by Appraisal Research at the end up the third quarter, up 16.7% from 15,093 two years earlier. Appraisal Research tracks about 80% of the apartments in downtown Chicago.
Normally, apartment landlords lose a certain percentage of tenants who move out to buy a condominium or single-family home. But the turnover rate has slowed dramatically, possibly because would-be buyers are hesitant to commit to a mortgage when the economy is so shaky and condo vales could fall further, Mr. DeVries says. Other renters simply may not be able to qualify for a mortgage.
“The path to home ownership is a lot tougher right now,” Mr. DeVries says.
While that’s good for landlords, the current building boom isn’t. Developers have added 3,270 units to the downtown apartment market in 2008 and 2009 and will complete another 2,236 next year, boosting the total downtown inventory by 25%, according to Appraisal Research.
“I could still see demand remaining reasonable, but I could see pressure on rents because of the supply,” says Michael Newman, president and CEO of Golub & Co., the Chicago-based developer of Streeter Place, a new 480-unit apartment tower at 355 E. Ohio St.
Golub is offering tenants two months of free rent on a 12- to 14-month lease in the building, which is about 55% leased, he says. Though the property is not meeting financial projections set a few years ago, when the market was much stronger, “we’re kind of happy where we’re at,” considering the state of the economy, Mr. Newman says.
The so-called shadow rental market is another concern. Amid a glut of condominiums, more downtown condo owners are renting out their units rather than trying to sell them. And they’re competing with traditional landlords for tenants.
There were 1,747 downtown condos listed for rent on the Multiple Listing Service at the end of the third quarter, up 45% from the year earlier, according to Appraisal Research.
Whether the market can absorb all the extra supply will depend in part on the job market, the key driver of demand for apartments, says Anthony Rossi, president of RMK Management Corp., a Chicago-based property manager. He’s also a partner in the Parc Huron, a 221-unit apartment building under construction in River North.
“The big thing that we’ve got to hope for is that employment stabilizes and comes back,” Mr. Rossi says. “That will make everybody a little more comfortable.”
By Alby Gallun, Nov. 23, 2009
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