Did you get out of bed today?
I know what you're thinking. 'Here we go again. It's the Bear Market of 2008 back to punch us in the stomach and take our lunch money one more time. There goes the stock market. There goes the real estate market. There goes the global economy.'
Certainly the events of early August have been unsettling, even maddening. The triple whammy of a slowing U.S. economy, the ongoing European debt crisis and Standard & Poor's downgrade of U.S. credit has rattled an already fragile consumer confidence.
Lou Barnes, a mortgage banker from Boulder, Colo. said it best in an August 8 interview with The Wall Street Journal's Developments blog: "Who wants to get out of bed today, let alone buy a house?"
Yet a lot of people right here in Chicagoland did get out of bed today and buy a house. Why is that? Is it because the same fundamentals that existed yesterday - record low mortgage rates and record high affordability - still exist today? Is it because local apartment rents are rising faster than Starlin Castro's batting average? Or could it be that real estate (like our now AA+ rated US debt) is still considered a relatively safe long-term investment?
That's a radical concept in 2011. But an investment that can also shelter you and your family, provide a large tax deduction, serve as a hedge against inflation, and allow you to put down roots in a top community or school district has to be given serious consideration - especially if it comes at a discount of more than 33% off its peak value... especially if it's in the business, cultural, tourism and innovation hub of the Midwest... especially if you plan to live there for a while.
As it stands today, there are only 18 nations in the world rated AAA by Standard & Poor's. Among them are Guernsey, Liechtenstein and Isle of Man. I don't know about you, but I'd rather live in AA+ Chicago, Illinois, USA.
What will the stock market do tomorrow? What will the housing market do tomorrow? If we knew that, we'd all be sipping fruity drinks on our own private island. But if the last century of American economic history is any indication, the long-term trend is up. I believe that, which is why I'm in the real estate business. And @properties believes that, which is why we're continuing to invest in and expand our business even in tumultuous times.
As in 2008, we're keeping a cool head, focusing on hyper-local market conditions and framing most conversations about housing, not around the headline of the moment, but around your individual wants and needs at your particular stage in life.
I'm here to help, so please contact me if you have any questions or are getting ready to buy or sell. And remember I always appreciate your referrals.
Tuesday, August 23, 2011
Monday, August 15, 2011
Downtown apartment rents surpass previous boom
Downtown apartment rents surpass previous boom By: Alby Gallun August 15, 2011
(Crain's) — Life was good for downtown landlords before the recession hit four years ago, as rents hit record highs. It's even better now.
Rents at downtown buildings have already eclipsed the highs of the last boom and are likely to keep rising, fueled by a broad shift in the housing market away from condominiums and toward apartments.
“The market tightened faster than we expected, and the landlords responded in kind,” says Ron DeVries, vice-president at Appraisal Research Counselors, a Chicago-based consulting firm.
The average net rent at high-end, or Class A, buildings downtown hit $2.43 a square foot in the second quarter, up 6.1% from the first quarter and 9.5% from a year earlier, according to a new Appraisal Research report.
That also tops the peak of the last boom, $2.35 a square foot, in third-quarter 2007. Net rents include the impact of concessions like free rent, which are disappearing as buildings fill up.
The apartment sector is arguably the strongest in the local real estate industry, mainly because of the condo market's continued troubles. Some downtown dwellers in their 20s or 30s who normally would rent for a few years and then buy a condo are staying put, worried that condo prices have further to fall. Others no longer qualify for a mortgage.
The average Class A occupancy rate rose to 95.6% in the second quarter, up from 93.9% in the first quarter and 94.5% a year earlier. During the last boom, the occupancy rate peaked at 97.5%, in second-quarter 2006.
With demand for downtown apartments outpacing supply, developers are building once again: Construction on five projects comprising 1,718 units is under way, and at least a dozen more are in the planning phase. The question is whether developers' exuberance today will create a glut of apartments a few years from now, pushing occupancies and rents back down.
Mr. DeVries isn't concerned yet, saying net absorption — or the change in the number of occupied downtown apartments — is totaling about 2,000 units a year currently. Developers will build about 5,500 units through the end of 2014, or about 1,375 a year on average, well below the current rate of absorption, according to Appraisal Research.
Jerry Ong, principal at Chicago-based Jupiter Realty Corp., agrees, saying people also worried that an oversupply of condo rentals would depress the apartment market — a prediction that turned out to be wrong.
“I think there is some resiliency downtown, and that's a significant factor,” Mr. Ong says.
But won't rising rents and falling condo prices eventually work against landlords, drawing people out of apartments and back into condos? Not until the fear factor disappears, says Mr. DeVries.
“We just don't see that happening until demand comes back for the condos, and that's not going to happen until stability in (condo) pricing returns and the ability to finance the units like we used to is back in the market,” he says.
Rents at lower-quality, or Class B, apartment buildings also have risen, but not as much as they have in the Class A segment. Class B rents rose to $2.07 a square foot in the second quarter, up 6.2% from a year earlier.
The price difference between the A and B buildings is now the widest it has been since Appraisal Research has been tracking the downtown market. Mr. DeVries expects the spread to narrow in the coming months as some tenants get priced out of Class A properties.
“You are going to see some spillover from the A to the B as the price gets high,” he says.
Read more: http://www.chicagorealestatedaily.com/article/20110815/CRED02/110819921/downtown-apartment-rents-surpass-previous-boom#ixzz1V8uWqGQA
Stay up-to-date on Chicago real estate with our free, daily e-newsletter
(Crain's) — Life was good for downtown landlords before the recession hit four years ago, as rents hit record highs. It's even better now.
Rents at downtown buildings have already eclipsed the highs of the last boom and are likely to keep rising, fueled by a broad shift in the housing market away from condominiums and toward apartments.
“The market tightened faster than we expected, and the landlords responded in kind,” says Ron DeVries, vice-president at Appraisal Research Counselors, a Chicago-based consulting firm.
The average net rent at high-end, or Class A, buildings downtown hit $2.43 a square foot in the second quarter, up 6.1% from the first quarter and 9.5% from a year earlier, according to a new Appraisal Research report.
That also tops the peak of the last boom, $2.35 a square foot, in third-quarter 2007. Net rents include the impact of concessions like free rent, which are disappearing as buildings fill up.
The apartment sector is arguably the strongest in the local real estate industry, mainly because of the condo market's continued troubles. Some downtown dwellers in their 20s or 30s who normally would rent for a few years and then buy a condo are staying put, worried that condo prices have further to fall. Others no longer qualify for a mortgage.
The average Class A occupancy rate rose to 95.6% in the second quarter, up from 93.9% in the first quarter and 94.5% a year earlier. During the last boom, the occupancy rate peaked at 97.5%, in second-quarter 2006.
With demand for downtown apartments outpacing supply, developers are building once again: Construction on five projects comprising 1,718 units is under way, and at least a dozen more are in the planning phase. The question is whether developers' exuberance today will create a glut of apartments a few years from now, pushing occupancies and rents back down.
Mr. DeVries isn't concerned yet, saying net absorption — or the change in the number of occupied downtown apartments — is totaling about 2,000 units a year currently. Developers will build about 5,500 units through the end of 2014, or about 1,375 a year on average, well below the current rate of absorption, according to Appraisal Research.
Jerry Ong, principal at Chicago-based Jupiter Realty Corp., agrees, saying people also worried that an oversupply of condo rentals would depress the apartment market — a prediction that turned out to be wrong.
“I think there is some resiliency downtown, and that's a significant factor,” Mr. Ong says.
But won't rising rents and falling condo prices eventually work against landlords, drawing people out of apartments and back into condos? Not until the fear factor disappears, says Mr. DeVries.
“We just don't see that happening until demand comes back for the condos, and that's not going to happen until stability in (condo) pricing returns and the ability to finance the units like we used to is back in the market,” he says.
Rents at lower-quality, or Class B, apartment buildings also have risen, but not as much as they have in the Class A segment. Class B rents rose to $2.07 a square foot in the second quarter, up 6.2% from a year earlier.
The price difference between the A and B buildings is now the widest it has been since Appraisal Research has been tracking the downtown market. Mr. DeVries expects the spread to narrow in the coming months as some tenants get priced out of Class A properties.
“You are going to see some spillover from the A to the B as the price gets high,” he says.
Read more: http://www.chicagorealestatedaily.com/article/20110815/CRED02/110819921/downtown-apartment-rents-surpass-previous-boom#ixzz1V8uWqGQA
Stay up-to-date on Chicago real estate with our free, daily e-newsletter
Tuesday, June 28, 2011
Home Prices Notch Spring Bounce
June 28 2011 The Wall Street Journal
By TESS STYNES
U.S. home prices rose in April from a month earlier, the first increase in eight months, though much of the improvement reflected the start of the spring-summer home buying season, according to the S&P Case-Shiller home-price indexes.
More
Home Prices, by Metro Area
Consumer Confidence Drops
.
Home prices were lower year-to-year as the housing struggles to recover amid high unemployment, an abundance of foreclosures and tighter mortgage requirements.
The sequential growth was called "a welcome shift from recent months" by David Blitzer, chairman of S&P's index committee. However, he said, "It is much too early to tell if this is a turning point or simply due to some warmer weather."
Though 13 cities reported higher prices, six metropolitan areas hit new lows: Charlotte, Chicago, Detroit, Las Vegas, Miami and Tampa.
Housing prices had been declining this year, hitting a new post-bubble low in the first quarter. The National Association of Realtors last week said existing home sales declined 3.8% in May from April. The figure was down 15% from a year earlier when sales got a lift ahead of the deadline for the federal home buyer tax credit.
The Case-Shiller index of 10 major metropolitan areas edged up 0.8% and the 20-city index was up 0.7% in April from March. However, adjusted for seasonal factors, the sequential the 10-city figure was flat while the 20-city index was down 0.1%.
Compared with a year earlier, unadjusted prices April prices declined 3.1% for the 10 major markets while the 20-city index weakened by 4%.
Most of the major areas saw prices rise from a month earlier, with Washington seeing the biggest increase at 3%, followed by San Francisco at 1.7%. Detroit had the biggest drop, at 2.9%
By TESS STYNES
U.S. home prices rose in April from a month earlier, the first increase in eight months, though much of the improvement reflected the start of the spring-summer home buying season, according to the S&P Case-Shiller home-price indexes.
More
Home Prices, by Metro Area
Consumer Confidence Drops
.
Home prices were lower year-to-year as the housing struggles to recover amid high unemployment, an abundance of foreclosures and tighter mortgage requirements.
The sequential growth was called "a welcome shift from recent months" by David Blitzer, chairman of S&P's index committee. However, he said, "It is much too early to tell if this is a turning point or simply due to some warmer weather."
Though 13 cities reported higher prices, six metropolitan areas hit new lows: Charlotte, Chicago, Detroit, Las Vegas, Miami and Tampa.
Housing prices had been declining this year, hitting a new post-bubble low in the first quarter. The National Association of Realtors last week said existing home sales declined 3.8% in May from April. The figure was down 15% from a year earlier when sales got a lift ahead of the deadline for the federal home buyer tax credit.
The Case-Shiller index of 10 major metropolitan areas edged up 0.8% and the 20-city index was up 0.7% in April from March. However, adjusted for seasonal factors, the sequential the 10-city figure was flat while the 20-city index was down 0.1%.
Compared with a year earlier, unadjusted prices April prices declined 3.1% for the 10 major markets while the 20-city index weakened by 4%.
Most of the major areas saw prices rise from a month earlier, with Washington seeing the biggest increase at 3%, followed by San Francisco at 1.7%. Detroit had the biggest drop, at 2.9%
Thursday, June 16, 2011
Getting The Right Answers On Buying Or Selling Starts With The Right Questions
Getting The Right Answers On
Buying Or Selling Starts With
The Right Questions
Like so many of life's big decisions, the right answers about buying or selling a home derive from asking the right questions. So when people ask me if now is the right time to buy or sell, I usually recommend setting aside the immediate or short-term considerations involved in this debate and first framing the question in the context of long-term goals. After all, homeownership, as we've all been reminded, is a long-term proposition.
And long-term, it still appears to pay off for most Chicagoans. Earlier this month Crain's Chicago Business reported that, "despite double-digit drops in the bust of recent years," a number of Chicago-area neighborhoods and communities still experienced healthy price increases over the 10-year period from 2000 to 2010. Citing data from Fiserv Inc., the article reported increases in newly gentrified areas like Uptown/Andersonville (+39.3%) as well as more established neighborhoods like the Gold Coast (+33.2%). These figures might come as a surprise given the housing crisis, but they average out to between 3% and 4% per year, which is about the historical norm for annual home-price appreciation going back decades.
Another long-term factor buyers and sellers must consider is borrowing costs. No one knows exactly where interest rates will be in a few years, but a decade ago the cost of money was almost double what it is today.
Not to be overlooked are the lifestyle considerations that factor into buying, selling or standing pat. These include things like growing families, schools and retirement. Sometimes, short-term financial factors (like today's prices) outweigh these issues, but other times they don't. For example, a buyer who wants to move into a specific school district because their child is starting kindergarten may be less concerned that prices could decline for another year or two before starting to recover. Likewise, a seller nearing retirement may decide they would rather sell now and retire with less equity, than wait an indeterminate amount of time until their home equity approaches pre-crash levels.
For these individuals, now is the right time to buy or sell. I'm here to help you ask and answer the questions that will determine if the time is right for you. Please feel free to call on me anytime. And remember, I always appreciate your referrals.
Dave Straub
@properties
773.255.3180
Buying Or Selling Starts With
The Right Questions
Like so many of life's big decisions, the right answers about buying or selling a home derive from asking the right questions. So when people ask me if now is the right time to buy or sell, I usually recommend setting aside the immediate or short-term considerations involved in this debate and first framing the question in the context of long-term goals. After all, homeownership, as we've all been reminded, is a long-term proposition.
And long-term, it still appears to pay off for most Chicagoans. Earlier this month Crain's Chicago Business reported that, "despite double-digit drops in the bust of recent years," a number of Chicago-area neighborhoods and communities still experienced healthy price increases over the 10-year period from 2000 to 2010. Citing data from Fiserv Inc., the article reported increases in newly gentrified areas like Uptown/Andersonville (+39.3%) as well as more established neighborhoods like the Gold Coast (+33.2%). These figures might come as a surprise given the housing crisis, but they average out to between 3% and 4% per year, which is about the historical norm for annual home-price appreciation going back decades.
Another long-term factor buyers and sellers must consider is borrowing costs. No one knows exactly where interest rates will be in a few years, but a decade ago the cost of money was almost double what it is today.
Not to be overlooked are the lifestyle considerations that factor into buying, selling or standing pat. These include things like growing families, schools and retirement. Sometimes, short-term financial factors (like today's prices) outweigh these issues, but other times they don't. For example, a buyer who wants to move into a specific school district because their child is starting kindergarten may be less concerned that prices could decline for another year or two before starting to recover. Likewise, a seller nearing retirement may decide they would rather sell now and retire with less equity, than wait an indeterminate amount of time until their home equity approaches pre-crash levels.
For these individuals, now is the right time to buy or sell. I'm here to help you ask and answer the questions that will determine if the time is right for you. Please feel free to call on me anytime. And remember, I always appreciate your referrals.
Dave Straub
@properties
773.255.3180
Friday, May 20, 2011
Mortgage Credit's Demise Greatly Exaggerated
Mortgage Credit's Demise
Greatly Exaggerated
One can hardly read a news report about the housing market today without finding some mention of a lack of mortgage financing. True, lending standards have tightened since the days when just about anyone could get a mortgage. However, with a couple of exceptions, the average borrower with decent credit and some down-payment savings should be able to obtain a mortgage with relative ease.
In a May 10 article in U.S. News and World Report, Keith Gumbinger, VP of mortgage information web site HSH.com, said, "Borrowers have a little bit of a misconception that you can't get mortgage financing. The mentality of 'It's going to be too hard for me to get financing, so I'm not going to bother even looking,' is persistent."
In fact, it appears the pendulum has swung back to the middle after reacting harshly to the loose lending standards that led to the nation's housing crisis.
According to Chicago-based Guaranteed Rate, one of the nation's largest independent mortgage lenders, the overriding sentiment in the mortgage market today is "clean loans and clean lending", but there are definitely options for all sorts of borrowers and home-buying needs.
Following is an overview of some popular loan products and mortgage scenarios. Contact me to discuss your specific needs and to find a mortgage broker to help you meet them.
Conforming 30-Year Fixed-Rate Mortgages: Many options exist and loans are fairly easy to obtain for borrowers with good credit. Even those with imperfect credit (the minimum threshold for most lenders today is a FICO score in the mid 600s) can get a loan but will pay a higher interest rate.
Jumbo Mortgages: Lending standards on jumbo mortgages (in Illinois, these are loans above $417,000) have opened up considerably during the past six months, and rates have come down as well. Rates on some jumbo ARM products are below 4%. Most loans require a 20% down payment, but there are alternatives for borrowers putting down less. Loans over $1 million may require two appraisals.
Low Down Payment Mortgages: In addition to FHA mortgages, which allow for as little as 3.5% down, private investors have come into the market offering alternative low-down-payment programs. Qualified borrowers can purchase with only 3% down while avoiding some of the upfront fees that accompany FHA loans. Private mortgage insurance (PMI) still applies.
One group that's still encountering some challenges is self-employed borrowers. Because these borrowers can write off large amounts of income and/or business losses, their tax returns and debt-to-income (DTI) ratios don't always reflect their true borrowing power. For these individuals, a private bank or wealth manager may be able to provide a mortgage solution.
The important thing for all borrowers to remember is that the mortgage market is incredibly fluid. Rates are changing and products are coming and going.
Meanwhile, current interest rates are fantastic. So if you're considering buying or refinancing, this could be your best opportunity for years to come.
As always, I'm here to help, so don't hesitate to call. And please keep me in mind for referrals. I appreciate your business.
Source: Guaranteed Rate
Dave Straub @properties 773.255.3180
Greatly Exaggerated
One can hardly read a news report about the housing market today without finding some mention of a lack of mortgage financing. True, lending standards have tightened since the days when just about anyone could get a mortgage. However, with a couple of exceptions, the average borrower with decent credit and some down-payment savings should be able to obtain a mortgage with relative ease.
In a May 10 article in U.S. News and World Report, Keith Gumbinger, VP of mortgage information web site HSH.com, said, "Borrowers have a little bit of a misconception that you can't get mortgage financing. The mentality of 'It's going to be too hard for me to get financing, so I'm not going to bother even looking,' is persistent."
In fact, it appears the pendulum has swung back to the middle after reacting harshly to the loose lending standards that led to the nation's housing crisis.
According to Chicago-based Guaranteed Rate, one of the nation's largest independent mortgage lenders, the overriding sentiment in the mortgage market today is "clean loans and clean lending", but there are definitely options for all sorts of borrowers and home-buying needs.
Following is an overview of some popular loan products and mortgage scenarios. Contact me to discuss your specific needs and to find a mortgage broker to help you meet them.
Conforming 30-Year Fixed-Rate Mortgages: Many options exist and loans are fairly easy to obtain for borrowers with good credit. Even those with imperfect credit (the minimum threshold for most lenders today is a FICO score in the mid 600s) can get a loan but will pay a higher interest rate.
Jumbo Mortgages: Lending standards on jumbo mortgages (in Illinois, these are loans above $417,000) have opened up considerably during the past six months, and rates have come down as well. Rates on some jumbo ARM products are below 4%. Most loans require a 20% down payment, but there are alternatives for borrowers putting down less. Loans over $1 million may require two appraisals.
Low Down Payment Mortgages: In addition to FHA mortgages, which allow for as little as 3.5% down, private investors have come into the market offering alternative low-down-payment programs. Qualified borrowers can purchase with only 3% down while avoiding some of the upfront fees that accompany FHA loans. Private mortgage insurance (PMI) still applies.
One group that's still encountering some challenges is self-employed borrowers. Because these borrowers can write off large amounts of income and/or business losses, their tax returns and debt-to-income (DTI) ratios don't always reflect their true borrowing power. For these individuals, a private bank or wealth manager may be able to provide a mortgage solution.
The important thing for all borrowers to remember is that the mortgage market is incredibly fluid. Rates are changing and products are coming and going.
Meanwhile, current interest rates are fantastic. So if you're considering buying or refinancing, this could be your best opportunity for years to come.
As always, I'm here to help, so don't hesitate to call. And please keep me in mind for referrals. I appreciate your business.
Source: Guaranteed Rate
Dave Straub @properties 773.255.3180
Sunday, April 17, 2011
@properties - More agents than any other firm who completed at least one million-dollar transaction
For 2010 in the city of Chicago, @properties had more agents than any other firm who completed at least one million-dollar transaction. I am very proud to be one of those agents. Here are the stats, this is for the city only:
@properties = 80
Prudential= 74
B&W = 56
CB = 55
K&S = 55
Jameson = 23
Dreamtown = 17
What this means is that @properties has the largest internal network of luxury sales agents, so we will get your home in front of more agents working with more million-dollar buyers than any other brokerage firm. The reason we do so well in the luxury market is because we have the best high-end marketing, exposure and agents.
@properties = 80
Prudential= 74
B&W = 56
CB = 55
K&S = 55
Jameson = 23
Dreamtown = 17
What this means is that @properties has the largest internal network of luxury sales agents, so we will get your home in front of more agents working with more million-dollar buyers than any other brokerage firm. The reason we do so well in the luxury market is because we have the best high-end marketing, exposure and agents.
Friday, April 15, 2011
Taking Inventory: Supply Picture Slowly Improving
Taking Inventory:
Supply Picture Slowly Improving
One closely watched gauge of the local real estate market is Months Supply of Inventory (MSI).
MSI forecasts how long it would take to sell off the remaining supply of active listings given the current pace of sales. As a general rule of thumb, a balanced market, where supply and demand is in equilibrium, has about 6 months worth of inventory. But throughout the real estate downturn, MSI has been well above that benchmark.
Lately, however, MSI has become much more palatable. In fact, in the city of Chicago MSI is at a two-year low as of the end of March. While some areas do indeed have an oversupply of homes for sale, other neighborhoods show a virtual balance between supply and demand.
For example, North Center, Lincoln Square, Forest Glen, Rogers Park and the Near West Side, which includes the West Loop, all had around 6 months worth of inventory in March. Lincoln Park, Lakeview, Edgewater and West Town, which includes Wicker Park, all had less than 8 months worth of supply. The citywide average in March was 7.1 months - 50% below March 2009 levels.
Anecdotally, we are seeing more multiple offer situations. New listings that are priced correctly and in good condition are being snapped up quickly. That has not been the case over the last two years. The perception of an endless supply of flawless, inexpensive homes is far from today's reality.
MSI fluctuates seasonally and, historically, is at its lowest during the spring. In addition, factors such as shadow inventory (homes that are in foreclosure but have not yet been sold) are keeping optimism in check. However, it should be noted that this spring's inventory levels have been achieved without the benefit of last year's housing tax credit. Furthermore, in the city condo market, large chunks of new-construction supply have been taken off the market by investors acquiring units in bulk to rent out as apartments. In the past 12 months, almost 1,000 new condos have been acquired in such a manner - more than the total number of individual new-construction sales for all of 2010.
The upshot is that slowly but surely things are getting better. Buyers are still in a strong position but can't snooze on a great listing. Sellers still may be dealing with some disappointment on the pricing front, but if your home is priced and presented right, the buyers are out there.
Of course, every neighborhood, price point and housing type is subject to a unique set of circumstances. For an in-depth analysis of inventory relative to your property sale or search, contact me anytime. And remember I always appreciate your referrals.
Sources: Broker Metrics for MSI statistics. Appraisal Research Counselors for new-construction condominium sales.
Supply Picture Slowly Improving
One closely watched gauge of the local real estate market is Months Supply of Inventory (MSI).
MSI forecasts how long it would take to sell off the remaining supply of active listings given the current pace of sales. As a general rule of thumb, a balanced market, where supply and demand is in equilibrium, has about 6 months worth of inventory. But throughout the real estate downturn, MSI has been well above that benchmark.
Lately, however, MSI has become much more palatable. In fact, in the city of Chicago MSI is at a two-year low as of the end of March. While some areas do indeed have an oversupply of homes for sale, other neighborhoods show a virtual balance between supply and demand.
For example, North Center, Lincoln Square, Forest Glen, Rogers Park and the Near West Side, which includes the West Loop, all had around 6 months worth of inventory in March. Lincoln Park, Lakeview, Edgewater and West Town, which includes Wicker Park, all had less than 8 months worth of supply. The citywide average in March was 7.1 months - 50% below March 2009 levels.
Anecdotally, we are seeing more multiple offer situations. New listings that are priced correctly and in good condition are being snapped up quickly. That has not been the case over the last two years. The perception of an endless supply of flawless, inexpensive homes is far from today's reality.
MSI fluctuates seasonally and, historically, is at its lowest during the spring. In addition, factors such as shadow inventory (homes that are in foreclosure but have not yet been sold) are keeping optimism in check. However, it should be noted that this spring's inventory levels have been achieved without the benefit of last year's housing tax credit. Furthermore, in the city condo market, large chunks of new-construction supply have been taken off the market by investors acquiring units in bulk to rent out as apartments. In the past 12 months, almost 1,000 new condos have been acquired in such a manner - more than the total number of individual new-construction sales for all of 2010.
The upshot is that slowly but surely things are getting better. Buyers are still in a strong position but can't snooze on a great listing. Sellers still may be dealing with some disappointment on the pricing front, but if your home is priced and presented right, the buyers are out there.
Of course, every neighborhood, price point and housing type is subject to a unique set of circumstances. For an in-depth analysis of inventory relative to your property sale or search, contact me anytime. And remember I always appreciate your referrals.
Sources: Broker Metrics for MSI statistics. Appraisal Research Counselors for new-construction condominium sales.
Friday, March 18, 2011
The Only Real Estate Website You'll Ever Need
The Only Real Estate Website
You'll Ever Need
Have you been on atproperties.com lately? If it's been a while, you might be amazed at all of the useful features you'll find on our website.
First and foremost, atproperties.com is the #1 place to search for a new home in Chicagoland. Our powerful search engine displays EVERY property in the local MLS with detailed descriptions and tons of photos. You can search by neighborhood, city or zip, and if you're looking within a very specific area you can even draw your own search using our innovative map tool. Save time by saving your searches and favorite properties, and set alerts to instantly find out about new listings and price changes.
In our Neighborhoods section you'll find information and market trends, including sales data, on more than 300 Chicago-area communities. And atproperties.com is also the best place to search for new construction in and around Chicago. Many quality developments are offering attractive discounts and special incentives making now a great time to buy new.
If you're getting ready to sell, learn how @properties achieves better results for sellers with the most comprehensive marketing programs in the industry. Click on the Seller's Presentation and see everything we do to help you obtain the highest possible selling price in the shortest amount of time.
Atproperties.com is great for homebuyers and sellers, but it's also a useful resource for anyone looking for community-level information in Chicagoland. Need to find the closest movie theater, day care center or grocery store? Use the View Amenities feature on our maps to locate them in any neighborhood. You can also find restaurant reviews powered by Yelp and school ratings powered by Education.com.
We designed atproperties.com to be powerful, functional and intuitive. And we're constantly working to make it even better. That's why we're one of only a handful of brokerage firms in the country to earn the prestigious Leading Real Estate Companies of the World® Website Quality Certification two years in a row.
Please let me know if you would like help getting started on atproperties.com. I'm more than happy to give you a tour of this great resource. And remember, I always appreciate your referrals.
Dave Straub
773.255.3180
You'll Ever Need
Have you been on atproperties.com lately? If it's been a while, you might be amazed at all of the useful features you'll find on our website.
First and foremost, atproperties.com is the #1 place to search for a new home in Chicagoland. Our powerful search engine displays EVERY property in the local MLS with detailed descriptions and tons of photos. You can search by neighborhood, city or zip, and if you're looking within a very specific area you can even draw your own search using our innovative map tool. Save time by saving your searches and favorite properties, and set alerts to instantly find out about new listings and price changes.
In our Neighborhoods section you'll find information and market trends, including sales data, on more than 300 Chicago-area communities. And atproperties.com is also the best place to search for new construction in and around Chicago. Many quality developments are offering attractive discounts and special incentives making now a great time to buy new.
If you're getting ready to sell, learn how @properties achieves better results for sellers with the most comprehensive marketing programs in the industry. Click on the Seller's Presentation and see everything we do to help you obtain the highest possible selling price in the shortest amount of time.
Atproperties.com is great for homebuyers and sellers, but it's also a useful resource for anyone looking for community-level information in Chicagoland. Need to find the closest movie theater, day care center or grocery store? Use the View Amenities feature on our maps to locate them in any neighborhood. You can also find restaurant reviews powered by Yelp and school ratings powered by Education.com.
We designed atproperties.com to be powerful, functional and intuitive. And we're constantly working to make it even better. That's why we're one of only a handful of brokerage firms in the country to earn the prestigious Leading Real Estate Companies of the World® Website Quality Certification two years in a row.
Please let me know if you would like help getting started on atproperties.com. I'm more than happy to give you a tour of this great resource. And remember, I always appreciate your referrals.
Dave Straub
773.255.3180
Saturday, February 26, 2011
Downtown Luxury Market: On the Rebound in 2011?
Downtown Luxury Market:
On the Rebound in 2011?
It's well known that Chicago lags the coasts when it comes to real estate trends, so an article in last month's New York Times about the strong performance of Manhattan's luxury market in 2010 is reason to be hopeful about our prospects in the Windy City. But local market data is still a mixed bag.
Months Supply of Inventory fell 30%, year over year, from January 2010 to January 2011 (a positive sign); however, we have yet to see the broad price recovery everyone is hoping for. The median sales price for $1,000,000+ homes in the city is down 4.8% year over year. This underscores the importance of a luxury marketing program that will help your home stand out in a crowd.
At @properties, we leverage print and online advertising, direct mail, e-mail marketing, high-visibility signage, broker marketing and more to sell your home. We also feature luxury listings front and center on the @properties website in our Luxury Collection Online Magazine. This digital publication features dozens of pages of spectacular homes - each with professional photography and a link to detailed listing information on the @properties web site. See the latest edition now at www.atproperties.com.
Did You Know?
@properties finished 2010 with the highest overall market share in the city of Chicago (our second consecutive year in the top spot), but did you know that @properties was also #1 in luxury sales?
#1 in Market Share: 13.04%
#1 in Luxury Sales: 13.98%
#1 in Selling Price to Original Listing Price: 94.3%
#1 in Fastest Average Market Time: 142 Days
For more information on our luxury brokerage services for buyers and sellers, please contact me. Also, please keep me in mind if someone you know is buying or selling a home. I appreciate your business and referrals.
Source: MSI, market share and market performance statistics supplied by BrokerMetrics based on sales data from Midwest Real Estate Data LLC, 1/1/10 - 12/31/10 and 1/1/10 vs. 1/1/11.
On the Rebound in 2011?
It's well known that Chicago lags the coasts when it comes to real estate trends, so an article in last month's New York Times about the strong performance of Manhattan's luxury market in 2010 is reason to be hopeful about our prospects in the Windy City. But local market data is still a mixed bag.
Months Supply of Inventory fell 30%, year over year, from January 2010 to January 2011 (a positive sign); however, we have yet to see the broad price recovery everyone is hoping for. The median sales price for $1,000,000+ homes in the city is down 4.8% year over year. This underscores the importance of a luxury marketing program that will help your home stand out in a crowd.
At @properties, we leverage print and online advertising, direct mail, e-mail marketing, high-visibility signage, broker marketing and more to sell your home. We also feature luxury listings front and center on the @properties website in our Luxury Collection Online Magazine. This digital publication features dozens of pages of spectacular homes - each with professional photography and a link to detailed listing information on the @properties web site. See the latest edition now at www.atproperties.com.
Did You Know?
@properties finished 2010 with the highest overall market share in the city of Chicago (our second consecutive year in the top spot), but did you know that @properties was also #1 in luxury sales?
#1 in Market Share: 13.04%
#1 in Luxury Sales: 13.98%
#1 in Selling Price to Original Listing Price: 94.3%
#1 in Fastest Average Market Time: 142 Days
For more information on our luxury brokerage services for buyers and sellers, please contact me. Also, please keep me in mind if someone you know is buying or selling a home. I appreciate your business and referrals.
Source: MSI, market share and market performance statistics supplied by BrokerMetrics based on sales data from Midwest Real Estate Data LLC, 1/1/10 - 12/31/10 and 1/1/10 vs. 1/1/11.
Monday, February 21, 2011
Home Sales in Metro Chicago Real Estate Market Showed Resilience During January
Home sales in the seven-county metropolitan Chicago real estate market showed encouraging resilience in January even though total home sales slipped 3.7 percent below the level recorded in the same month of 2010, according to an analysis by RE/MAX.
Looking at data on home sales recorded by Midwest Real Estate Data, LLC, the regional multiple listing service, RE/MAX reports that January home sales totaled 3,834 units, down from 3,980 units in January 2010.
“January sales numbers are usually the lowest of any month of the year, but they can be a harbinger of what is to come as the housing market moves into the busy spring season,” explains Jim Merrion, regional director of the RE/MAX Northern Illinois real estate network. “A year ago, the spring market was quite active, helped greatly by the federal tax credit offered to homebuyers. This year there is no tax credit, yet January sales were at a very comparable level to last year’s. That suggests buyers are returning to the market and that home buying activity this spring has more upside potential than many expert observers currently believe.”
There were 1,847 distressed sales across the metro area in January, compared to 1,855 a year earlier and 2,206 in the prior month. Foreclosures represented 33 percent of all sales, while short sales accounted for 15 percent.
Sales of attached and detached homes performed quite similarly in January, both coming in 3.7 percent lower than the prior January. However, in terms of prices and the time required to sell a home, the differences between the attached and detached markets were more pronounced.
For detached homes, the median price (where half of all homes sold cost more and half cost less) rose to $175,000 in January, up from $172,500 a year earlier, and the average time those homes spent on the market fell from 174 days in 2010 to 171 days this year. For attached homes, the picture was quite different. The median price fell to $133,400 from $180,000 a year ago, a 26 percent decline. The average time required to sell one of those attached homes increased to 188 days from 166 days.
“We don’t want to read too much into the fact that January home sales were 26 percent lower than in December,” Merrion says. “A substantial December-to-January decrease has been the pattern in recent years. Even when the market was just about at its peak, January sales in 2006 were 31 percent lower than December sales in 2005, and the smallest December-to-January sales decline since then was 20 percent in 2006-2007.”
Although January sales activity in the metro area as a whole was quite similar to that seen a year earlier, sales levels varied significantly in local markets. Three of the seven metro counties, DuPage, Kane and Lake, saw sales increase, while four counties, as well as the City of Chicago, recorded decreased sales.
DuPage County sales were up 21.8 percent to 453 units, the largest gain reported, while Kendall County sales fell 23.5 percent to 62 units, and sales dipped 15.4 percent in Chicago, with 1,066 homes changing hands. Results for the other counties were as follows: Cook 2,300 units (-8.1 percent), Kane 256 units (+6.7 percent), Lake 340 units (+4.3 percent), McHenry 140 units (-9.7 percent) and Will 283 units (-6.3 percent).
-Chicago Agent 18 February 2011
Looking at data on home sales recorded by Midwest Real Estate Data, LLC, the regional multiple listing service, RE/MAX reports that January home sales totaled 3,834 units, down from 3,980 units in January 2010.
“January sales numbers are usually the lowest of any month of the year, but they can be a harbinger of what is to come as the housing market moves into the busy spring season,” explains Jim Merrion, regional director of the RE/MAX Northern Illinois real estate network. “A year ago, the spring market was quite active, helped greatly by the federal tax credit offered to homebuyers. This year there is no tax credit, yet January sales were at a very comparable level to last year’s. That suggests buyers are returning to the market and that home buying activity this spring has more upside potential than many expert observers currently believe.”
There were 1,847 distressed sales across the metro area in January, compared to 1,855 a year earlier and 2,206 in the prior month. Foreclosures represented 33 percent of all sales, while short sales accounted for 15 percent.
Sales of attached and detached homes performed quite similarly in January, both coming in 3.7 percent lower than the prior January. However, in terms of prices and the time required to sell a home, the differences between the attached and detached markets were more pronounced.
For detached homes, the median price (where half of all homes sold cost more and half cost less) rose to $175,000 in January, up from $172,500 a year earlier, and the average time those homes spent on the market fell from 174 days in 2010 to 171 days this year. For attached homes, the picture was quite different. The median price fell to $133,400 from $180,000 a year ago, a 26 percent decline. The average time required to sell one of those attached homes increased to 188 days from 166 days.
“We don’t want to read too much into the fact that January home sales were 26 percent lower than in December,” Merrion says. “A substantial December-to-January decrease has been the pattern in recent years. Even when the market was just about at its peak, January sales in 2006 were 31 percent lower than December sales in 2005, and the smallest December-to-January sales decline since then was 20 percent in 2006-2007.”
Although January sales activity in the metro area as a whole was quite similar to that seen a year earlier, sales levels varied significantly in local markets. Three of the seven metro counties, DuPage, Kane and Lake, saw sales increase, while four counties, as well as the City of Chicago, recorded decreased sales.
DuPage County sales were up 21.8 percent to 453 units, the largest gain reported, while Kendall County sales fell 23.5 percent to 62 units, and sales dipped 15.4 percent in Chicago, with 1,066 homes changing hands. Results for the other counties were as follows: Cook 2,300 units (-8.1 percent), Kane 256 units (+6.7 percent), Lake 340 units (+4.3 percent), McHenry 140 units (-9.7 percent) and Will 283 units (-6.3 percent).
-Chicago Agent 18 February 2011
Saturday, February 5, 2011
@properties' Market Reports
Stay Informed In 2011
With @properties' Market Reports
With record low interest rates and record high affordability, 2010 was a banner year for just about anyone who bought a home. The favorable buying conditions were reflected in overall sales numbers for 2010, which showed slight improvement versus 2009. Total sales volume was up and market times were down for @properties' principal market areas of the city and North Shore (see charts below).
Heading into 2011, buyers are still in the driver's seat but will want to keep an eye on interest rates, which are expected to top 5% before long. Locking in a rate below 5% on a 15- or 30-year fixed-rate mortgage, or below 4% on an ARM, is a phenomenal opportunity given current home prices. For sellers, getting the job done in 2011 will once again require an in-depth understanding of hyper-local market conditions and price trends, as well as a comprehensive sales and marketing plan.
A great way to keep tabs on the market in 2011 is with @properties' Market Reports. The reports instantly generate real time market stats for almost every neighborhood and village in the Chicagoland area. You can drill down to view market stats for specific housing types and sizes, and observe trends over 3, 6 or 12 months. While on the site, search Chicagoland's most complete property database, and sign up to receive New Listing alerts and Status Updates for properties you want to track.
If you're considering a real estate transaction, now is the perfect time for us to sit down and discuss potential buying or selling strategies. Contact me at your earliest convenience, and please keep me in mind if you know of someone who is looking to buy or sell property this year.
City of Chicago Market Comparison: 2010 vs. 2009 Totals
City of Chicago Total $ Volume Days on Market Average Sales Price
2010 $5,619,459,483.00 150 $284,948.00
2009 $5,587,165,396.00 156 $279,904.00
2010 vs. 2009 $32,294,087.00 -6 $5,044.00
% Comparison 0.6% -3.8% 1.8%
North Shore Market Comparison: 2010 vs. 2009 Totals
North Shore Total $ Volume Days on Market Average Sales Price
2010 $1,502,902,690.00 196 $656,576.00
2009 $1,183,205,540.00 207 $655,516.00
2010 vs. 2009 $319,697,150.00 -11 $1,060.00
% Comparison 27.0% -5.3% 0.2%
Source: Broker Metrics. Data supplied through MRED LLC, based on closed transactions for detached and attached single-family homes and parking. North Shore includes Evanston, Wilmette, Kenilworth, Winnetka, Glencoe, Highland Park, Lake Forest and Lake Bluff. 1/1/10 - 12/31/10 vs. 1/1/09 - 12/31/09.
With @properties' Market Reports
With record low interest rates and record high affordability, 2010 was a banner year for just about anyone who bought a home. The favorable buying conditions were reflected in overall sales numbers for 2010, which showed slight improvement versus 2009. Total sales volume was up and market times were down for @properties' principal market areas of the city and North Shore (see charts below).
Heading into 2011, buyers are still in the driver's seat but will want to keep an eye on interest rates, which are expected to top 5% before long. Locking in a rate below 5% on a 15- or 30-year fixed-rate mortgage, or below 4% on an ARM, is a phenomenal opportunity given current home prices. For sellers, getting the job done in 2011 will once again require an in-depth understanding of hyper-local market conditions and price trends, as well as a comprehensive sales and marketing plan.
A great way to keep tabs on the market in 2011 is with @properties' Market Reports. The reports instantly generate real time market stats for almost every neighborhood and village in the Chicagoland area. You can drill down to view market stats for specific housing types and sizes, and observe trends over 3, 6 or 12 months. While on the site, search Chicagoland's most complete property database, and sign up to receive New Listing alerts and Status Updates for properties you want to track.
If you're considering a real estate transaction, now is the perfect time for us to sit down and discuss potential buying or selling strategies. Contact me at your earliest convenience, and please keep me in mind if you know of someone who is looking to buy or sell property this year.
City of Chicago Market Comparison: 2010 vs. 2009 Totals
City of Chicago Total $ Volume Days on Market Average Sales Price
2010 $5,619,459,483.00 150 $284,948.00
2009 $5,587,165,396.00 156 $279,904.00
2010 vs. 2009 $32,294,087.00 -6 $5,044.00
% Comparison 0.6% -3.8% 1.8%
North Shore Market Comparison: 2010 vs. 2009 Totals
North Shore Total $ Volume Days on Market Average Sales Price
2010 $1,502,902,690.00 196 $656,576.00
2009 $1,183,205,540.00 207 $655,516.00
2010 vs. 2009 $319,697,150.00 -11 $1,060.00
% Comparison 27.0% -5.3% 0.2%
Source: Broker Metrics. Data supplied through MRED LLC, based on closed transactions for detached and attached single-family homes and parking. North Shore includes Evanston, Wilmette, Kenilworth, Winnetka, Glencoe, Highland Park, Lake Forest and Lake Bluff. 1/1/10 - 12/31/10 vs. 1/1/09 - 12/31/09.
Saturday, January 8, 2011
owning vs. renting
Homeowners still confident in owning vs. renting, says Fannie Mae
Amid a torrent of negative stories on housing, it is worth pointing out that housing has a function other than as an investment: namely, as a contributor to quality of life.
Fannie Mae, admittedly not an unbiased source, recently released a four-part survey on the attitudes of owning versus renting. Among the findings:
84% of homeowners with negative equity believe they are better off owning than renting.
80% of the general population, and 65% of renters, say they would prefer to live in a neighborhood where most people own.
In responding to the question, “What is the best reason to buy a home?”, the most popular answer was for lifestyle considerations, not financial benefits.
A large majority of owners believe they are better off owning a home, whereas renters are divided between owning and renting.
This is a useful reminder that not all buyers will be into the horse race of housing data that can sometimes preoccupy the news media.
Fannie Mae Survey Graphs: http://www.lakeshoreanalytics.com/yo/jan11/fan_fred_graphic.PNG
from yo Chicago by jeff baird on 1/5/11
Amid a torrent of negative stories on housing, it is worth pointing out that housing has a function other than as an investment: namely, as a contributor to quality of life.
Fannie Mae, admittedly not an unbiased source, recently released a four-part survey on the attitudes of owning versus renting. Among the findings:
84% of homeowners with negative equity believe they are better off owning than renting.
80% of the general population, and 65% of renters, say they would prefer to live in a neighborhood where most people own.
In responding to the question, “What is the best reason to buy a home?”, the most popular answer was for lifestyle considerations, not financial benefits.
A large majority of owners believe they are better off owning a home, whereas renters are divided between owning and renting.
This is a useful reminder that not all buyers will be into the horse race of housing data that can sometimes preoccupy the news media.
Fannie Mae Survey Graphs: http://www.lakeshoreanalytics.com/yo/jan11/fan_fred_graphic.PNG
from yo Chicago by jeff baird on 1/5/11
Saturday, December 11, 2010
Waiting for the Bottom?
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
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
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
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