Chicago Housing Market

Many U.S. home sellers saw dollars vanish in front of their eyes during the past year. Although the vanishing act was really an illusion as the money never existed – except in an over-zealous home seller's mind. Pricing homes outside the realm of reality holds no magic; it just ends with disappointed sellers. All the dollars disappear because home buyers move on to another dream (and price) within their reach.

During the past year, no home sellers (upscale residence or small house) were exempt from price reductions. According to the Washington Post, Former Treasury Secretary Henry Paulson had to reduce the asking price for his Washington, DC home. In 2010, the property sold for almost one-third less than the original asking price. The buyer paid $3.25 billion. During 2006, Paulsen had paid $4.3 million for the property.

Chicago Home Sellers

Between March-December 2010, Chicago home sellers saw a widening divide between their preferred price and the actual amount of the home sale. The Chicago Agent magazine examined monthly data for Cook, DuPage, Kane, Lake, McHenry, and Will counties. The price reductions endured by sellers were calculated at $459 million a month.

Despite the size of the area, Cook County sellers led other counties in their average number of reductions (17,335) per month. As well, this county had the biggest cuts (percentage-wise) – almost 6% ($16,000) every time they lowered asking prices. Du Page County ranked second with 3,583 reductions (4.4%).

Chicago Home Buyers

Of course, Chicago home buyers were pleased with the reduced prices. Yet a few home buyers still paid a fine sum for their dream homes.

Chicago's Most Expensive Houses

            • $7.75 million - Barrington Hills (McHenry County)

            • $5.99 million - Lake Forest (Lake County)

            • $4.1 million - Hinsdale (DuPage County)

            • $2.99 million - St. Charles (Kane County)

Chicago's Most Expensive Condos

11 E. Walton Street

Three Condos

            •$7.4 million

            •$6.88 million

            •$6.28 million

Real estate mantra in 2010: How low can you go?

UK Home Sales

The current state of home sale prices varies from market to market. The average price of a home in England and Wales fell 0.2% to 222,827 pounds ($354,000) from November-December, 2010. Many UK home sellers do not want to be involved in transactions in this market. Many UK home buyers cannot get a mortgage. An Acadametrics report showed the number of transactions dropped by 53,000 (approx) in December 2010 – a 33% decline from the same period in 2009.

U.K. House Prices Decline for Third Month as Lenders Restrict Mortgages

What Do Consumers Predict For Home Prices In 2011?

The Chicago Agent magazine asked its readers for their predictions. At least 54% said that housing prices would remain the same as in the past year. Thirty one per cent of responses expected a decline of home sale prices in the coming months.

No doubt, within Chicago and elsewhere, home buyers are hoping for continued price reductions. Of course, home sellers always wish for higher prices. At least 15% of respondents to the magazine survey expected home sellers in 2011 would be getting better prices.

What Are Your Predictions For Home Prices In 2011?

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The beginning of the New Year revolves around the 'annual' resolutions – at least according to the media. Whether people choose to follow a set plan or just play it by air, you can bet that they will be bombarded by all kinds of advice - on television, in print, and at online sites. The professional (or other) advice will cover every topic from routine to resorts to real estate.

You have to separate the great advice from the inaccurate, silly, or even foolhardy suggestions. Real estate is one area where it pays to resolve to learn more during the coming year. Even if you are not buying or selling now, chances are that you will at some point. As well, renters need to know the score. It pays to get a feel for the topic and arm yourself with knowledge.

As you delve through the mounds of real estate advice, you can find 'real' golden nuggets of information from reputable sources. Often the best pieces of advice are simple suggestions that make the most sense. Yet often, consumers overlook the simple solution because they perceive real estate as a complicated matter. Truthfully, real estate is a complex issue, but knowing the basics makes it less of a challenge.

Rounding Up the Best Real Estate Advice

"Get your home into selling shape." ~ Ilyce Glink, Real Estate Matters, Chicago Tribune

Ilyce Glink, author of Real Estate Matters, emphasizes preparing to sell your home. Part of her wise advice – get rid of items - unless you need or use them. Interior and exterior cleaning, repairs, and touch-ups are also suggestions as well as the possibility of hiring a stager.

Read More...

"Make a sensible valuation." ~ Tanya Ashreena, Financial Times

This sensible statement was written for London readers but it is relevant on a global level. Sellers have to be certain that their asking prices reflect the present market – not yesterday's value or tomorrow's prediction. The Financial Times focuses on the reality of what will happen if you ignore this piece of advice. Failure to do so will lower your chances of selling a home.

"Always get a home inspection." ~ US News

Now this bit of advice might seem boring if you've just found the perfect house – or so you think at the time. Potential buyers need to complete a 'checklist' before they decide on that dream home. The state of the foundation and the electrical system as well as water damage – all these matters (and more) have to be explored before you buy a home. Keep in mind that potential buyers can keep an eye out for types of damage and disrepair but they still need the professional help of a home inspector.

Read more...

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Money Saving Tips for Your Apartment

What Is The Best Real Estate Advice For First-Time Buyers?

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Within the US and Canada, sales of townhouses are 'going to town' (moving ahead in a vigorous manner). The term 'townhouse' has varied meanings in different countries. Historically in the UK and Ireland, 'townhouse' referred to the residence of a member of the aristocracy in a capital or major city. Famous townhouses are 10 Downing Street, residence of Prime Minister David Cameron, or Clarence House, home of the late Queen Elizabeth, the Queen Mother, and now the residence of Charles, Prince of Wales.

What are Townhouses?

Today in North America, this type of housing (either single-family or multiple-family dwellings) has a small "footprint." Usually, a townhouse is within minutes (either walking or with public transportation) of a city's business and industrial areas. Townhouses have been compared to a compromise between a condo and a regular home.

This housing category can include homes in the luxury market as well as more affordable houses. Superb examples of luxurious townhouses can be found in New York, Boston, Chicago, Toronto, Philadelphia, and San Francisco.

Why do People Buy Townhouses?

Part of the current appeal of townhouses is the wide range of prices. There is a townhouse for every budget and all age groups. Townhouses interest everyone from first-time buyers to empty-nesters who are downsizing to a smaller home. A first-time home buyer views a townhouse as an affordable alternative to a detached house. Building fees can cover issues such as snow removal, landscaping, or maintenance of the building's exterior.

Sometimes there is more demand for townhouses than can be supplied by the market. Wendy Jabusch, general manager of Hawthorne Homes, speaks about Canadian real estate and townhouses.

"Recent research shows that available townhome product -- homes started or available for pre-sale -- is only 14 per cent of the new construction market. The remaining 86 per cent of multi-family product is apartments," says Wendy Jabusch of Hawthorne Homes.

What does the Future Hold for Townhouses?

There has been a recent increase in townhouse developments. Construction starts of townhouses counted in at 250 in Calgary, Alberta during October, 2010. According to Canada Mortgage and Housing Corporation, that statistic showed the strongest month in 21 years for townhouse starts. Of course, there were fewer new townhouse constructions in 2009 because builders were working though units already in production.

Home buyers gravitate to townhouses for several reasons. Townhouses offer good value, attractive design, and lifestyle benefits. President and partner Tim Logel of Cardel Lifestyles says that he has found that townhouses have maintained their popularity since Cardel's first development in 2002. Logel is optimistic about townhouse sales in the coming year.

"I expect 2011 to be a strong year for townhome sales as affordability and the job market improves in Calgary," says Tim Logel of Cardel Lifestyles.

City homebuyers go to town

Manhattan Townhouses

New York City townhouses never lose their appeal. It is easier to get financing for a city townhouse than a NYC co-op. Generally, lenders look upon a Manhattan townhouse purchase as a wise investment. If you buy a townhouse as an investment, rental income can take care of the monthly mortgage payment.

Financing A Manhattan Townhouse

Are You Planning To Buy A Townhouse?

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With its home values increasing by almost $11 billion in 2010, the Boston housing market is going in the opposite direction of the national trend. According to Zillow.com, Boston real estate is a better and brighter market. Since the city is now in a more favorable position than the rest of the country, its market will enter 2011 in great shape.

Home Values

As the housing market stabilizes, Boston should continue as a bright spot. Keep in mind that the city's current home values are an impressive lot. After all, U.S. home values are expected to lose $1.7 trillion this year. That decrease is 63% more than the $1 trillion decline in 2009. The latest figures confirm that total value lost since the 2006 market peak has been $9 trillion.

Home values had been appreciating from 2003 to 2005 (and in certain instances, during 2006). When subprime mortgages became popular, home owners believed that their houses would continue to increase in value. The rate was unsustainable, however, even with the help of government interventions such as the expired Federal Homebuyers' Tax Credit.

The market referred to as the 'Boston Metropolitan Statistical Area' was just one of two shining lights in the recent statistics. San Diego also showed an increase of $10.2 billion in home values.

Surprising Statistics

Now the Boston statistics were a bit of a surprise – at least to Robert Murphy, an economist at Boston College. He referenced the S&P/Case-Shiller Home Price Index (a measure for the U.S. residential housing market). Murphy believed that they reported home values in Greater Boston had not fallen as far as in other U.S. regions.

Yet despite his surprise at the latest statistics, this economist had to admit that Boston is enjoying a positive economy. Murphy pointed to two main industries (health care and education) stabilizing the Boston housing market as well as employment sectors. He reminds everyone, however, that Boston home values are still down $105 billion from their peak in 2005.

"The state’s unemployment rate is 8 percent, vs. 10 percent nationwide, so we’ve done better in that sense too,” says Robert Murphy, Boston economist, explaining the city's encouraging economy.

Foreclosure Effect

Is it possible that foreclosures are affecting recent statistics about Boston home values? Probably not! Yet Boston has seen its share of foreclosures.

There were 11,334 foreclosures from January-October in Massachusetts – an increase of 7,710 from 2009. Median prices for single-family homes, however, have increased since July. It will take six months (or even longer) though for downward pressure on median home prices to be felt in the market.

Hub home values up by $11B

Falling Home Values

New York City had the biggest decline at $103 billion and Chicago experienced $48 billion in losses. The value of homes in the Chicago metropolitan area is expected to fall 7.1% (to $625.8 billion) this year compared to 2009. The predicted loss of $48 billion is a better showing than the 2009 $66.7 billion loss. A local real-estate agent believes that Chicago home values will decline another 2%-3% during 2011. That fall would be a result of increased foreclosures and short sales.

Chicago’s home values dropping — but 2010 better than 2009

What Is The State Of Home Values In Your Area?