Archive for the 'For Sellers' Category
Home Sales Expected To Rise In 2012, But What About Housing Values?
May 3rd, 2012 categories: Chicago Real Estate News, Economic Recovery, For Sellers, Housing Market
The latest report from the National Association of REALTORS®, the association’s Pending Home Sales Index, indicates that condominium and single-family home sales will rise in 2012 when compared to a year earlier.
That’s good news for home sellers. And the REALTORS® association trumpets the numbers in a press release that maintains that the housing market across the country is firmly in recovery mode.
But there’s a reason that this housing recovery – and sales are increasing in Chicago, too – feels so hollow. While the number of condominiums and single-family homes selling is on the rise, the prices of these sales are not.
In fact, the latest numbers from the Standard & Poor’s/Case-Shiller housing price index indicate that housing prices across the country are beginning to fall. The news is especially gloomy for Chicago, where in February, according to the Case-Shiller numbers, housing prices in the area fell to a 12-year low.
So that’s why it’s so hard for home sellers to get excited over the good news coming from the REALTOR® association’s Pending Home Sales Index. Yes, homes are selling in greater numbers. But owners who purchased their residences during the housing boom years – say, 2004 through 2006 – are taking big losses when they sell homes now. According to Case-Shiller, Chicago-area housing prices have fallen by more than 37 percent since September of 2006.
There are plenty of reasons why housing prices continue to fall. First, and most importantly, they simply rose too high too fast during the days of the housing boom. That kind of price growth was unsustainable. Prices simply couldn’t have kept rising at that rate. Today, the housing market is in a period of correction. Housing values are falling to a more reasonable level, something that feels particularly painful to homeowners who spent so much for their condos and single-family homes just six years ago.
Then there are the foreclosures glutting the housing market today, both in Chicago and across the country. These distressed properties, which generally saw at prices below market level, drag down the values of homes around them. This results in a steady decrease in home prices in entire neighborhoods.
The difficult truth is that Chicago and the rest of the nation have a long way to go before the fallout from the housing crisis clears. And even as home sales across the country rise, there’s no denying that this housing recovery hasn’t been an enjoyable one for many homeowners.
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Case-Shiller Numbers Paint Picture Of A Still-Struggling Chicago Housing Market
April 30th, 2012 categories: Economic Recovery, For Buyers, For Homeowners, For Sellers, Housing Market
The most recent numbers from the Standard & Poor’s/Case-Shiller housing index paint a grim picture of the Chicago-area housing market. According to a story by Crain’s Chicago Business, the numbers show that housing prices in the Chicago area have fallen to a 12-year low.
That’s right: Housing values in the city in February fell to where they last stood in May of 2000, according to the Case-Shiller numbers.
The Case-Shiller report found that Chicago-area single-family home prices fell 2.5 percent in February when compared to January. Prices were down a high 6.9 percent this February compared to the same month one year earlier.
This news is especially grim if you purchased your Chicago-area single-family home or condominium in late 2006. According to Case-Shiller, Chicago-area housing prices have fallen 37.5 percent from where they stood in September of 2006, the peak of housing values in the city and suburbs.
The Crain’s story quotes Tom Feltner, vice president at Chicago’s Woodstock Institute, who says that this probably isn’t the bottom for the Chicago housing market, either. According to Feltner, we should expect to see prices for Chicago-area condos and single-family homes to continue to fall as an influx of foreclosure homes hits the market.
If you have to sell today, and you originally bought your residence in 2004, 2005 or 2006, the reality is that you’ll probably take a loss in the sale. Remember, buyers today don’t care what you paid for your residence six years ago. They only care about what your property’s market value is today.
If you absolutely must sell, then, it’s important to work with a skilled REALTOR® who knows your community. This agent can help you set the right price for your property, one that will generate the highest number of quality offers. It’s important, too, to listen to the advice of your REALTOR® when it comes to listing price. You can be stubborn and demand to list your residence for a higher price. The odds are good, though, that buyers will simply ignore your property and move on to those residences that are priced properly according to today’s market.
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Too Many Foreclosures In Chicago Area For Housing Values To Rise
April 17th, 2012 categories: Chicago Real Estate News, For Homeowners, For Sellers, Foreclosures, Housing Market
Don’t expect housing prices in Chicago to rise until the high number of foreclosure properties in the area are finally sold off. Unfortunately, according to the latest information from foreclosure site RealtyTrac, that isn’t going to happen any time soon.
According to the numbers, foreclosures across Illinois rose 17 percent during the first quarter of 2012 when compared to the fourth quarter of last year. Foreclosures in the state also jumped 14 percent when compared to the first quarter of 2011.
In fact, Illinois had the dubious distinction of having the third most foreclosures filings in the country during the first quarter, with its 37,600 properties with foreclosure filings trailing only California and Florida.
RealtyTrac’s March numbers for Illinois weren’t any better. According to the site, one in every 383 Illinois housing units received a foreclosure filing in March. Cook County alone during the month saw 6,950 foreclosure filings.
Foreclosures are bad for everyone. Families going through them suffer great financial loss and even greater emotional turmoil. Banks certainly aren’t thrilled to be stuck with so many homes that they usually have to sell below market value. And then there are other homeowners. When foreclosures dot their neighborhoods, they drag down the values of all nearby homes.
Just look at the average price of a foreclosure property in Illinois, according to RealtyTrac: $121,387. Considering that in March Illinois had 102,068 foreclosure homes, according to the site, that’s a lot of low-cost inventory for buyers to work through.
If you want to sell your home, this isn’t the best news. My advice? If you don’t absolutely have to sell, hold off. If you have no choice, talk with a REALTOR® who knows your neighborhood and can help you set the best possible price for your residence.
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Renting May Not Be Cheaper Than Buying
April 11th, 2012 categories: Chicago Info/News, For Buyers, For Sellers, Housing Market, Renting in Chicago
Think renting an apartment will save you money when compared to buying a house? Don’t be so sure.
According to a story by the Reuters news agency, average monthly apartment rents across the country saw their biggest increase in four years.
This sheds new light on the age-old rent vs. buy question.
Some have said that it makes more financial sense to rent as housing values continue to fall across the country. But does that still hold if apartment rents continue to rise? As rents climb, it no longer seems quite as affordable to rent.
According to the Reuters story, asking rents across the country have risen to $1,070 a month on average. That’s an increase of 0.5percent from the last quarter of 2011. Effective rents, which take away perks offered by landlords such as free months of rent, jumped 0.9 percent during the first quarter of this year to $1,018 a month. That’s the largest increase in effective rents since the first quarter of 2008.
There’s a simple reason why rents are rising so quickly: supply and demand.
The Reuters story reported that apartment vacancy rates in the first quarter of this year fell to their lowest levels in more than a decade, to a stunningly low 4.9 percent. As demand for apartment living increases – thanks in part to housing foreclosures – the supply of available units has been shrinking. That allows landlords to increase the amount of rent they charge each month.
Will this formula change any time soon? It doesn’t look like it. Foreclosures continue to rise, and people who’ve lost their homes need to live somewhere. Many of them are entering the rental market, further reducing the amount of available rental units.
So if you’ve long thought that renting was a cheaper option than is taking on a mortgage loan, the latest numbers suggest that you may have to change that line of thinking.
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Does new research report oversell housing recovery?
April 3rd, 2012 categories: Chicago Info/News, Economic Recovery, For Sellers, Housing Market
Is a new report from the Urban Land Institute on the nation’s housing too optimistic? That’s the debate.
According to a recent story by the Wall Street Journal, the Urban Land Institute in late March released a report that details several encouraging trends in both residential and commercial real estate.
For instance, the survey predicted that the demand for new homes will finally start to rise again. According to the Urban Land Institute, single-family housing starts should jump from 428,600 in 2011 to an estimated 800,000 in 2014.
Even more encouraging for home sellers is this prediction: The Urban Land Institute says that home prices may start to rise again in 2013. And three years after that, the institute predicts, housing prices will have risen by 3.5 percent.
However, the Urban Land Institute report is not completely positive. Researchers with the institute say that consumers should not expect a housing recovery that in any way resembles the residential housing boom, when the country saw soaring home prices. The coming recovery will be a more modest one. But, the researchers predict, it will also be a steadier one.
The recovery will also not be universal. Researchers predicted that certain markets that were particularly hit hard, places like Las Vegas and parts of South Florida, will trail behind healthier areas for many more years when it comes to housing prices.
Even with the caution thrown in, critics have complained that the Urban Land Institute report is too optimistic. The Wall Street Journal story quotes Kenneth Rosen, chairman of California’s Rosen Consulting Group, as saying that it stretches belief to imagine that new single-family home starts will nearly double by 2014.
Who’s right? I’d love to say that the folks at the Urban Land Institute are in the right. But it’s far too early to say. I’ve learned that today’s housing market is one of ups and downs. We’ll just have to wait to see if home prices actually do start to rise in 2013.
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