Housing Prices in Chicago Still Affordable, According to Zillow
February 19th, 2010 categories: Chicago Real Estate News
Zillow.com has quickly become one of the most popular sites for homebuyers and sellers. Buyers use it to help determine if the home they are considering is a bargain or a rip-off. Sellers use it to help set the best price for their own listings, not too high and not too low.
Problem is, Zillow isn’t always accurate when it comes to housing prices. I’ve found that the market reports from the Illinois Association of REALTORS® are usually a far better gauge of how the Chicago housing market is performing.
That said, it can be fun to use Zillow to check out the average housing value of homes in your city. And the site is useful for determining housing trends: You’ll be able to tell, for instance, if home values rose or fell from one month to the next, and by about how much.
That’s why the fourth quarter markets report released earlier this month by Zillow is an interesting read. The news for Chicago? It’s good for buyers, not as great for sellers.
According to the report, home values in Chicago dropped 9.9 percent from December of 2008 to the same month in 2009. Zillow lists the average value of a Chicago home at $200,900 in December of 2009. For the entire Chicago region, which also includes the suburbs, the average value of a home stood at $197,400.
What does all this mean for buyers and sellers? For sellers, it means that you really do have to be careful when setting the price of your residence. If you price it too high, you’ll struggle to sell; buyers can simply find better bargains from another seller. Your best move is to meet with a skilled REALTOR® who knows real estate prices in your neighborhood. This real estate professional can help you set the best price for your home.
For buyers, the Zillow report is actually good news. You can still find a reasonably priced house in Chicago, even if you’re looking for a condominium or single-family home in such hot neighborhoods as Lincoln Park, Lincoln Square, Lakeview or Wicker Park.
Of course, you shouldn’t take the Zillow report as gospel. You’ll find that Chicago homes in top locations in trendy neighborhoods will usually sell for far more than $200,900. This doesn’t mean that the Zillow report isn’t interesting reading, or that it doesn’t highlight local housing trends. It’s best, though, to rely on a REALTOR®’s information when trying to determine whether a home is a good bargain or slightly overpriced.
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Chicago Condo Sales Show Some Life, But For How Long?
February 17th, 2010 categories: Chicago Info/News, Economic Recovery, For Buyers, For Homeowners, For Sellers, Housing Market
I believe that the Chicago housing market is in the middle of a turnaround. Some might accuse me of being overly optimistic; after all, I am a REALTOR®. A revived housing market is certainly in my best interests.
But more and more, the local housing numbers are backing up my optimism.
For instance, Crain’s Chicago Business last week reported that the sales of condominiums in downtown Chicago rose in the fourth quarter of 2009. This is especially significant, as city condo sales dropped dramatically as the Chicago real estate slump worsened. To see condo sales rising, even slightly, is as good a reason as any for optimism.
The Crain’s story, of course, wasn’t all good news. It’s true that builders sold 148 condominiums and townhomes in downtown Chicago during the last three months of 2009. And it’s also true that this number is a nice increase from the 56 condo and townhome sales made in downtown Chicago in the third quarter of the year.
But Crain’s does throw in some sobering news: The story quotes researchers from Chicago’s Appraisal Research Counselors who say that the Chicago condo market won’t make a true rebound until the local unemployment numbers fall. The story also says that the number of condo sales won’t rise more dramatically until local buyers gain faith that the prices of downtown condominiums will no longer continue to drop.
Gail Lissner, vice president of Appraisal Research, said it best when she was quoted as saying that Chicago buyers still have to be convinced that the local housing market has finally bottomed out and that housing prices will soon start to appreciate at a faster rate.
Still, it’s hard not to get excited by these latest Chicago housing numbers. I’m still confident, in fact, that next year we’ll look back at 2010 as the start of our city’s housing recovery. I’m not sure when, or if, downtown condo sales will again approach the sales numbers they registered during the days of the housing boom. But I am confident that buyers will begin purchasing these units again. Downtown Chicago is simply too enticing and strong of an area for it not to feature a condo revival.
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Home Equity Numbers Not As Sobering As Thought
February 16th, 2010 categories: Chicago Info/News, Economic Recovery, For Homeowners, Housing Market, Mortgage Info
Late last year, data company First American CoreLogic released a report saying that one in every four homeowners were underwater on their mortgage loans in the third quarter of 2009. These homeowners owed more on their mortgage loans than what their homes were worth.
It was a sobering statistic, especially considering how important home equity is to the wealth of most U.S. homeowners. You’d think from news like this that the total value of U.S. homeowners’ home equity would have plummeted during the recession and housing slump.
Surprisingly, though, you’d be wrong.
Syndicated real estate columnist Ken Harney recently reported on the fact that the net equity of U.S. homeowners actually grew from the first quarter of 2009 through the third quarter of that same year. It grew, in fact, by nearly $1 trillion during this period. Harney also reports that it grew by $418 billion from June 30 of 2009 through Sept. 30 of the same year.
These numbers pale in comparison to the way home equity grew during the boom years of the housing industry. But Harney points out that the most recent data suggest something positive: Prior to this report, the net equity of U.S. homeowners fell for three straight years. Perhaps the rising numbers, even if they aren’t rising as quickly as some would like, are more proof that the worst of the U.S. housing slump is over.
As far as I’m concerned, the numbers are positive. And these aren’t the only positive ones I’ve seen lately suggesting that the housing market, both locally and nationally, is finally on a rebound. Home sales continued to rise during the second half of 2009, both in Chicago and across the United States. At the same time, Crain’s Chicago Business recently wrote that even downtown Chicago condo sales rose in the fourth quarter of 2009, and that market had suffered greatly during the housing slump.
I’m not suggesting that the country’s housing market has recovered fully. But I do believe that numbers such as those showing that home equity has risen are a good sign that not only has the recovery begun, but that it’s picking up steam.
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Chicago REALTORS® – And Sellers – Looking Forward To A Better 2010
February 11th, 2010 categories: Chicago Info/News, Economic Recovery, For Buyers, For Homeowners, For Sellers, Housing Market
Chicago Tribune writer Mary Ellen Podmolik did a good job last week in summing up the mood at the 2010 Economic Forecast held by the Chicago Association of REALTORS®: 2009 was not great. This year, while not exactly shaping up to be a banner year, should be better.
The Chicago association holds its economic forecast every year. As you can guess, the last few have been quite gloomy. This year’s, though, had a different air about it: Attendees and speakers seemed to think that the worst days of the local residential real estate market were behind us.
I agree. When I look at the second half of 2009, I see a local housing market in recovery mode. Chicago condominium, townhouse and single-family home sales rebounded quite nicely even as summer turned to fall and fall turned to winter. All signs are that housing sales will continue to rise as the 2010 spring selling season arrives. Prices, however, will not rise.
The economic forecast is not only a good event at which to gauge the mood of my fellow REALTORS®, it’s also a time to look back at the year that was.
At the most recent economic forecast, we learned that 51 percent of Illinois buyers in 2009 were first-time buyers. These buyers had an average age of 29 and boasted a median annual household income of $64,400. Repeat buyers in the state had a median annual household income of $92,800.
Detached single-family homes accounted for 67 percent of the home purchases in Illinois last year. Buyers said that they generally sold their homes for 95 percent of their listing price. That would rank as a solid figure if 58 percent of sellers hadn’t also reduced their listing price at least once before selling their homes.
Podmolik also pointed out a rather grim statistic: In Chicago last year, an astounding 50 percent of single-family home sales and 18 percent of condominium sales were either short sales or foreclosures last year. Those are two numbers that simply must fall in 2010.
I think I speak for everyone when I say “good riddance” to 2009. One last look at the year is all I can take. I have a feeling, though, that when the Chicago REALTORS® hold their 2011 economic forecast, we’ll have much fonder memories of 2010.
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Is Super Bowl Still The Kickoff To The Chicago House-Buying Season?
February 8th, 2010 categories: Chicago Real Estate News
Here are some interesting spending stats about America’s favorite football game, the Super Bowl:
1. Nielsen Research reported that nine out of 10 U.S. households planned to watch this year’s clash between the Colts and Saints at their own homes or at a friend’s instead of at a bar or restaurant.
2. Only 5 percent of consumers said they expect to spend more on food and beverages for the Super Bowl this year than last.
These two numbers suggest one thing: Consumers are still being frugal with their money. They’re still not spending freely. And who can blame them? Many of them are still worried about losing their jobs.
What does all this mean for the Chicago residential real estate market? Well, if consumers are as interested in saving money as they say they are, they’ll find that now is a terrific time to buy a condominium or single-family home in Chicago.
The median sales price of homes in even the top city neighborhoods, places like Lakeview, Lincoln Park, Lincoln Square and Wicker Park, is down significantly from just one year ago. The Illinois Association of REALTORS® reported that the year-end median price for a Chicago home in 2009 stood at $225,000. That’s down a solid 22.4 percent from 2008, when the year-end median price stood at $290,000.
Buyers have traditionally returned in droves to the residential real estate market after the Super Bowl. It’s as if the big game marks the unofficial end of the winter-holiday season. What about this year, though? This is still an unusual market, what with the national unemployment rate still uncomfortably high. Will Chicago buyers start looking in earnest for new townhomes, condominiums or single-family homes now that the game is over?
I think they will. It’s just too good of a time to buy. If the buyers do come out, they’ll find some terrific bargains. And if we’re to believe the statisticians at Nielsen, that should be enough to provide yet another boost to our local housing market’s young recovery.
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