Karp Real Estate

North Shore Market Update - Evanston

This is third article in a series about residential real estate on Chicago's North Shore. Watch for more communities in subsequent posts!

Evanston

• The number of homes sold in Evanston declined by 9.7% in 2011 compared to 2010.  For single family homes the decline was 7.5% while condo/townhome sales declined by 11.7%.  This community is not keeping up with the sales activity in the state, the greater Chicago area, or even within the city of Chicago.  In fact, Evanston had the worst performance on this measure among all of the communities that I analyzed. (Though Lake Forest was not far behind with a 9% decline in sales in 2011.)
• Similar to Deerfield, over 20% of the sales in 2011 were distressed properties.  In Evanston the majority of the distressed sales were bank owned properties.
• Inventory for single family homes in Evanston is down to 7.4 months, which is very good.  Inventory of condos and townhomes in Evanston is 14 months, which is not good at all.
• The number of bank-owned homes and homes in pre-foreclosure in Evanston dropped since last July.  There were over 400 distressed properties according to public records, and now it is down to 340.  These distressed properties represent 1% of total housing units (THU) in Evanston.  For the North Shore as a whole, this is about 1.3%, so this is a positive sign for Evanston.
• The median price for a single family home in Evanston dropped by 2.3%, not bad compared to the state, the greater Chicago area, and the city of Chicago.  However prices for condos and townhomes dropped by almost 15% in Evanston. 

So, as in July when I did my last report, the city of Evanston is a tale of two cities.  Sales and prices for single family homes are showing modest declines, while condos and townhomes are showing dramatic declines.  Bottom line is that demand for condos and townhomes is still lagging.  The one positive for the Evanston market is that the inventory of distressed properties, the “Shadow Inventory”, has improved.

For 2012 I think we will see the number of home sales increasing in Evanston, but prices will continue to decline, especially in the condo/townhome market.

More to come.

Thank you for reading! If you want to know what is going on in your local market and why, please contact me directly.

To find any property for sale in the Chicago area, click here.

For up-to-the minute market information, including recent sales, on any North Shore community, click here.

 

 

Nancy's Chicago North Shore - Real Estate Market Update

This is the first in a series of posts about the real estate market on Chicago’s North Shore.  For this analysis I have been reviewing the year-end data for the following communities:

Deerfield, Evanston, Glencoe, Highland Park, Kenilworth, Lake Forest,  Northbrook, Skokie, Wilmette, and Winnetka. 

Before I get into specifics for each of these communities, this post includes some statistics about Illinois and the greater Chicago area for comparison to the North Shore:

Illinois

• December 2011 represented the 6^th month in a row with an increase in the number of homes sold in Illinois, according to the Illinois Association of Realtors.
• The total number of sales for the year was down versus 2010 by 0.1%, which basically means that the number of sales were about the same.   Some people that follow the real estate market may point out that 2010 sales were slightly inflated by the incentive of the first-time-buyer tax credit that was in effect during the first quarter of the year.  On the other hand, if you do the math, the current interest rates provide a much better long-term savings for buyers than those tax credits.
• The median price of a home in 2011 declined versus 2010 in Illinois by 9.2%

Chicago PMSA

(The Chicago PMSA, as defined by the U.S. Census Bureau, includes the counties of Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will)

• The number of homes sold in 2011 increased versus 2010 by 1.3%. (Better than the state of Illinois).
• The median price of a home declined by 11.9%. (worse than the state).

The City of Chicago

• The number of homes sold in 2011 declined by 6.2%. (worse than the state and the PMSA)
• The median price declined by 13.8%. (worse than the state and the PMSA)

Now when we look at the North Shore and see that total home sales increased in 2011 by 1.3% over the prior year.  This “bucks the trend” for the state, matches the Chicago PMSA, and is much better than the city!  Sales of single family homes on the North Shore increased by 2.5% in 2011, while condo/townhome sales actually declined by 1.3%.

It is my personal observation that the condo/townhome market has suffered much more than other types of properties this past year with prices taking a much harder hit than single family homes.  This is not only due to economic conditions – I believe that demographics play a factor as well.  Baby boomers that are now empty nesters are not rushing out to buy condos as quickly as their parents did back in the 1980’s.  That may explain why the numbers in the city are so much worse than the Chicago PMSA.

Tomorrow I will start posting information about specific communities on the North Shore.

Thank you for reading! If you want to know what is going on in your local market and why, please contact me directly.

To find any property for sale in the Chicago area, click here.

For up-to-the minute market information, including recent sales, on any North Shore community, click here.

 

Scorecard: market update for the North Shore Communities

After reading my recent series of posts providing an update on the North Shore real estate market, you may still be wondering how the various communities compare to one another.  So, here it is, the executive summary…

This is my personal ranking of the North Shore communities based on these factors within each suburb:

• Number of distressed properties that sold in the past 12 months (foreclosures and short sales)
• Number of properties currently in pre-foreclosure situation now versus 6 months ago.
• Number of bank-owned properties either on the market, or going on the market soon versus 6 months ago.

The communities at the top will see price recovery before the ones lower on the list….Skokie and Evanston at not looking good with an high and increasing levels of distressed properties.

1.Kenilworth

2.Winnetka

3. Glencoe

4. Lake Forest

5.  (4-way tie) Glenview, Northbrook, Northfield, and Riverwoods

9.  (3-way tie) Highland Park, Deerfield, and Wilmette

12. Evanston

13. Skokie

FYI, if you are ever interested in seeing information on recent sales in any suburb on the North Shore, you can find it by clicking here.  Then just click on the community of interest.

Thank you for reading!!  New topic next time, I promise.

Nancy S. Karp

 

To find any property for sale in the Chicago area, click here.

Market Update: Evanston, Illinois

The number of properties that are bank-owned or in pre-foreclosure in Evanston increased during the past 12 months by almost 6% to 405.  Seventy-five percent of these are pre-foreclosures, that is, people that are not current on their mortgage payments. 

There were 109 sales of distressed properties in the past 12 months in Evanston.  But unlike Deerfield, over 70% of these were condos and townhomes (“attached” properties), and about half of the sales were foreclosures and half were short sales.  The problem in Evanston is that demand for attached properties is very low relative to the number of units available for sale.  This is in addition to the fact that many of these are distressed properties, so it is like a double whammy on values for attached properties.  As of August 1, 2011 there were over 440 attached properties listed for sale on the MLS in Evanston!  These have been selling at a rate of about 33 a month – so that means the current inventory could take 14 – 15 months to sell.  When you add to that the fact that there will be more of these properties coming onto the market in distressed situations...the downward pressure on prices will continue for a while.

The bright spot for Evanston is that the inventory level of single family homes is much better, at 5-6 months.  There will be more short sales and bank-owned properties on the market in the coming months, but with the lower inventory levels hopefully these will be absorbed by the market quickly.

Thank you for reading!!!

NOTE:  This is third article in series with local market info on the North Shore.

nsk

To find any property for sale in the Chicago area click here.

 

 

Shadow Inventory is REAL on Chicago's North Shore!!

I have been hearing about this "Shadow Inventory" for months.  Experts have been saying that real estate prices will be going down some more this year because there are tons of foreclosed properties about to hit the market.  Plus they also point out that many other potential sellers will be putting their homes on the market because they are tired of waiting for the market to get better. They've been saying this for so long, that it is beginning to sound like that old story about the boy who cried "wolf." 

When I talk about the Shadow Inventory to some people on the North Shore, they give me a surprised look and say something like, "There aren't any foreclosures around here, I haven't seen any foreclosures signs."

Well I have to agree with part of that sentiment.  I haven't seen any foreclosure signs either.  You know why?  Real estate companies don't typically put up a sign that says foreclosure when they are trying to sell a property.  The only foreclosure signs I've seen are on the 10 pm news!

So, this morning I did some research to find out if there really is any "Shadow Inventory" on the North Shore.  And, I also pulled some numbers that may surprise you - there have been many foreclosures on the North Shore in the past 12 months!!  I looked at these North Shore towns:  Deerfield, Evanston, Glencoe, Glenview, Highland Park, Kenilworth, Lake Forest, Northbrook, Northfield, Riverwoods, Skokie, Wilmette,  and Winnetka.

In the 12 months ending today (1.26.11) there were 467 foreclosed properties sold by real estate agents in these North Shore towns.  In that same period there were 377 short sales in the same 13 towns (source: MRED MLS).

There are currently 1,969 properties in these same North Shore towns that are in the foreclosure process (pre-foreclosure) or already bank-owned and not yet sold to new buyers (source: Realist public tax records).  Not all 1,969 properties will end up in foreclosure or as short sales, but it is more than double the number of short sales and foreclosures that were sold in the past 12 months. This also does not take into account the "pent-up" potential inventory from sellers that have been waiting to sell their homes.

Click on this link to see town-by-town details in a cool 3-D chart, Download Shadow inventory 1.26.11.  You'll see that Skokie, Evanston, Northbrook and Glenview head the list with the most Shadow Inventory.  You'll also see that not a single town is exempt from this - yes even Kenilworth has some distressed properties.

If the banks start listing the Shadow Inventory for sale all at once, it will put more downward pressure on prices.  I am hopeful that the banks will release the properties onto the market slowly to minimize the impact on prices.  Only time will tell.

Thank you for reading!!

To find any home for sale in the Chicago area, click here.

Real Estate Market Showing Signs of Improvement!

There are some signs that housing market is finally starting to recover. I am cautiously optimistic - the experts (and I) are not suggesting that it will come roaring back and that we will see 2006 numbers right away.  Here are some positive statistics:

• National Association of Realtors released their December Existing Home Sales Report this week. The report showed a 12.3% increase in closed transactions over the month before.
• Also this week the Census Bureau reported that privately-owned housing units authorized by building permits in December were at a seasonally adjusted annual rate of 635,000. This is 16.7 percent above the revised November rate of 544,000.

Both of the above reports are promising.  However, not all the news in the reports was positive.

• Existing home sales were slightly down from the same month last year.

You may recall that home sales were artificially inflated at the end of 2009 because of the First Time Homebuyer Tax Credit, which was set to expire at the end of the year.  So comparisons between Q4 of 2009 to 2010 are somewhat murky.

So overall, these reports seem to suggest that we may have bottomed out in regard to the number of transactions being completed. That can only be a positive for the industry. 

There is still a huge amount of visible and shadow inventory (homes in foreclosure and other sellers that have been waiting to sell their homes) which will continue to put downward pressure on prices.  It seems that buyers are beginning to realize that there are tremendous opportunities in the market.

My biggest concern about the recovery is the banking industry.  In addition to the foreclosed properties that are expected to come onto the market, the other side of the equation is the availability of mortgages.  I heard recently that Fannie/Freddie will be initiating “risk based” pricing adjustments this week.  This means that:

• Clients will now have to put down 25% regardless of property type and have at least 740 credit score to receive best pricing. 
• Rates will be higher for home buyers with less than 20% down for conventional loans and for “combined loan to value” loans, (with second mortgages).

Right now, the rates are still very good, but how many home buyers will qualify?  Here are rates this week, quoted by one of my mortgage brokers:

• 4.625% for a 30 year fixed “perfect” loan, (40% down, paying escrows with mortgage). 
• With 20% down, we’re at 4.75%. 
• With “risk based” pricing, we would be at 4.875% with 20% down and a 720 credit score. 

Thank you for reading and GO BEARS!!!

Click here to search for your next home on Chicago's North Shore.

Thinking about Buying a Foreclosured Home? Think again!

This article by Ilyce Glink at InMan News is a great first step for anyone considering purchasing a foreclosed property.  Click Here to Read: Look Before You Leap

This article confirms something that I have been telling my clients for over a year - while there are some good deals out there in foreclosures, you need to do a lot of homework in order to find those deals and make them happen.  For your average homeowner, the investment of time that is required just isn't worth the savings.  And in many cases, once you've purchased your "great deal," then you've still got a ton of work to fix it up before you can even move in. And some cases, you can't even get inside the house before you buy it! 

Meanwhile, prices have been coming down, and there are some good opportunities to be found without going through the extra investment of time and energy required for a foreclosure. 

AND, as you know I am the perennial optimist, I really think that things are picking up.  There has been a flurry of properties going under contract over the past couple of weeks.  I have one contact pending now.  I had another one, but the deal fell through during the attorney review and inspection period - the buyer got cold feet.  And I have been negotiating another deal all day long today - I hope to have that one tied up later this evening or first thing in the morning.

Stop by my open house at 368 Ridge in Highland Park this Sunday from 12 - 2pm - great ranch on over 1/3 acre!!  www.368Ridge.com.

As always, thank you for reading!