Karp Real Estate

North Shore Market Update - Glencoe and Highland Park

This is 4th posting in a series about the housing market on Chicago's North Shore.

Glencoe

• Glencoe had a terrific year with 24.5% more homes sold in 2011 than in 2010. 
• Less than 15% of the home sales were distressed properties (short sales or bank-owned).  More of the distressed property sales were short sales than bank-owned properties.
• Inventory levels are a little high for both single family homes and condos/townhomes at just over 9 months for all types of homes.  This is the only negative indicator for Glencoe right now.
• The number of homes in pre-foreclosure or bank-owned declined slightly from 27 last July to 25 now.  This is less than 0.8% of the total housing units (THU) in Glencoe.
• The median price of a single family home in Glencoe stayed exactly the same in 2011 versus 2010.  Median prices for condos/townhomes went up in 2011 versus 2010, but this was based on only 5 sales, so I am not going to report that number. 

All of the measures above are very positive.  I expect sales to continue to increase in Glencoe and as this activity increases, we may see some modest price increases in the coming year.

 Highland Park

• The number of homes sold declined by 2.8% in Highland Park in 2011 versus 2010.
• Over 90% of the sales were traditional sales (not short sales or bank owned properties). 
• Inventory levels in Highland Park are high, with over 12 months of inventory for single family homes and over 19 months of inventory for condos/townhomes.
• Similar to Glencoe, the Shadow Inventory (homes in pre-foreclosure or bank owned) is 0.8%  of toal housing unit (THU) in Highland Park – this is good.  Last July there were 121 properties in pre-foreclosure or bank owned.  Now it is down to 93.
• The median price for single family homes in Highland Park declined very slightly, by 1.1% versus 2010.  Condo/townhome median price grew by 33.6% (which is a bit of an anomaly with over 19 months of inventory).  

While the statistics for Highland Park are not quite as good as Glencoe, I think that this market is also on a positive path, maybe a few months behind their neighbors to the South.  I expect sales to increase and then prices should begin to stabilize in the second half of the year.

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: Glencoe and Glenview

Before getting to the Glencoe and Glenview updates, I first want to share a little info about the North Shore for comparison.

For the entire North Shore, here are some important numbers to note with regard to distressed property sales during the past 12 months. 

Chicago’s North Shore 12 months ending 7.26.2011	Bank-owned properties Sold	Short Sales	Total distressed property sales
Total	408	338	746
% single family homes	59%	65%	62%
% condos/townhomes	41%	35%	38%

 

 

 

Meanwhile, as of July 26, 2011, there were 1,465 properties on the North Shore in pre-foreclosure.  These are households that are behind on their mortgage payments by at least three months.  All of these properties that may end up on the market as short sales or they may end up in foreclosure and sold as bank-owned properties.  Some homeowners may recover from and catch up on their payments, but the majority will not. 

Additionally, on the same date, I found 503 bank-owned properties in the tax records on the North Shore.  Some of these are already listed for sale, and the rest will be hitting the market in the coming months. 

So, to summarize, there were 746 distressed properties sold in the past 12 months, and there are potentially 1,968 distressed properties in the wings on the North Shore.

Interestingly, even though there were 746 distressed properties sold during the past 12 months, the total number of distressed properties in the wings (also known as “shadow inventory”) is about the same today as it was in January when I last reported on this.  This means that there are additional households having financial difficulties and falling behind on their mortgages.  A useful benchmark I am using to analyze the local markets is the number of distressed properties sold during the past 12 months as a percentage of the shadow inventory.  For the entire North Shore this is 746 divided by 1,968 or 38%. 

Glencoe

Shadow inventory in Glencoe declined from 33 properties to 27 properties from January to July.  This is a good sign for this community.  And, there were 17 distressed sales (short sales or bank-owned properties) during the past 12 months.  The number of distressed sales over the past 12 months was about 63% of size of the shadow inventory – another good sign for this market as this is significantly higher than the North Shore benchmark average of 38%. 

Glencoe 12 months ending 7.26.2011	Bank-owned properties Sold	Short Sales	Total distressed property sales
Total	6	11	17
% single family homes	100%	100%	100%

 

 

Glencoe may be at, or close to, the bottom of the market and should see stabilization in home prices as the remaining distressed properties are sold. 

Glenview

The number of distressed properties in Glenview as of July 26^th (265) is about the same as it was on January 26^th (262).  About ¼ of these are bank owned properties – the rest are in pre-foreclosure.

A total of 136 distressed properties sold in Glenview during the past 12 months.  This is about 51% of the shadow inventory, and is better than the 38% average for the North Shore.

Glenview 12 months ending 7.26.2011	Bank-owned properties Sold	Short Sales	Total distressed property sales
Total	84	52	136
% single family homes	62%	35%	51%
% condos/townhomes	38%	65%	49%

 

 

 

I believe that Glenview will continue to see some downward pressure on prices in the coming months because even though 136 distressed properties were sold, they have almost the same number in shadow inventory as they did 6 months ago.

Watch for Highland Park, Kenilworth and Lake Forest tomorrow...(or contact me directly for the complete report all in a single document.)

Thanks for reading!!

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

Market Update - Glencoe Home Sales

During the past three months there were 32 homes that sold (closed) in Glencoe, according to the local MLS.  Of these, three were three bank-owned properties and three were short sales - that means that over 18% of the homes sold in Glencoe in the past three months were distressed properties.  All of these distressed properties were all sold for under $1 million.  (See chart below)

These distressed properties will continue to cause downward pressure on prices for all homes, not just the distressed properties.  For home buyers, this can be good news.  However, be very careful when purchasing a distressed property.  These  "bargains" don't come without any problems.  By the time a home is foreclosed by a lienholder, the home owner has not had sufficient funds to properly maintain the house.  This can have unforeseen consequences down the road for the new homeowner. Short sales are a mixed bag - some short sales are in better condition than others.  It really depends on the seller's reason for selling, and whether or not they have had the financial ability to take care of their home. 

 

There are currently 115 homes for sale in the MLS in Glencoe. With an average of 10 - 11 homes being sold in each of the past three months, it could take about 10 months for all of these homes to sell, assuming the sales rate is the same for the next few months. Typically home sales increase during the spring months of April, May and June, so hopefully these homes will sell a faster than that.

One concern I have is that 56% of the homes for sale in Glencoe today are priced over $1 million, while the sales in the past few months suggest that there are more buyers in the lower price ranges. Only 28% of the purchases in the past three months were over $1 million.  So it will probably take more time for the more expensive homes in Glencoe to sell than the less expensive ones.  The luxury market is softer than the rest of the market.

To find any home for sale in Glencoe, please go to www.KarpRealEstate.com.  Whether you are buying or selling, in today's market it is very important to work with a real estate agent that fully understands the dynamics of the local market! 

For more information about Nancy and homes for sale on Chicago's North Shore, visit www.KarpRealEstate.com.

Thank you for reading!

nsk

 

Glencoe Home Prices

 
If you purchased your Glencoe home prior to 2001, then your home is still worth more than you paid for it!  After prices in Glencoe peaked in 2007, they have continued to decline and are now similar to prices seen in 2001 and 2002. (Data Source:  MRED Multiple Listing Service)

 

In fact, if you purchased your Glencoe home in 1980, it could be worth 4 times what you paid for it!  The average sale price for a single family home in Glencoe was under $200,000 in 1980 - and by 2010 it was over $1 million!  Not a bad investment.  (I was looking at homes in Glencoe in 1980 - wish I had bought back then!)

People that bought during the past 10 years however, may not be quite as happy with the current prices.  Depending on when they bought, prices may be the same or lower. 

If you are thinking about buying a home in Glencoe, now is the best time to do it.  In addition to the fact that the clock has turned back about 10 years on the prices, interest rates are much better today than they were 10 years ago.  So the actual COST OF HOME OWNERSHIP is lower for home buyers today than it was back then. 

Back in the early 1980's mortgage interest rates were in the double digits - 18 - 19% at one point!

One more thing to keep in mind, this chart shows trends for average and median home prices. Right now the market for the luxury homes (over a million dollars) is a little bit softer than for less expensive homes - so you can't assume that the trends shown here are identical regardless of the price point.  In general, luxury home prices on the North Shore have been hit a little bit harder than prices overall.

Contact me directly for PDF of this chart and the numbers that go with it, or for more information on home prices in Glencoe.  If you would like me to help you determine the value of your Glencoe home, contact me for a no obligation market evalution.

Thank you for reading!

To find any home 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.

Lake Forest, Highland Park, Glencoe - Real Estate Market Review

During the 6 months ending November 16, 2008, there were some similarities in trends across these three neighboring towns, and also some differences.

SALES
The number of homes sold during the past three months in each of these towns on Lake Michigan declined from the prior three months.

• Lake Forest sales declined by about 55% from 63 homes to 28 homes.
• In Glencoe the decline was about 45%, with 23 homes sold in the most recent 3 months from 42 in the prior 3 months.
• The decline in Highland Park was only 25%, with 77 homes sold in the prior three months, and 58 in the most recent three months.

DAYS ON MARKET
In all three towns, the supply of single family homes currently for sale far exceeds the number of homes being purchased.  This is no surprise - you've heard that across the country we have a buyers' market, which by definition is a situation where supply exceeds demand.  What I find very interesting is the number of days (market time) that homes are available for sale.

The average market time for the homes that have sold is significantly lower than the average market time for the homes that have not sold in all three towns.  This dichotomy is most pronounced in Lake Forest where the 28 homes that sold in the past three months were on the market for an average of 175 days, while the remaining 348 homes that are still for sale have an average market time of 295 days!

In Glencoe the 23 homes sold in the past three months with an average market time of 199 days, and the remaining homes for sale have been on the market for 250 days.  And in Highland Park 58 homes sold during the past 3 months with an average market time of 237 days, compared to the 361 still for sale with an average market time of 278 days.

So, why are certain homes selling faster than others in this buyers' market? The buyers out there are very savvy and they are looking for a good value.  The homes that are the best value for the money are selling first.  With all of the information about homes for sale now available through the Internet, buyers can easily do some comparative shopping before they even step foot inside a home - and that is exactly what they are doing.  Those sellers that put their homes on the market with a competitive price from day one, are selling before the other homes.  Those home owners that want to try a higher price point to start out, and then lower the price later are suffering with extended market times.

Here are my personal statistics...
The homes that I market for my clients have an average market time of 104 days and they sell for 96% of the list price.

Thanks for reading!

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!