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: Highland Park, Kenilworth, and Lake Forest

This is the 5th article in a series I am writing about the real estate market on Chicago's North Shore.  In these blog posts I talk about "shadow inventory."  These are homes that are in pre-foreclosure (the owners are 3 months or more behind on their payments) or homes that have already gone through the foreclosure process and are bank-owned.  Some of these homes may already be available for sale, but most of them are not.  They are called "shadow inventory" because although they are not for sale at this point in time, and many of them will be for sale in the coming months at discounted prices (as short sales or bank-owned properties) because of their distressed status.  When these types of properties are for sale, this causes prices decline.  So the fact that these properties are potentially going to hit the market in the coming months is NOT A GOOD THING.

Highland Park

 Shadow inventory in Highland Park increased to 121 properties from 113 during the past 6 months; 23 % of these are bank owned and 77% are in pre-foreclosure.  This isn't a huge increase, but it still isn't a good sign for this market.  

A total of 54 distressed properties were sold during the past 12 months – less than half were bank owned and the rest were short sales.  The good news for Highland Park is that the number of distressed properties sold over the past 12 months as a percentage of the current shadow inventory is 44%, which is above the North Shore average of 38%.   

Highland Park - 12 months ending 7.26.2011	Bank-owned Properties Sold	Short Sales	Total distressed property sales
Total	26	28	54
% single family homes	100%	89%	94%
% condos/townhomes	0%	11%	6%

 

 

Overall, I think that pricing recovery for Highland Park is going to be a little bit slower than for its neighboring communities to the North and South.

Kenilworth

This is a very small and exclusive area.  The shadow inventory in Kenilworth increased by 28% since January.  I know that sounds like a lot, but in reality it only “jumped” from 7 properties to 9.  (This is why you have to be careful when you hear people quoting statistics – they can be very misleading!).  There is one bank owned property and 8 pre-foreclosure properties.  Yes, believe it or not, there are 8 households living in Kenilworth that have not been paying their mortgage!

During the past 12 months there were 3 distressed properties that sold in Kenilworth – 1 bank owned property and 2 short sales.  The distressed sales are 33% of shadow inventory, which is below the North Shore average.  But again, we are talking about very small numbers in a very small community.

Kenilworth - 12 months ending 7.26.2011	Bank-owned properties Sold	Short Sales	Total distressed property sales
Total	1	2	3
% single family homes	100%	100%	100%

 

 

Prices will probably stabilize in Kenilworth before anywhere else on the North Shore.  However, just like the other communities, the presence of bank owned properties will continue to put some downward pressure on prices. With only one bank owned property right now, things aren’t too bad.

 

Lake Forest

Lake Forest had a dramatic decrease in shadow inventory since January.  It went from 107 properties to 69.  This is a very good sign for the real estate market in Lake Forest.  Interestingly, only 26 distressed properties sold in the past 12 months in Lake Forest.  Almost 70% of these were short sales.

 

Lake Forest - 12 months ending 7.26.2011	Bank-owned properties Sold	Short Sales	Total distressed property sales
Total	8	18	26
% single family homes	87%	94%	92%
% condos/townhomes	13%	6%	8%

 

 

The number of distressed sales relative to the shadow inventory is about 38%.  This is equal to the North Shore average.  I think that this benchmark is outweighed by the dramatic decline in overall shadow inventory during the past 6 months.  This community may see prices stabilize in the near future if the number of distressed properties continues to decline at this rate.

If you are interested in seeing the complete report, just contact me and I will send you document that includes all the info for the North Shore in one article.

Next post will cover Northbrook and Northfield...

Thank you for reading!!

Nancy S. Karp

 

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

 

Stop signs in Highland Park Need to be Enforced!

I heard about it the day before the newspaper came out. Then I read with great sadness about the 11-year-old boy that was hit by a car at a busy intersection with a 4-way stop in downtown Highland Park.  The boy suffered a broken leg and a fractured skull!  It could've been much worse.  The boy was lucky - he was riding a bike without a helmet.

When I first heard about this incident, during an exercise class at the rec center, everyone in the room started chatting about how terrible it is to drive in downtown Highland Park because no one drives through the stop signs properly.  This is not the first time I've heard Highland Park residents express frustration at the way people drive in their town.

For some reason I haven't been able to get this out of my mind.

I've been driving in Wilmette and Winnetka a lot lately because my I am working out of the @properties office in Winnetka (until they open the new office in Highland Park later this year).  I was amazed to discover that the residents of Wilmette and Winnetka do not seem to suffer from this driving malady we have in Highland Park.  Almost every driver comes to a complete and FULL STOP prior to reaching the stop sign and then they politely observe the rules of the road.  The first driver to stop at the intersection (and you can tell who that is because everyone comes to a nice full and complete stop) is the first one to go. And on the few occasions when it is hard to tell who stopped first, the person on the right has gone first. 

In Winnetka they have signs all over the place warning people that the police enforce the stop signs.  I don't know if they really do that, or if the signs do the trick all by themselves.

Today I was on a bicycle in downtown Highland Park and I saw several cars just roll through the stop signs.  This behavior has to stop!  Well, actually, that is the point everyone has to stop!! 

Making matters even more concerning is that there are a couple of intersections with stop signs in downtown Highland Park that are NOT 4-way stops, and people seem to have no clue how to handle them.  These are very dangerous!

I am writing this post because I would like to suggest that people in Highland Park that are concerned about this situation should let the new mayor and the city council know that something must be done about it. Can the Highland Park police start enforcing the stop signs? If someone doesn't come to a complete stop, they get a ticket - that's not very complicated.  If it will prevent more accidents like the one reported last week, it would be well worth it!

No one is a perfect driver, including me. But I think this is WAY out of control and should be as much a concern for the Highland Park police as cell phone usage. (By the way, do you know anyone that has gotten a ticket for talking on their cell phone without a hands free device yet?) 

Thank you for reading.  Your comments are welcome!

nsk

 

 

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.

Highland Park Real Estate Market - a reflection of the whole northshore

In Highland Park during the past three years the median price for single family homes that have SOLD has declined by almost 40%.  Also during that same 3 year time period, the median price of homes that have gone under contract and sold has consistently been considerably lower than the median price of homes that are still for sale.  In other words the homes that have been priced more competitively are the ones that have been selling.

 

There are over 500 homes available for sale in Highland Park right now.  During the past three years an average of 20 homes sold per month.  During 2009 the average was even lower, slightly over 17 homes per month.  At that sales rate it could take over 2 years to sell all of the homes that are currently available!

 

Over the past 4 months we have seen an increase in the number of homes selling.  This is mostly due to the tax credits being offered by the federal government AND because interest rates are at historical lows -  for many borrowers it is below 5%.  This has caused some people (including me) to hope that the market is turning around and that prices will begin to increase again.  Unfortunately I have realized from my research that this is NOT the case.  The tax credits run out at the end of April, and interest rates are expected to start increasing after the end of March.  The end of the tax credit and the increasing interest rates are most likely going  to cause home prices to continue to decline.  This is basic economics – if the cost to purchase a home goes up (e.g. interest rates and loss of tax credits), then sale prices will go down.  Buyers are motivated by their monthly housing costs, not the PRICE of the home. So when interest rates go up and the tax credit goes away, their monthly costs go up  - unless the price goes down.  Making matters worse, experts are expecting another wave of foreclosures (bank-owned properties) to become available during the second half of the year.  This will also cause downward pressure on home prices (when inventory exceeds demand, prices go down).

 

While the specific numbers I quoted do not apply to each area on the North Shore of Chicago, the overall trends are the same, and so is the forecast.  Expect home prices to begin to fall after the tax credit goes away and interest rates begin to increase.

 

If you are a seller, my advice is to lower your price so that it is VERY competitive and VERY compelling to buyers so that you can sell it NOW before prices go down further.  And then, you need to weigh your options - buy quickly and get a better interest rate, or wait and and get a better price (with higher interest rate). 

 

Search for any property in the Chicago area:

Nancy's Web Site

Foreclosures On The Northshore

Teardowns.com

 

Thank you for reading!

nsk

Ready to move on, but you feel paralyzed by the market?

You are not alone.  Many people are thinking about moving from their current home into something smaller, larger, or to a retirement community, but they are afraid that they are stuck because of all of the negative press about the real estate market.

While it is true that if you have a property to sell right now, you aren't going to get the same dollars for it that you would've 2 or 3 years ago, there are still many good reasons to sell now instead of waiting. Here are my top 5 reasons to sell now, not later:

1. If you sell your home in the current real estate market, that means you will also be able to buy in this market.  With low prices and incredibly low interest rates, you can get a terrific deal in the current market.  A low price on your new purchase and a great interest rate can more than make up for the lower price on the home you sell.
2. You can get more house for the money in today's market.  So you may be able buy more house now than you would've been able to afford a couple of years ago.
3. There are tons of distressed properties available right now that need a lot of work to make them livable. Buyers that are looking for a nice home in move-in condition don't have much to choose from. If your home is in good condition and you price it competitively, you can sell it quickly.  I've seen several of these homes end up with multiple offers, yes multiple offers in today's market.
4. When the federal government extended the tax credit for first-time home buyers, they added a credit for existing home owners. If you've lived in your home for at least 5 of the past 8 years, you may qualify for up to $6,500 income tax credit (contact me to find out if you qualify). Time is running out on this deal - you must have a sales contract by April 30th to qualify for the credit.
5. Retirement communities are struggling to reach capacity right now. Many of these communities are offering huge financial incentives to lure to residents. If you sell your home now, you can take advantage of these special offers.

If you are interested in learning about foreclosed properties, go to my foreclosure website at www.ForeclosuresOnTheNorthShore.com

This month I became the exclusive licensee in Highland Park for www.teardowns.com. If you or someone you know has a property that needs a major rehab or is a possible tear down candidate in Highland Park, please contact me. I can market these properties to our unique database of builders and remodellers that are looking for this type of property - and the best part is that you can save significantly on commission when you list your property with teardowns.com.

 

Thank you for reading!

Wind Turbine on Highland Park Home

I have been working 'round the clock lately and havne't had much time to post new articles.  I came across this recent Chicago Tribune article on-line and thought I would share it. 

Highland Park homeowner installs wind turbine on his roof
Lisa Black
July 28, 2009 
 
The wind turbine saves Doug Snower $10 to $15 monthly on electricity bills. (Photo by Andrew A. Nelles, Chicago Tribune / July 27, 2009)

Doug Snower's neighbors in Highland Park stared hard when the silver and blue wind turbine first appeared on his garage roof.

While it could pass for a kinetic sculpture, the shiny, spinning device he installed a few weeks ago has generated low-voltage electricity and a steady hum of conversation.

Unlike the monstrous bladed commercial turbines that have drawn controversy over their noise and environmental impact, Snower's gadget is a quiet and modest 600-watt affair, working alongside a solar panel to supply a bank of four batteries. He uses it to power his electric lawn mower, the family's laptops, phones, cameras and a small fridge.

Snower figures he saves about $10 to $15 monthly on electricity bills and is eligible for a 30 percent rebate on federal income taxes. But he intended the $5,000 investment as more of an educational tool for his teen daughters -- as well as for curious passersby.

"At least six neighbors have come to look," said Snower, an architectural photographer who plans to serve as a Midwest distributor for the turbine's Chinese supplier.

He and his wife, Shari, added on to their house two years ago with the greenest of intentions. They are still experimenting with a partial grass roof to conserve water, a wood-burning masonry fireplace for heating and a natural air ventilation system.

About a week after Snower installed his turbine, ComEd workers replaced a transformer across the street.

"I've got them running scared," he said with a megawatt smile.