Karp Real Estate

North Shore Market Watch - Kenilworth and Lake Forest

This is my 5th posting in a series about the suburbs on the North Shore of Chicago.  Look at previous posts to see how the North Shore compares to the state of Illinois, the whole Chicago metropolitan area, and the city of Chicago.  So far, I've already posted statistics for Deerfield, Evanston, Glencoe and Highland Park.

Kenilworth

• The number of homes sold in Kenilworth increased from 33 sales in 2010 to 35 sales in 2011.  All of the sales were single family homes.
• Two of the 35 sales were shorts sales, and the rest were traditional sales.
• There is 12 months of inventory in Kenilworth, which means that it is still a buyers’ market with supply exceeding demand.  This is slightly higher than the North Shore average of 11+ months.
• There are 6 homes in pre-foreclosure in Kenilworth and one that is bank-owned.  This represents 0.9% of the total housing units (TNU) in Kenilworth.  There were 9 distressed properties in Kenilworth in July 2011, so this is an improvement.
• The median price increased from $1.34 million to $1.6 million. 

Kenilworth is a very small (and expensive) area of less than 900 homes.  All of the statistics for Kenilworth are based on a much smaller number of homes than the other communities, so it is not really appropriate to make direct comparisons.  Even though the median price increased in this community, I think it is too early to say that real estate values have really gone up. All of the other indicators suggest that Kenilworth is not completely out of the woods yet, though things are moving in the right direction.  The recent improvement in interest rates on jumbo loans will definitely help this market turn around.

Lake Forest

• Lake Forest sales decreased by 9% in 2011 versus 2010.  Single family home sales declined by 10 homes from 217 to 207, -4.6%.  Condo/townhome sales dropped by 24.2%, from 62 units in 2010 to 47 in 2011. 
• Almost 90% of the sales in 2011 were traditional sales.
• Inventory levels are still rather high, with more than 16 months of inventory for single family homes and 18 months for condos/townhomes.  This is much higher than the North Shore average of 11+ months for single family and 13+ months for condos/townhomes.
• Tax records show that there are 48 homes in pre-foreclosure and 15 bank-owned properties, for a total of 63 distressed properties.  This represents about 0.8% of total housing units (THU) in Lake Forest.  Last July there were 69 distressed properties in Lake Forest, according to the tax records.
• The median price of a single family home increased in Lake Forest by 3.7%, while the condo/townhome median price dropped by 23.2%.

The statistics for this community are mixed.  On the negative side, sales decreased versus year ago and inventory levels are high.  On the plus side, not a lot of distressed properties (though the numbers are about the same as 6 months ago) and the median price for single family homes has improved.  Overall, I think the turnaround for Lake Forest is slightly behind Highland Park.  I expect sales to increase in 2012 with prices declining and then possibly stabilizing toward the end 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.

 

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.

Neighborhood Watch and Lake Forest's Finest

I was showing some houses in Lake Forest this week, and had a run-in with the law! 

We had appointments to see three houses on the same block in Lake Forest.  All of the houses were vacant, and with all the snow on the street and in the driveways, we decided that it would be easier to just park in the driveway of one house, and walk to the other two.

As we were leaving the third house, three police cars pulled up to the house, and officers jumped out of the cars to approach us as we were leaving.  We were quite surprised, and asked if we had accidentally tripped an alarm or something.  Then they told us that they received a call from a neighbor about two people forcibly breaking in and entering the house! 

As the 4th police vehicle pulled up to the scene, I was explaining to the very nice officers that I am a Realtor and that we had appointments to see these three houses.  As it turned out, the third house does not have a for sale sign in front of it, so the neighbor that called to report us probably didn't know that the house was for sale.  The officers said that the neighbor knew that the house was vacant and was concerned when she saw us there.

So, kudos to the Lake Forest neighbor that is watching out for the property on her block.  And, kudos to the Lake Forest police who responded promptly!  Thankfully the policemen quickly realized that most burglars don't carry a clipboard with them as they are leaving the scene of the crime...

We were able to clear things up very quickly - business cards, property information sheets, and driver's license all were helpful in proving our innocence.  The lock box on the front door was helpful too.

Some sellers don't like to have a "for sale" sign in front of their home.  This story shows us one reason why you should have one!

Thanks for reading!

nsk

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!