Archive for April, 2011

Fantastic South Loop Condo For Rent

April 12, 2011

Fantastic South Loop Condo For Rent

1 E 8th Street #610, Chicago IL 60605
MLS# 07776306

Prime 2 bedroom, 2 bath in great South Loop location. Cherry, granite, stainless steel kitchen with 42” cabinets and under-mount sink. Hardwood floors in living, dining & kitchen. 2 ensuite baths. Balcony has small lake view. Northern exposure with skyline view from all rooms. Garage parking for additional $175/month. Storage for additional $25/month. Building has health club, restaurants & guest parking. Walk to Red, Blue & Green lines, Grant Park, college.

Learn more about 1 E 8th Street and other South Loop condos by visiting ChicagoCityHomes.com.

Chicago Real Estate Recovery Hindered By Appraisal Process

April 11, 2011

Here’s an intelligent solution to the problems caused by HVCC – House Values Code of Conduct.  This is the policy that has governed all Fannie Mae and Freddie Mac appraisals since May 1, 2009 in their efforts to “enhance the integrity of the home appraisal process”.  
 
Although we all agree that there were cases of fraud and collusion between lenders and appraisers, this new system has, in many cases, debilitated the housing recovery.   Essentially, HVCC, in it’s efforts to protect the consumer, prohibits any interaction between the lender and the consumer with the appraiser.  This legislation is especially bad for appraisers and the consumer, since appraisals are generally assigned through an AMC (Appraisal Management Company) which keeps a large portion of the appraisal fee, and assigns appraisals to appraisers who are often not familiar with neighborhoods and neighborhood values (what makes a one property more attractive in a particular neighborhood).  It has not been uncommon to have an appraiser from Elgin or Tinley Park conducting an appraisal for city condos.  Do they really understand how close it is to the el, or how far?  Can they understand the difference between areas in Old Town or the West Loop, or differences in elementary school districts?   
 
The Chicago Tribune is reporting that CoreLogic has data showing that the sales price of non foreclosed properties stayed relatively even from one year ago (a .37% decrease).  Factor in the foreclosed property sales, and that figure changes to a decrease of 10.4% from February 2010 to February 2011.  Rep. LaShawn Ford (D-Chicago), who is himself, a Chicago real estate broker, is proposing that foreclosed property be excluded as comparable sales in appraisals.  Since lending guidelines have become so restrictive, the appraisal is one more layer which is inhibiting a real estate recovery.  In areas that have been hard hit with distressed properties, it becomes increasingly difficult to stop the slide of values when appraisers can use foreclosed property sales as a basis of value for a traditional home sale or refinance. And not all foreclosed property sales are “equal”.  If allowed to use these sales as comparables, should there not be some difference between an owner occupied vs. investor purchase?  We support this idea to keep the playing field balanced.  Not all Chicago real estate sales are created equally, and to compare distressed properties to traditional sales is like comparing the exterior photos only of homes as the basis for value without looking inside to see the condition.
 
Here you can read the whole article.

Spring is sprung, the grass is ris. I wonders where the buyers is.

April 7, 2011

Although not quite the version of this poem must of us know, Realtors and sellers will be chanting this version this spring.  Most pundits will agree that it is a great time to purchase real estate, but buyers seem not to be in agreement.  The March Credit Suisse Survey Results below endorse our feelings about the spring market, that buyers are unwilling or unable to commit to real estate purchases.  Tightening lending criteria and a weak job market continues to put downward pressure on real estate sales both in number of transactions and price points.  My advice to any seller is if you are lucky enough to get an offer, you probably should take it! 
 
I had one past client ask if Lakeview was exempt from the bubble.  According to MRED (MLS) statistics, there has been about an 8% decrease in value from 2007 to 2010 average sale price of Lakeview condos, but a 49% decrease in the number of transactions.  I think that is the most telling figure.  What is selling, is the cream of the crop, and was at a much higher price point three years ago then the exact same unit is now.  So although the figures don’t look too much different (average sale price 2007 was $364,860 vs. average sale price 2010 was $340,048) if you look at what is selling at the average price now compared to what was selling at the average price then, the difference is substantial.  Cases in point:
 
2712 Lehman Court – built 2007
#3N sold for $545,000 on 9/10/2007 delivered as new construction
#3N resold for $460,000 on 11/10/2010, about 15% decrease. 
#2S, a similar unit at 2714 Lehman (same development) which was a resale (not delivered as new construction) sold for $525,00 on 8/11/2008.
 
2501 N Sheffield – built 2005
#3N sold for $525,000 on 6/9/2008
#2S sold for $465,000 on 3/17/2011
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