Home sales
The Illinois Association of Realtors recently released data showing that Illinois home sales and prices appear to be stabilizing, with ongoing growth in year-to-year median prices, and 10 straight months of primarily double-digit sales increases.
According to the IAR report, compiled from a survey of Multiple Listing Service sales reported by 37 participating Illinois REALTOR® local boards and associations, the Chicago region did even better, marking a year of month-over-month sales improvements as of June 2010. The statistics show that statewide sales of single-family homes and condominiums were up 18.3 percent in June, totaling 13,072 homes sold compared to June 2009 sales of 11,048 homes. The median price was $170,000, up 2.5 percent from $165,825 in June 2009.
"The tax credit has proved to be a boost to the Illinois housing market with a tremendous level of buying and selling activity for the last 10 months which, importantly, has helped to stabilize home prices statewide," said IAR president Mike Onorato. "As the stimulus winds down, job growth and improved consumer and business confidence will be required to keep on a path toward recovery. People need stable job prospects to feel secure (enough to buy a condo or house)."
In the Chicagoland Primary Metropolitan Statistical Area (PMSA), which includes Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will counties, year-over-year home sales grew for 12 consecutive months, up 27.2 percent to 9,085 single-family homes and condominiums sold in June 2010 compared to 7,140 homes sold in June 2009. However, the median sale price for the Chicagoland PMSA was $207,500 in June 2010, down 1.2 percent from June 2009.
Dr. Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory of the University of Illinois, noted that "sales are forecast to remain positive in double digits in both markets through September. Once again price changes remain more stubborn with some slight upward movement in Illinois in July and August followed by little or no change in September; in the Chicago region, the changes continue to trend down in the 1 to 5 percent range."
In Chicago, June total home sales (single-family and condominiums) were up 27.5 percent to 2,526 sales compared to 1,981 homes sold in June 2009, the 10th consecutive month of year-over-year sales gains. The city’s median price in June 2010 was $234,250, down 3.2 percent from June 2009.
Noting the 41 percent the number of units sold in Chicago during the first six months of 2010, compared to the same period last year, Genie Birch, president of the Chicago Association of REALTORS®, said "We believe this is a positive indicator that Chicago’s housing market is stabilizing. Motivated buyers and sellers are working toward realistically closing deals at current market values."
According to the IAR report, total home sales comparing June 2010 to June 2009 were up in 47 of 102 Illinois counties reporting, with 38 of 102 counties posting median price increases.
Condo Foreclosures
According to information compiled by the Woodstock Institute, condo foreclosure filings within the city of Chicago rose 37.5 percent during the first half of 2010, but if suburban condo foreclosures included, particularly in hard-hit northwestern Cook County, regional condo foreclosures have swelled 53.8 percent compared with 2009's first half, the Woodstock Institute study found.
Although a plethora of foreclosed condos can be detrimental to the complex they are located in, they are usually not visible from the outside, so they don’t have the immediate effect on local property values. This makes them unlike foreclosed, and boarded-up single-family homes, which are very visible in many neighborhoods, and have a detrimental effect on surrounding property values.
Also, observers have noted that many of the condo properties going into foreclosure were bought by developers, rather than individual homeowners. Many developers bought four or more apartments ir condos, with the intention of converting them to condos, or just fixing them up and selling them . But then the housing bubble burst and they were unable to sell them for a price that give them a return on their investment.
In any case, the high number of condo foreclosures is bringing the average price of property down, so it is a good time to buy a condo. And don’t be afraid of buying a foreclosed condo either, they are often in very good shape, and many banks are willing to make deals and negotiate the price.
Many homeowners considering moving have put off selling condos until they see the real estate prices going up, and that is bound to happen sooner rather than later. But there are plenty who are selling, and it is wise to remember that while there are deals available, few people are willing to just "give away" their property for a rock-bottom price. So if you are in the market to buy, don’t wait too long, expecting the prices to keep decreasing down to nothing. If you like a particular property, whether it is a foreclosed condo or not, and the price is affordable, you may as well go ahead and buy it. Because it won’t be there forever, and the price could go up.
Eco-friendly condos
The idea of “going green,” or having an eco-friendly condo or house is becoming increasingly popular these days, and people who would like to get on the bandwagon need not be afraid of it costing too much money.
Sure, there are expensive options, such as adding solar panels. They do conserve energy and may pay off down the line at some point, depending how long you stay in the house. But there are simpler, less expensive ways to "live green," and give back to the environment.
For instance, using compact florescent light bulbs rather than the more common incandescent light bulbs is a good start. The florescent bulbs use 75 percent less energy, and last much longer too, so the higher price is well worth it. Of course, just turning off lights when you leave a room, is a help too. Many people don’t realize that unplugging things like TVs, toasters, and other items cuts down on usage too, because if they are plugged in, they draw electricity whether they are turned on or not.
Buying energy-efficient appliances when you buy your condo is also helpful, and all the major companies are touting them so the prices are not too steep either. They will save you money, and conserve water and energy in your eco-friendly condo too. Planting a garden, even a small one for flowers, or better yet—herbs, spices and vegetables on your patio or balcony, will also benefit the environment, and your diet. Besides brightening up a home, plants give off oxygen and consume carbon dioxide so they benefit the environment. You would be surprised how little space you need to grow tomatoes and other types of vegetables. For instance, tomatoes can even be grown upside down now too, with the pots hanging from the ceiling.
Recycling is another good, cost-free activity too. If your community does not provide homes with recycling containers to deposit paper, plastic, aluminum and other items, most if not all communities at least have drop-off points for recyclables. Perhaps at a condo board meeting, you can lobby your fellow residents and encourage them to join you in your efforts. You might all be able to band together and multiply your efforts. For big issues that would affect the whole complex, such as using the fluorescent bulbs in the hallways or regulating the amount of water used on the landscaping, you can bring your requests the management company. That way, you can be sure to have an eco-friendly condo development.
Owning vs. Renting
There are pros and cons of owning vs. renting condos, but many people agree that in the end, owning a condo is more beneficial, mainly because you are building up equity rather than just turning over money to a landlord.
But depending on your circumstances, renting a condo or apartment can be the right way to go too. For instance, people who are new to an area, having just relocated for a job, might favor renting because they are not sure how long they will be there or they haven’t determined which neighborhood they want to settle down in.
Also, you might just happen upon an apartment or condo for rent that has all the space and amenities you are looking for, perhaps a pool, fitness center, and a great location to boot, and decide you would rather rent than buy. Some people who have made comparisons contend that apartments in downtown Chicago and other popular areas are much roomier than the condos available for sale in the same areas. In other cities, such as New York, co-ops, in which people buy shares in a building rather than the individual unit they live in, are another popular option.
The one thing that often holds many people back from owning vs. renting a home of any kind is the need to come up with a substantial down payment. Most people can come up with the monthly rent, or mortgage payment, but even a 10 percent down payment is very difficult for a lot of prospective buyers. The days of buying a home without putting down any down payment may be gone now, following the national financial crisis, and plethora of foreclosures in recent years.
But even if you don’t initially have enough money for a down payment, and still want a there is no need to lose hope that you will never own your own home. There are many rent-to-own condos available, which allow the renter to put some of his or her rent toward a down payment. The rent-to-own agreement usually lasts a year or even two, depending on what the parties decide. They can then revisit the situation at the end of the set time period, and perhaps take out a mortgage agreement. That usually gives the renter enough time to get his or her financial situation enough to qualify for a mortgage.
Because there are so many different situations, there will always be people who prefer owning vs. renting, or visa-versa, and it is good that there are options available to suit every need.
What Does “REO” Mean?
REO stands for Real Estate Owned. In the current real estate market, banks and lending institutions have had to take back thousands of properties in the foreclosure process. Bankers are now finding themselves in the real estate business instead of the lending business. Whole new departments are springing up inside of a bank’s organization. A few years ago, most people had probably never heard of a short sale department or loss mitigation. Now they are commonplace.
How Do I Buy an REO property?
Most banks and lenders work with real estate companies to sell off their real estate inventory. Additionally you buy Fannie Mae foreclosed properties through real estate agents. You can contact any real estate agent that has access to the multiple listing service, including an agent right here at OwnACondo.com.
What Do I Need To Know?
Keep in mind that when you are buying an REO property that you are buying a property that might not have been lived in for quite a few months. Be sure to have a thorough property inspection done during your inspection period. Just because an REO property is cheap does not mean that it is a good deal. Make sure that you have the money to fix the essentials, if in fact there are any fixups needed.
Most REO condos and homes are typically non-negotiable in terms of getting the bank to fix, update or upgrade the property. What you see is what you get. If you don’t like something then the advice is do not try to buy it.
Buying an REO Home Can Save You Money
Buying an REO property can save you a lot of money. Typically the bank wants to sell it quickly and is more likely to price it more aggressively in the market. You may even be able to negotiate with the bank to pay all of your closing costs. Any knowledgeable real estate agent would know how to structure a real estate purchase contract to negotiate for paying your closing costs.
Do I Need to Use a Real Estate Agent to Buy an REO property?
There is no law that says that you need to use a licensed real estate agent to buy a property. You can represent yourself in the transaction if you like.
However, a good Realtor® can save you a lot of time and money navigating the sometime frustrating real estate waters. Call upon any of the condo specialist Realtors® at OwnACondo.com for a personal consultation
Looking for condos
Looking for condos at any time of the year is very tempting, but especially so in the summer months, in part because the pools, fitness centers and other upscale amenities that many condos offer are particulalrly inviting at this time of year.
As a general rule, home sales increase in the summer months, often because people with school-age children want to get settled in their new home before the new school year starts in September. But whether you have children or not, in many parts of the country, it is easier to move during the warm summer months than during the frigid winter. Plus, if you play your cards right and get lucky, you can get settled in before the winter sets in, and interest rates go up. While the economy is still recovering and not quite healthy, interest rates are remaining low for now, which should bode well for the real estate industry.
But speaking from a personal perspective, I know that even more than interest rates, the prospect of having to mow the lawn on a corner lot for another year has caused me to think seriously about moving to a condo, where the outdoor work is handled by a professional landscaper and I will have my weekends to myself. The monthly assessment would be well worth it. Judging by the number of people who have come to the open houses I have attended, a lot of similarly middle-aged people have the same idea about looking for condos.
Another good thing about condos and townhomes, is they come in a wide variety of styles and prices—and places too, so there is something suitable for everyone, no matter what they can afford or where they want to live geographically.
In short, searching for condos can be an adventure and a fun activity at any time of the year, even if you have not decided that you definitely want to buy one. You can keep your options open and just have a look at what is available, and perhaps pick up ideas for decorating your own home. If you are doing more than just looking, and are serious about buying, it is best to contact a professional Realtor®, because he or she can cut through a lot of red tape and find the ideal place for you.
There is also no need to be frightened off by the term "luxury condos," thinking the price might be unaffordable. You never know, they might have all the luxurious bells and whistles, but with a price that isn’t astronomical. Even if it is, you can find something out there that won’t put you in the poorhouse. get a lot of "bang for the buck." So relax and enjoy yourself, looking for condos.
Short sales
Since the downturn in the economy occurred, many cash-strapped homeowners have been having trouble paying their mortgages. Many who find they owe more than their property is worth have been turning to what are called "short sales" as an alternative to foreclosure. People in the market to buy condos or other homes can get great deals if they are lucky enough to find a condo they like that is being sold that way.
"Short sales" are sales in which properties are sold for less than what they are actually worth. Anyone who wants to sell a home that way must show proof of financial hardship and get permission from the mortgage holder to do so. The arrangement benefits the seller, because the only alternative would likely be foreclosure, which damages credit scores, and mortgage holders would rather get 80 percent of what the property is worth, and accept the loss. Otherwise, they would have to take possession of the property and maintain it before selling it, often for even less than it was worth. Having the property occupied rather than boarded up and abandoned, also helps the neighborhood stay strong and residents appreciate the bank’s efforts.
But buyers and sellers would be well-advised to work with an experienced Realtor to make the short sale process work to their advantage. This is because the process often takes longer than usual, and keeping on top of the progress, and in touch with your lender and attorney, is key to a successful outcome. Also, buyers should be aware that the initial list price for the "short sale" property is often lower than what would actually be accepted, but a Realtor could do research and advise them about what an acceptable offer would be.
Sellers are also advised to enlist experienced Realtors to properly market their property, showing it off to its best advantage in order to get the right price. A good attorney should be enlisted by sellers too, to make sure the short sale process goes smoothly.
As the old saying goes, "It’s an ill-wind that doesn’t blow anybody good," and while the need for short sales indicates a slow-down in the economy, they really can benefit all parties involved. The mortgage holder receives most of the money it is owed, and is able to clear its books, while the seller is able to get out from under an unaffordable mortgage without any credit score damage. And, of course, anyone buying a condo can get a great deal on a beautiful condo or house, often for more than 20 percent less than what it is actually worth.
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