Monday, November 10, 2008

Short Sales and foreclosures, can't deny it, they are here

In the past, I have been very leary of short sales and foreclosure listings that are for sale in the multiple listing service that I use in my day to day business. Unfortunately for our economy, and unfortunately for the banks and investors that provided financing for so many properties that are now for sale, it is a fact that many of these properties that I believed would never make it to a closing table, are now showing up as closed sales.
In the areas of Skokie, West Rogers Park, Lincolnwood, Evanston, and Edgewater, I am noticing that almost 1 out of every 3 properties that has gotten to the Pending, or attorney approval/Inspection stage of a sale have the terms short sale or bank owned somewhere in the remarks.
I am also noticing that many of these properties that close are closing at 50%-60% of the amount owed on a mortgage from the previous homeowner. Wondering where the 700 Billion dollars in the bailout is going? Spend a few minutes with me searching the MLS statistics, and you will feel real queezy about the way things are going.
What does that say to buyers who are looking to buy property right now? It says opportunity is knocking. You know the old saying, buy when there is blood in the streets, and sell when the trumpets are sounding. If you can buy now, buy now!!!!
You can easily search foreclosure and short sale property that is listed in the MLS at http://coldwellbankerleader.com , this is a free search.
If you want to be steered in the right direction of how to buy a foreclosure or short sale property, call me at 312-513-4490 or email me back at earl.ruthman@coldwellbanker.com

Tuesday, September 9, 2008

Fannie Mae and Freddie Mac Takeover, what does it mean?

So on Friday it was leaked that the government is taking over Freddie Mac and Fannie Mae. On Sunday it was official. Freddie Mac and Fannie Mae have now been taken over by the federal government. But what does it mean for the real estate market, mortgage interest rates, and the US economy.

First let's look at what it means for mortgage rates. I would expect that the government takeover will result in lower mortgage rates, possibly a full point lower. Why? Basically the Fed has been struggling to lower mortgage rates for the last year in an attempt to assist the troubled real estate market. The Fed has lowered prime rates several times in an attempt to pull down mortgage interest rates. In spite of this over the last 8 months mortgage interest rates have mostly risen. Now with full control of Freddie Mac and Fannie Mae (which provides insurance for most mortgages in the US) they will have much more control over the mortgage market and mortgage rates. As long as their objective stays the same, we can expect lower rates.

What does the takeover say about the current situation in the real estate market? This should have been obvious from all the events that preceded this but the takeover shows that the real estate market is in serious trouble. The federal government doesn't just take over large companies on a whim, especially an administration with a Republican president that believes strongly in free markets. This is not simply a government takeover. This is the largest takeover in US history. Basically the takeover happened because it was believed if nothing was done we were headed for economic catastrophe.

How is this going to effect the real estate market? Although the takeover is a bad sign about our current situation it should have a positive effect on the real estate markets moving forward. First lowering mortgage interest rates should be quite a boon for the real estate market. Lowering rates lowers the effective cost of a house. And historically lowering rates has a positive effect on real estate values.

Additionally, if the Fed is smart they will reduce some of the mortgage restrictions Freddie Mac and Fannie Mae have created in the last year. While I would not like to see the mortgage market return to the free-wheeling lending of a few years ago, some of the current rules are bizarrely restrictive. The lending environment typically works like a pendulum moving from one extreme to another. Currently lending restrictions are not just stricter than what we saw during the real estate boom a few years ago but they are more restrictive than anything we have seen in the last 15 - 20 years. Hopefully a federally controlled Fannie Mae and Freddie Mac can help return us to normal as far as lending restrictions.

Lastly the government takeover could put taxpayers in the lurch for billions in loan losses. In the short term the government is going to have to infuse money into Freddie Mac and Fannie Mae. They have been losing money for quite some time and that is not going to change overnight. The government will have to around 20 to 30 billion into Fannie Mae and Freddie Mac to get them back to financial solvency.

Does this mean the federal government is insane? It depends on how you look at the issue. While taking over Fannie Mae and Freddie Mac will be very costly for the government and taxpayers, allowing them to fail could have led the US economy into a depression. In a depression those that keep their jobs have to make up for all the lost tax revenues for the large number of people that lose their jobs. So taxpayers could have been in a lurch if the Feds had decided to stay on the sidelines. So in summary the federal government found itself in a tight spot and decided to bet that they can fix the real estate market. We will find out if they were correct over the next several months.

Thursday, July 10, 2008

Ben Stein says "Now Buy Real Estate"!

Posted on Thursday, July 3, 2008, 12:00AM
Now for some reassuring words. Of all of the columnists writing in this space, I suspect I am the oldest. This means I have seen the most economic fluctuations. This also means I am less terrified about them than younger heads.
Let me put this differently. I read recently in The Wall Street Journal that the stock market was at the time of that writing almost in " Bear Market Territory," which is to say, down roughly 20% or more from its high. This, said the author of the piece, shows that we are about to have very bad economic times. The author helpfully noted that the market has been down into "Bear Market Territory " some nine times since the mid-1960's. Without doubt, this author was trying to do his best, and to serve his readers.

But here's a relevant addendum: yes, the market may have fallen 20% or more nine times since then. But there have only been five recessions since then.
That is to say, the stock market predicts 10 out of five recessions. Not such a great record.

The truth is that while the economy is clearly slowing down we are not yet in a recession. There has so far not even been one quarter of negative economic growth, nor even a break-even quarter. We may well have one soon, but two in a row are required for the classic definition of a recession. And as I keep saying, if anyone can call anything a recession, the whole subject loses all intellectual or factual meaning. This too could happen-a real recession-but it has not happened yet.

There are still reasons for hope. Exports are phenomenally strong. Minerals and agriculture are strong. Medical is strong. The government sector is large and robust. Sadly, military must remain strong indefinitely.

The government is running an immense deficit, and this is stimulative. True, finance is in tatters, as is transportation, refining, and home building. These are large sectors. They may fall so much that they bring the economy into recession.

But think about this: somewhere out in the big wide world, there is voracious demand for minerals and commodities. That (along with speculation) explains their major price increases. It would be extremely rare for there to be a spectacular worldwide demand for commodities along with a serious fall in demand for other factors in an economy. That is, it would be rare for demand to be both rising and falling at the same time. It could happen, but it would be rare.

However, let's assume we do have a recession. I hope we don't, but we might. What do we do about it? What can we do about it? Just keep plugging along. Just keep buying broad indexes. Just keep a good chunk of liquid assets. None of us can control the economy. Thus, we just have to keep swimming in the roiled waters.

As we cling to our life jackets, please remember this: no recession lasts forever. I can well recall so many times in the past when every single headline in The Wall Street Journal was about some record growth of sales or profits. Then time passes and every single headline is about horrible news. Then time passes and there is mixed news, and then it's all good news again.

Economies go through cycles. But the long-term trend is up, and people who buy broad indexes when the news is bad, if they live long enough, live to be happy about it.
Besides, what alternative do you have? If you have money to invest, yes, keep some in cash. But cash loses its value in inflationary times. In fact, holding cash over long periods - beyond what you need for peace of mind - is a su refire way to make yourself unhappy. You will lose money on it over long periods as inflation nibbles at it.

The best bet usually is what has gone down the most, and that, for now, is real estate. I got a letter from a thoughtful reader saying he was going to wait until real estate had reached its all time low before he bought. But how will he know? And how rarely does he find a home he truly loves? Even when homebuyers buy at the top of the cycle, if they love their homes, and if they can hold on, they always end up delighted.

Yes, there will be news saying housing will not recover THIS TIME. But in fact, except in really depressed areas, housing recovers EVERY TIME and goes on to pass its prior record. The real story of real estate, as my brilliant money manager friend, Phil DeMuth, says, is of failing to buy, not of staying away successfully.

The plain fact is that you don't know when real estate will be at bottom until it's too late. If you see a home you love, buy it now if you plan to be in it a long time. And know that the headline writers want to whip you up and make you crazy about the economy. They sell fear. Stay calm and stay well to do.

Monday, June 30, 2008

are we on the road to real estate recovery?

On the path to a housing rebound
The pain that homeowners and homebuilders are feeling now is a sign that things are going to get better.
By Shawn Tully, editor at large
Last Updated: June 25, 2008: 9:08 AM EDT


Realty reality check

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NEW YORK (Fortune) -- The news that housing starts have fallen to their lowest level in 17 years sounds like one more reason to be depressed about the shrinking value of your home. In fact, it's an almost certain sign that the path to a housing recovery is finally in sight.

If prices are going to stabilize, let alone rebound, the United States needs to produce far more first-time home buyers than new houses. That's the only way to tame the glut of "For Sale" signs dotting front yards from the Inland Empire of California to the Gold Coast of Florida.

Builders constructed far more homes from 2002 until 2006 - the peak bubble years - than could possibly be absorbed by the normal growth in households.

As a result, the market is now swamped with one million new and existing homes for sale that aren't occupied, and hence need to sell quickly. That's a multiple of the figure in most downturns, and it testifies to the duration and girth of the bubble.

"For the recovery to begin, builders need to eliminate the standing inventory of finished, unoccupied new homes," says Mike Castleman, founder of Metrostudy, which assembles sales data on four million subdivisions across the U.S.

The massive overhang of unsold inventory has remained stubbornly high. Sure, builders cut back, but sales dropped just as quickly.

Now that excess supply is finally beginning to shrink. In April, the number of new homes for sale stood at 456,000 according to the U.S. Commerce Department, still a big number, but 93,000 below the mountainous figure a year ago.

The return of the first-time buyer
The key player in any recovery scenario is the first time buyer. The housing market operates with a pronounced laddering or ripple effect. When entry-level buyers flood the market, they not only stimulate production of new homes, they purchase existing homes. Those purchases, in turn, allow the sellers to move up to bigger houses.

But when the first-timers are absent, the entire buying chain gets frozen.

Today, newbies are coming back. Why? For the first time in years, entry-level homes are affordable. Builders have slashed prices, and what they're building tends to be far smaller than the McMansions of the boom, selling for far lower prices. KB Home's average selling price dropped to $248,0000 in its February quarter, versus $267,000 a year earlier. In 2006, KB's basic model in Victorville, Cal., a former boomtown east of Los Angeles, took up as much as 3,800 square feet and sold for $328,000. Today, its stripped down offering goes for $220,000, at less than half the size.

So the first time in a decade renters can carry the mortgage payments and taxes on a new house for what they're paying a landlord. Call it the New Affordability.

Here's how the numbers play out: Single-family housing starts are now running at fewer than 500,000 a year. The normal demand for housing, based on immigration and household formation, is around one million units.

We won't get back to that figure for a while because so many people rushed to buy homes during the boom.

But with first timers returning, sales should rise to almost 700,000 units by the end of next year, according to Bernard Markstein, senior economist for the National Association of Home Builders. That means sales will soon exceed new production by as much as 250,000 units a year.

That margin forms the foundation of the housing revival that comes in four steps.

Step 1: First, the return of first-time buyers will shrink the overhang of new houses for sale.

Step 2: Second, because so few new homes are being built, first-timers will start buying existing homes from owners who want to move up but have been trapped by the dearth of buyers. Their improved fortunes, though, come with a big caveat: The prices of new homes are now lower than comparably-sized existing homes. It's as if used cars are selling for more than new ones. That can't last. So move-up buyers are going to have to accept less than they had hoped to get for their current homes.

They'll get a big break as they trade up, however. Unless they bought at the height of the boom, they'll still sell at a profit. They can then use that equity to buy bigger homes at bargain prices. During the bubble, homebuilders started pushing up home sizes to 3,500 square feet or more. It's those behemoths that are selling for the steepest discounts today.

Step 3: Next, housing starts should start rising, probably next year. The increase, however, will be slow and gradual. For the next two years at least, homebuilders will compete ferociously with existing home sellers for customers.

Step 4: Eventually, the glut of existing homes will disappear as well. The excess of new-home buyers over new homes being built makes that inevitable. But the oversupply is so enormous that the healing process could take as much as three more years. Only then will prices in former bubble markets start rising again.

What could go wrong?
One event has the potential to slow or even derail the recovery: A sharp rise in interest rates. Right now, the first-timers are gorging on 6% loans guaranteed by the FHA. But rates may not stay there.

If they rise to 8% or higher because inflation rebounds, it would take a far bigger drop in prices to make new and existing homes affordable.

The New Affordability is now in place. But if rates rise, we'll have to establish a New New Affordability - at even lower prices.

First Published: June 24, 2008: 10:44 AM EDT

Tuesday, June 3, 2008

Home purchase's can fall apart at the last second, you need a realtor who is on their toes to see that everything comes to a finish.

Most buyers and sellers feel relieved when the negotiations are done and the purchase agreement has been signed by all parties. It's a milestone. But, you might want to hold off celebrating until the transaction closes.

Current market conditions have complicated the home sale industry. Lender requirements for mortgage qualification and the types of home loans available are changing daily. Before getting into contract to buy a home, make sure you double check with your lender or mortgage broker to confirm that the loan you were qualified for several weeks ago is still available.

For example, a week before closing, buyers who were purchasing their first home -- and who had been assured that their financing was in order -- were informed that their lender was no longer providing the type of loan they needed to complete the transaction.

These were well-qualified buyers who had enough cash for a 10 percent down payment and closing costs. They needed to borrow a first mortgage for 80 percent of the purchase price and a second mortgage for the remaining 10 percent. The lender who was providing the 10 percent second mortgage decided they would no longer provide 10 percent second loans to first-time buyers.

In a similar situation, buyers who had been approved for 80-10-10 financing were told by their lender at the last minute that their underwriting guidelines had changed. The lender would no longer provide a second mortgage for 10 percent of the purchase unless they were also providing the first mortgage.

A year ago, financing was readily available to just about anyone who wanted to buy a house. And, most of what sold appraised for the purchase price. It was rare to see a listing back on the market because the buyer couldn't get financing. If a deal fell apart, the most likely culprit was an irreconcilable difference over an inspection issue.

HOUSE HUNTING TIP: Due to the change in the credit markets, buyers are wise to include financing and appraisal contingencies in the purchase contract in addition to an inspection contingency. A contingency should give the buyers a period of time to satisfy the condition in question. If they act in good faith and attempt to satisfy the condition, but are unable to, they may have the right to withdraw from the contract without penalty, depending on how the contact is written.

When buyers find themselves in competition, it's tempting to waive contingencies. A year ago, many buyers felt comfortable waiving contingencies for financing and property appraisal. There was a loan product for everyone and appraisals weren't an issue.

This is no longer the case. Most lenders have stopped doing easy-qualifier, no-cash loans and pay-option mortgages, to name a few. Lenders have also tightened up on appraisals, credit score and verifiable income requirements.

Buyer's remorse is a more serious issue in a slow market where home prices are soft than it is in a market where prices are escalating. Sellers can help prevent buyer's remorse from sinking a deal by properly preparing their homes for sale. This includes pricing accurately for the current market so that the buyers don't feel they overpaid when they see the inspection reports.

Obtaining pre-sale home inspections will also help keep buyers from having second thoughts. The more buyers know about the condition of the property before they make an offer, the less chance they will back out due to inspections.

THE CLOSING: A soft market makes an offer that is made contingent on selling another property more risky. Even if your buyer has lined up a buyer for his house, if that deal falls apart so does yours.

Our agents at Coldwell Banker Leader Realty have the experience, know how, and support behind them to propel your transaction to a finish. Call us at 773-465-4200 or visit us on the internet at http://coldwellbankerleader.com to put our 30 plus years of experience in your corner.

Monday, May 12, 2008

Skokie, a first time buyer's dream

College Grads and First Time Home Buyers: Skokie Homes are For You!
Did you just Graduate? Or are you maybe a young, first time home buyer?

Well if you are, it’s not that difficult to find a good place to call home and still be frugal in the village of Skokie.

Many times when you’re looking for a new home, it’s hard to
1). Find a good location
2). Get a good price, and…
3). Locate a home you actually want to purchase!

Buying a new home can be very difficult, but only if you make it too hard on yourself. Condos are a great option for new home buyers and those who’ve recently entered the workforce, like College graduates. If you are looking for a serene location, that offers great schools, entertainment and easy access to Chicago’s nightlife, then Skokie, Illinois is a perfect place to call home.

When shopping for homes Skokie has been truly overlooked, as it has many options from condos to multiple family homes. The village has been a hotbed of new construcion as of late. If it is a condominium you are looking for, the village of Skokie is fertile ground for frugal home buyers. Buy now and you will buy in to an assett that only increases in value over time.

Skokie currently has more than 185 listings for condominiums with prices ranging from $150,000 to $300,000. Typical condominiums don’t always offer spacious interiors and suburban upscale living, especially not in a community like Skokie, but with the new conversion condos and new construction condominium offerings, the units are a steal.

For instance, a new construction building located right on Skokie Boulevard is listed at $297,000 with a candid view of the Skokie forest perserves wooded area, features an in-unit washer and dryer, all new appliances, and some high-end amenities that you have to see to believe. If you were to look for a luxury home in Chicago, with a spectacular view and like amenities you’d pay well over $400k.

These kinds of homes are perfect for small families, entreprenuers, and new home buyers looking for affordable housing.
To easily search buying opportunities in skokie, call us at 773-465-4200 or visit us at http://coldwellbankerleader.com

Saturday, May 10, 2008

I wish I were a buyer in Skokie today.....

Buyer's, take note! 7649 N. Kostner, a brand new construction 4 bedroom up 3.5 bath home with stunning Chef's grade kitchen opening to great room with fireplace, huge living room and party sized dining room, master suite with spa quality bath and massive walk in closet, sharply finished basement with lots of living space, and large yard with deck and 2.5 car garage all situated across from beautiful park with kids playground and tennis court is now priced at $798,500. That is almost a 20% discount from the builders original asking price. See the home at http://7649kostner.com , or call us directly at 773-465-4200 for a private showing. While you are in the neighborhood, check out Skokie's festival of cultures on Saturday and Sunday May 17th and 18th and see why Skokie is one of the North Shores family friendly (and affordable) suburbs. There are so many exceptional values in Skokie, why not start your search at http://coldwellbankerleader right now!!!

Thursday, March 27, 2008

Evanston, huge new construction is 33% cheaper!

Coldwell Banker Leader Realty announces it will be offering the exciting new loft project with never before seen space options and pricing packages. "This project is priced at $200.00 per square foot, our competition is priced at $300.00 per square foot and up." "If you are a buyer who has been waiting for a price reason to buy, this is the reason" says Lonny Porter, Developer of the 2100 Greenwood lofts. We have priced this project at a place where buyers can be fearless in making a buying decision. We are 33% less expensive than other Evanston new construction projects. To see the floor plan, Please call Earl Ruthman, Broker, Coldwell Banker Leader Realty. The space, price and amenities will excite even the most weary of home seekers.

This summer and early Fall the 27 new lofts will be ready for delivery in Evanston. The development, 2100 Greenwood, is being constructed in what once was the Main Steel building, which dates back to the 1950s. The loft renovation process involved preserving much of the original building design and also incorporates a lot of green elements in that material was recycled and reused for construction. There is plenty of exposed brick and steel, giving the lofts a classic, traditional look while still showcasing plenty of luxury finishes.
The lofts at 2100 Greenwood will range in size from 980 to 2,700 square feet with prices starting at $335,000. The condos, depending on what floor they sit, either have private patios, Juliet balconies or recessed terraces. A few even have both terraces and patios. A portion of the condos have dramatic, 20 foot ceilings and are also handicap accessible for those with disabilities. All come with one indoor heated parking space for your automobile.
Other interior details include a top of the line stainless steel appliance package for the kitchen, granite counter tops, kitchen island, and hardwood flooring. Buyers get a choice of select cabinet finishes and colors, tile and flooring. The development features a beautifully landscaped courtyard with brick paths, lighting and a building lobby with secure entrance.
2100 Greenwood is sure to be a popular choice for buyers in the market for a home in the suburbs, and the units there are comparable to many of the luxury condominium projects in Evanston and the city of Chicago neighborhoods such as Lakeview and Lincoln Park. Just look, we have taken the fear out of your purchase.

Wednesday, March 12, 2008

FHA loan limits increased! you can buy!

Great news for 1st time buyers, there are new increased loan limits for FHA purchases! You can buy a 2 or 3 flat building with minimal downpayment, you can buy with less than perfect credit, you can take advantage of the huge selection of available homes and very attractive financing packages that are available.

to look at the attractive selection of available area property go to http://coldwellbankerleader.com

to look at all the available financing packages, check out
http://www.yourillinoishome.com/financing/mortgageprograms.htm

Sunday, March 2, 2008

Short Sale, Fact or fiction?

Everyone dreams about a bargain. In the real estate industry, handyman's specials, relocation sales, and yes, even foreclosure sales have been used as headlines by realtors to attract buyers in search of a property they can purchase at below market value. Nowadays, the new buzzword seems to be "short sale". I have been a real estate broker for 20 years now, and this term really has me shaking my head. My take on the process is something like this......
Realtor R approaches a seller who is having some financial challenges, and notes that the seller owes $400,000.00 on his mortgage. Realtor R feels that in today's market, the sellers home needs to be priced at $350,000 in order to be sellable in the current scheme of things. Realtor R advises the seller to list his property for $350,000, and Realtor R will negotiate with the mortgage holder (the bank) when a contract is written to accept less than is owed on the property so that the bank doesn't have to go through the process of foreclosing on the mortgage with the seller. Realtor R is negotiating a lower price for the buyer, he is letting the world know that the seller is having financial troubles, and he is asking the bank to take a loss on the mortgage that is owed, and at the same time asking the bank to also let him take his commission from the lowered procedes. Realtor R also says he is doing this to help save the sellers credit, even though the seller will have no equity from the closing. Sounds like a nice arrangement for Realtor R, and the purchaser, while the bank accepts a loss and allows for a commission, and the seller walks away from the closing with nothing.
I have been following listings that have been termed "short sales" in the multiple listing service of northern Illinois in Skokie, Lincolnwood, and West Rogers park for the past year, and what I have found is not surprising. There are currently 74 listings in these areas active in the multiple listing service with the term "short sale" in the remarks, and there have only been 3 properties that have actually closed. Not very good ratios of list to close.
What does this indicate you ask buyer's who are looking for a bargain? What this indicates to me is that if you see the term short sale in the remarks of a listing you are trying to purchase, the chances of you actually owning that property are somewhere between slim and none.
There are so many well priced properties on the market right now that can actually be bought. Why waste time and energy looking at the "short sale" pipe dream.
Go to http://coldwellbankerleader.com , and search our database of listings. Our sellers want their property sold!!!!

Tuesday, February 26, 2008

Skokie, what makes it the North Shores Best....

Skokie's proximity to the city, public transportation, highly rated school system, abundance beautiful parks, magnificent Library, and harmonious ethnic diversity is often pointed to when discussing villages with the highest quality of life. Now we can confirm what we already have known by clicking here.........

http://citytowninfo.com/places/illinois/skokie

To see all listings in Skokie, Lincolnwood, Morton grove and the surrounding suburbs, visit us at http://coldwellbankerleader.com , search quickly, easily, and anonomously.

thanks so much!

Monday, February 18, 2008

New signs of life in Skokie and West Rogers Park

Even though it is 7 degrees outside, and we are seeing a new coat of snow on a daily basis, the Skokie and West Rogers Park real estate market is showing signs of a wake up! In January and February of 2008 we have had a number of listings in Skokie and West Rogers Park go under contract the first week they have been put on the market. Does this mean we are back to the days of multiple offers? No. Does this mean buyer's are realizing that with interest rates at historic lows and prices of existing area homes recalibrated for the year 2008 that the time is right to acquire an area home that you can be proud of, and optimistic about it as a smart investment? I would say yes! There are so many opportunities for buyer's to own property that was out of their reach just 2 years ago available today. See for yourself. Go to http://coldwellbankerleader.com and see what you can own. You will be pleased at what you will find. It's a New year and new market, buyer's, what are you waiting for?

Saturday, February 9, 2008

Shoveling out, and buyer's are coming back to the market.

How to make your uncle and brother in law very jealous............

Now that we are past the Holiday season and heading into the sweet (snowy) part of winter, I am noticing many more buyers actually looking (not just on a website, actually walking through) at our company's listing inventory. Furthermore, we have actually seen a number of our listings go under contract in the month of January and early part of February. Is this due to mortgage reductions? Is this due to buyers believing the housing market pricing has levelled off? Is this Due to pent up demand, or is this due to a real spring real estate market on the horizon? All of these are playing a part, and quite frankly, who cares what the answer is, we are delighted to see buyers actually make an offer, and sellers acknowledging those offers with acceptance!

In the past, one of my fears as a realtor was always during the attorney approval period, that a buyer's uncle, brother in law or friend would point out how much cheaper he or she purchased their house in the same neighborhood just one or 2 years prior. This would make the buyers feel like they were making a mistake, and buyers remorse would set in. Today, what is that uncle or brother in law to say? " hey buyer, don't you know I purchased my property 2 years ago for much more money than you are paying today? How could you dare buy for so much less than I did..............

Come on prospective buyers, want to make your uncle or brother in law jealous? Buy some property today!

Saturday, January 26, 2008

Warm up with the kids at the Skokie exploratorium

Last Saturday afternoon, I was left with the challenge of entertaining a 3 year old while the temperature outside was a frosty 8 degrees. We thought about sledding, but it was just too cold, we thought about heading off to the library, but that was just too low action. We needed to burn some energy. Off we went to what I think is one of not only Skokie's best kid attractions, but one of the best on the whole North Shore, the Skokie exploratorium. If you want to experience a great afternoon with your toddler's and pre-schoolers, check out this link. http://gocitykids.parentsconnect.com/browse/attraction.jsp?id=133861&area=196 .
As a realtor who has sold over a hundred homes in the area in the past 2 decades, this is one of the many advantages life in Skokie offers that I encourage potential area home buyers and new residents to check out. To check out our Skokie area listings, enjoy the home search feature on our website, the opportunities to buy will put a smile on your face!

Monday, January 14, 2008

Stable Existing-Home Sales Expected in Early 2008, then Gradual Rise

Stable Existing-Home Sales Expected in Early 2008, then Gradual Rise
WASHINGTON, January 08, 2008 -
Over the next few months, existing-home sales are expected to hold fairly steady as indicated by pending sales activity, then rise later in the year and continue to improve in 2009, according to the latest forecast by the National Association of Realtors®.
Lawrence Yun, NAR chief economist, said there is a pull and tug exerting itself on the market. “On the one hand, we have a pent-up demand from the four million jobs added to our economy over the past two years of sales decline,” he said. “On the other, consumers continue to wait for additional signs of market stabilization. There are more people with financial capacity now than in 2005, but many are trying to market-time their purchase. As a result, the exact timing and the strength of a home sales recovery is a bit uncertain. A meaningful recovery in existing-home sales could occur as early as this spring, or it may be further delayed toward late 2008.”
The Pending Home Sales Index,* a forward-looking indicator based on contracts signed in November, fell 2.6 percent to a reading of 87.6 from a strong upward revision of 89.9 in October, but remains above the August and September readings and indicates a broad stabilization. The index was 19.2 percent below the November 2006 level of 108.4. “Although there could be some minor slippage in the first quarter, existing-home sales should hold in a narrow range before trending up,” Yun said.
The PHSI in the South rose 2.3 percent in November to 100.7 but is 19.8 percent below a year ago. In the West, the index slipped 2.1 percent to 86.6 but is 18.5 percent lower than November 2006. The index in the Midwest fell 4.1 percent in November to 82.1 and is 18.6 percent below a year ago. In the Northeast, the index dropped 13.0 percent in November to 70.1 from a spike in October, and is 19.1 percent below November 2006.
Existing-home sales for 2007 will probably total 5.66 million, the fifth highest on record, then edge up to 5.70 million this year and 5.91 million in 2009, compared with 6.48 million in 2006. Existing-home prices for 2007 are likely to be down 1.9 percent to a median of $217,600, hold even this year and then rise 3.1 percent in 2009 to $224,400.
“Rising home prices in the affordable midsection of the country are likely to offset declines in some of the previously hot markets,” Yun said.
There are wide variations in housing market conditions around the country, with nearly two-thirds of the metropolitan areas showing price gains. Healthy increases in metro prices are occurring in places such as Pittsburgh; Beaumont-Port Arthur, Texas; San Jose, Calif.; and Bismarck, N.D.
“Our consumer survey shows buyers today are in it for the long-haul, planning to stay in their home for a median of 10 years. This is a wise approach to housing because the data shows the longer you own, the better your investment,” Yun said.
New-home sales are projected at 773,000 for 2007, and declining to 669,000 this year before rising to 730,000 in 2009, but well below the 1.05 million 2006. With an appropriate slowdown in production, housing starts, including multifamily units, are forecast at 1.36 million for 2007 and 1.09 million this year before edging up to 1.10 million in 2009; starts totaled 1.80 million in 2006. The median new-home price should drop 2.1 percent to $241,400 for 2007, and then rise 0.4 percent to $242,200 this year and gain another 5.9 percent in 2009.
“Some policy changes, such as raising the loan limit on conventional mortgages, would provide a significant boost to home sales, increase liquidity, strengthen home prices and lessen foreclosures, but it is unclear as to if and when the measure will be implemented,” Yun said. NAR strongly supports raising the Government-Sponsored Enterprise loan limit to at least $625,000 from the current $417,000 so that more consumers will have access to lower interest rates on safe conforming mortgages. “NAR estimates that raising the GSE loan limit will result in interest rates savings for an additional 330,000 homeowners,” he said.
NAR also encourages the Fed to make a single lump-sum cut in the Fed funds rate to 3.5 percent at the January Federal Open Market Committee meeting, rather than a series of modest cuts throughout the year. “Consumers are also looking to market-time interest rates, and the expectations of further rate cuts are pushing some home buyers to delay. Monetary policy will be much more effective with a one-time large cut, rather than a series of small cuts,” Yun added.
The 30-year fixed-rate mortgage is expected to rise slowly to the 6.3 percent range by the end of this year, but an additional cut in the Fed funds rate would lower short-term interest rates.
Growth in the U.S. gross domestic product (GDP) is seen at 2.1 percent in 2007, below the 2.9 percent growth rate in 2006; GDP growth will probably be 2.0 percent this year.
After averaging 4.6 percent for both 2006 and 2007, the unemployment rate is estimated to rise to 5.3 percent in the second half of 2008. Inflation, as measured by the Consumer Price Index, is projected at 2.9 percent for 2007 and 3.1 percent this year; it was 3.2 percent in 2006. Inflation-adjusted disposable personal income is forecast to grow 3.1 percent for 2007, the same as in 2006, and then grow 1.6 percent this year.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.
# # #
*The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.
The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.
An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.
Existing-home sales for December will be released January 24; the next Forecast / Pending Home Sales Index will be released February 7.

Saturday, January 5, 2008

Happier New Year? In all likelihood 2008 will be

Happier New Year? In all likelihood 2008 will be
Kenneth R. Harney, Washington Post Writers Group
December 30, 2007
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WASHINGTON - Queen Elizabeth II once famously referred to her "annus horribilis," a year in which almost everything went wrong, from family scandals to a fire that destroyed parts of Windsor Castle.The American housing market experienced its own annus horribilis in 2007, a year when all the sins and excesses of the prior six were visited upon nearly everyone in the system:*Homeowners lost $160 billion in net equity in their homes from the first quarter of 2007 through the third, according to the latest "flow of funds" data from the Federal Reserve. Homeowners' equity stakes, their property value less their mortgage balances, dropped to 50.4 percent, from 56.1 percent as recently as 2002.
Both numbers could be worse in the Fed's fourth-quarter survey.*Foreclosures on single-family homes hit 1.69 percent in the third quarter, the worst in decades, and 5.6 percent of all home mortgages in the country were delinquent by 30 days or more.One out of five subprime adjustable-rate loans nationwide was delinquent by the end of the third quarter, and the proportion was higher in a handful of states: 26.2 percent in Michigan and nearly 23 percent in Massachusetts.*Home sales tanked in almost every local market that had seen hyperinflation in prices in the boom years of 2001 to 2005. Local declines in excess of 50 percent year-to-year are not unusual in parts of California, Florida, Nevada and Arizona.In many of the same markets the sales booms had been propelled by speculative investors looking for quick payoffs. Now one-quarter of new foreclosures in California, Arizona and Nevada involve flippers sending back the keys.* The national inventory of unsold houses jumped to 10.8 months, a level that even the most optimistic economists concede is a drag on the overall market.*Job losses in housing and mortgage-related industries have been staggering, into the hundreds of thousands by some estimates, and extend to the highest executive ranks of Wall Street's and banking's most prominent firms. When you lose billions on dumb bets on subprime mortgage securities, you can also lose your head.Everybody knows these tales of woe -- and more. It's been a lousy year. Could 2008 be better?I think the odds are reasonable that it will. Here's why: Through the grimmest headlines of 2007, a number of positive underlying economic forces kept real estate from being a true bust. If those forces continue, they should help cut the time needed for the correction cycle to bottom out and the inevitable recovery to begin.Take mortgage rates. Had the cost of money been significantly higher in 2006 and 2007, delinquencies and foreclosures stemming from the toxic mixes of subprime loans would have been much worse.But the 30-year fixed rates that hovered in the low 6 percent range for much of the year -- even in the high 5s for a couple of weeks -- allowed many borrowers to refinance into alternatives such as FHA or conventional Fannie Mae/Freddie Mac loans. The recently announced national loan modification and rate-freeze should keep at least some struggling subprime borrowers out of foreclosure.Steady, moderate national growth of jobs, economic expansion and low inflation also helped the housing market in 2007 and could continue to do so. By the way, despite all the scary statistics, sales of existing and new homes in 2007 totaled an estimated 6.5 million, which would make it the fifth-largest sales year in American real estate history.Another fact that often got lost in the bad news in 2007 and offers reason for hope: Vast swaths of the country never experienced the excesses of the boom years and have not endured the pains of the crunch in the most volatile markets.The latest federal quarterly home-price data from the Office of Housing Enterprise Oversight found that while significant declines have occurred in dozens of speculative markets, prices were flat or up in 204 of the 287 metro areas surveyed.At some point in every correction cycle, even in the most depressed markets, consumer psychology begins to change. People who need or want houses look around, see lower prices, affordable financing and say: Hey, this is a smart time to buy. The cycle has done its work.It won't be everywhere, but that psychology should begin taking hold in a growing number of markets in 2008.