Getting Real

Elmhurst Real Estate Market Continues Strong in 2013

Wed, 20 Mar 2013 20:39:32 +0000

People often ask me how things are in the Elmhurst Real Estate Market and my reply is generally “things are great”. So what does great look on paper? My partner, Gary Lucido, writes a blog about Chicago real estate. He’s the man if you want to know anything about anything, especially graphs and numbers. He recently posted on his Chicago Now Real Estate Blog that February home sales in Chicago once again turned in a strong performance relative to last year. He reported that for the 20th month in a row closings beat the previous year’s numbers.

While the Elmhurst market doesn’t boast such exciting increase, it also didn’t see the same dramatic downturn over the course of the last few years that Chicago saw. Below an historic sales graph back to 2007 is shown with a 12 month moving average. Notice that we are reaching new highs in the Elmhurst Real Estate Market. Last summers spike in sales started in June 2012 with units sold remaining strong even through the normally dismal January and February. As I mentioned in January when I reported 2012 Elmhurst home sales, it’s a pretty active market out there.

Increasing contract activity in the Elmhurst Real Estate Market and the resultant pending home sales continue to signal several more months of record setting closings. As you can see in the graph below February contract activity is level with last year but at nearly double where it was two years ago. One caveat to the chart is that it does not reflect the “decay factor” or the contracts that don’t close. A certain percentage of contracts never make it to closing. In Chicago, the decay factor is about 20%.

Distressed sales in Elmhurst, Illinois came in at only 20% and February is supposedly the peak time of the year for foreclosure sales. The Elmhurst Real Estate Market of course fares much better than Chicago as it relates to percentage of distressed property sales where it’s currently at 45%.

The graph below shows Elmhurst home inventory over the last 5 years courtesy of MRED. From a peak of around 16 months of supply it has now fallen to under a 5 months supply which is less than one third of its peak. Folks, we are in a seller’s market; properties that are well priced going under contract in a day with multiple offers.

Elmhurst Real Estate Market in 2012

Tue, 15 Jan 2013 19:34:23 +0000

2012 was a good year for real estate in Elmhurst. Single family home sales volume was up by from $154mm to just over $158mm in 2012. While the average sales price decreased marginally from $404k to $402k the number of units sold increased over 15% from 382 units in 2011 to 446 in 2012.

In both 2011 and 2012 there were 68 homes sold under distressed conditions (short sale, foreclosure or court ordered) but because of the increase in units sold in 2012 the percentage of distressed sales decreased from 18% in 2011 to 15% in 2012.

Single Family Home Inventory in 2012 was at the lowest levels in the last several years with just around a 4 months supply of single family homes in Elmhurst on the market at the close of the year.

The condo and townhome market also showed improvement with volume going from just over $11mm to $13.5mm with the average price increasing from $225k to $228k. There were 50 units sold in 2011 and 58 in 2012. During both years, distressed sales comprised about 14% of the total sales.

2013 promises to be a busy market for both buyers and sellers. Buyers of well priced/condition properties should expect competition and be ready to pay near or at list price. This doesn’t mean that deals don’t exist however, but buyers will need to be well informed and decisive. There are currently 58 condos and townhomes on the market and 160 single family homes for sale in Elmhurst.

Lucid Realty Launches 100% Commission Rebate Program For Home Buyers In The Chicago Area

Mon, 02 Apr 2012 15:12:46 +0000

Chicago, IL (PRWEB) April 02, 2012

Today Lucid Realty announced the launch of their 100% real estate commission rebate program for home buyers in the Chicago real estate market. Designed to offer unprecedented choices for consumers to maximize their savings in purchasing a home, this new program allows home buyers to optionally pay an hourly rate to Lucid Realty for assisting in the purchase of a home in exchange for a 100% commission rebate at closing. The full commission, which is paid by the home seller, is given to the home buyer in the form of a closing credit or a check.

The 100% commission rebate plan is the logical extension of Lucid Realty’s normal real estate commission rebate, which is paid on a sliding scale – a higher percentage for more expensive homes. The new plan will be more attractive for consumers who are buying more expensive homes or who feel that they don’t need as much attention.

“This 100% rebate plan solves two long standing problems in real estate,” said Gary Lucido, President of Lucid Realty. “First, clients who require little assistance in buying a home are basically paying for clients who require more assistance. Second, real estate agents can spend a considerable amount of time engaged in low value activities, earning very little on an hourly basis. Home buyers who opt into this new plan will have an incentive to use their agent more effectively. It should be a win-win situation.”

Gary also pointed out that Lucid Realty did not really invent this new structure. Their clients have been asking for an alternative like this. In fact, Lucid Realty is currently piloting this program with several clients.

Gary went on to contrast the 100% rebate program with Koenig & Strey’s recent announcement that effective today they will begin charging home buyers a fee to work with one of their agents: “We understand why Koenig & Strey introduced this fee. They are trying to solve the same problem that we are trying to solve. The main difference is that the Koenig & Strey solution ends up costing home buyers more while our solution should cost them less.”

Initially, Lucid Realty is offering an introductory rate of $75 per hour under the 100% rebate program in order to generate more interest. As Gary explains: “Compare that to mechanics, plumbers, and interior designers who all charge $100 per hour. This is a bargain.”

About Lucid Realty, Inc.
Lucid Realty, Inc. is the Chicago area’s full service, discount, real estate brokerage. Lucid Realty distances itself from traditional brokerages and provides a better value to the consumer. It is a full service broker, offering substantial savings to both buyers and sellers, providing services by employees not independent contractors, working as a team instead of competing against one another, with professionalism and high standards of customer service.

Addison, Illinois Real Estate Market: Single Family Home Sales

Fri, 03 Feb 2012 15:06:24 +0000

Because I live and work in Addison, Illinois and am active in the Addison Chamber of Commerce, I frequently look at data relating to the Addison Housing Market. Today, I reviewed all single family home sales in Addison over the last four months (October 2011 through February 1, 2012. 55 single family homes sold ranging in price from $49,000 to $416,000 with 78% of the home selling for under $200k. The three bedroom ranch home located at 104 Iowa was pretty decent on the first floor, but the basement was definitely built for Mayans – the ceilings are lower than 5 feet high, and the basement was full of mold and it sold for $50k. On the other end of the spectrum, the buyers who paid above $400k (two of them ) got beautiful new construction homes at bargain prices!

On average, the homes were for sale in the Addison, IL real estate market for 180 days – the majority of the homes were 3 bedrooms with 6 or 7 rooms with a few having more or less rooms. Still staggering is the number of distressed sales, which is 48%. While its down from the 2011 rate of 51%, it still is a huge factor in the home values in Addison, Illinois. For comparsion sake, the rate of distressed sales in Elmhurst for 2011 was 15% and in Lombard, distressed sales account for 32% of the single family homes sales.

Home Buyers Finding Bargains In Oak Brook’s Midwest Club

Wed, 25 Jan 2012 01:22:15 +0000

Midwest Club, Oakbrook

This month another luxury home sold in the Midwest Club in Oak Brook. 302 Midwest Club sold for $905,000 on January 13th. Listed at $800k, 302 Midwest Club Parkway is a bank owned home built in 1986 with 5200 square feet of living space, 5 bedrooms and six bathrooms. The home was once listed with a sales price of $2,999,850 and in 2007 had a mortgage against the property of over $2mm dollars.

The listing agent described the home as:

Wow! 2 story grand foyer, 1st flr master, hdwd flrs, & tray ceilings. 2nd flr w/ 4bdrms incl a master. Screened porch. 24 hr gate guard. Clubhouse w/ pool & tennis courts. OB/Hinsdale Schools! Come live the lavish life in MidWest Club! The most desirable gated community in Oakbrook!!! HOME IN MID REHAB COME TAKE A LOOK WITH ALL YOUR PERSONAL IDEAS!

Between the first time the home was listed and this last time someone started a major rehab project and then abandoned it. At the time of this sale the house had no flooring, the basement was gutted, and all the appliances, cabinets, and fixtures had been removed. The home was a shell of its former self.

Interestingly enough, the listing agent represented both the buyer and the seller in the transaction. The Midwest Club home was listed on the MLS December 14th with a demand for all offers by December 18th. Four days. Is that the best way to find the buyer willing to pay the highest price? Probably not, who knows what drives decisions on bank owned properties. Definitely notable is that the listing agent was also the buyers’ agent. One might wonder about the possible conflict of interest with dual agency in a case like this since the listing agent knew all the bids.

While this home was bank owned, most of the sales in Midwest Club over the last year have sold at significant discounts whether they were bank owned or not. If you are already searching the Oak Brook Market for a home, then it would be a good idea to set your upper price threshold around 25% higher than what you are willing to spend, especially if you are looking in the Midwest Club subdivision. My partner wrote about the huge discounts on Oak Brook homes.

There are two additional homes under contract in Midwest Club. My guess is both will close at significant discounts off the current list price. Will sellers get the picture and adjust their prices downward toward what the current market bears? The smart ones will.

Recent Home Sales in Midwest Club, Oakbrook

#	Street	Beds	Sq Feet	Closed Date	Sold Pr	List Price	Discount
302	Midwest Club Pkwy	5	5200	1/13/2012	$ 905,000	$ 800,000	-13%
306	Midwest Club Pkwy	5	4700	8/24/2011	$1,100,000	$1,199,900	8%
508	Midwest Club Pkwy	5	5010	4/15/2011	$1,100,000	$1,350,000	19%
1001	Midwest Club Pkwy	6	11290	8/9/2011	$3,100,000	$2,999,000	-3%
1614	Midwest Club Pkwy	4	0	10/13/2011	$1,300,000	$1,680,000	23%
1902	Midwest Club Pkwy	5	0	8/29/2011	$2,800,000	$3,999,000	30%
2017	Midwest Club Pkwy	7	14000	11/15/2011	$1,800,000	$3,199,000	44%

Elmhurst Real Estate Market Review: A Look Back into 2011 and 2010

Mon, 09 Jan 2012 13:04:08 +0000

2011 Elmhurst Real Estate Market

Elmhurst Condominium Market

In 2011, Elmhurst Condo sales were down drastically over 2010 with nearly $25mm dollar in volume sold in 2010 reduced to just over $11mm in condo sales in 2011. In 2011, just 50 condo and townhome units sold in Elmhurst, compared to 108 in 2010. In 2010, distressed condo sales (short sales or foreclosures) accounted for about 20% of the sales in Elmhurst which were at 15% in 2011.

On average a condo stays on the market for 240 days and as of January 1, 2012 there are about 18 months of inventory on the Elmhurst condo market.

Elmhurst Single Family Homes

The Elmhurst single family home market faired much better in Elmhurst in 2011 than the condo market did. In 2011 there was $155mm of home sales up over the 2010 volume of $142 mm. A total of 383 homes were sold in 2011, with fewer than 15% of the sales being distressed, in 2010 there were 343 homes sold in Elmhurst with 20% of the sales being distressed, so an increase in homes sold and a decrease in distressed sales, which is quite a bit different than Chicago as a whole.

2012

My expectation for the 2012 real estate market in Elmhurst is that there will be an increase in the sale of distressed properties along with an increase in total number of homes sold. Already the phone is ringing with showing requests and buyers ready to get out and start looking. March is historically the month where the most home inventory hits the market in Elmhurst.

Du Page County Property Tax Rates

Thu, 03 Nov 2011 19:19:25 +0000

When you are purchasing a home, it is important to understand the economics of the home and property taxes are a huge factor in the equation. So, just how do you figure out what your taxes will be?

It is not a good idea to simply look at what the current owner is paying because there are many variables. In Chicago, we typically tell our clients to expect a tax bill at about 1.5% of the purchase price. In Du Page County, the range is from about 1% in Oak Brook all the way up to nearly 3% in Glendale Heights. Oak Brook is home to many large corporations and of course Oak Brook mall which helps keep property taxes low.

So, how did we come up with the 1-3% range? Below is the formula used in Du Page County to calculate property tax.

Du Page County Tax Calculation

A home’s fair market value: $5000,000 – Fair Market Value is defined as the amount a buyer would be willing to pay for the property.
Tax assessor’s adjustment: $500,000 x 33% = Equalized Asessed Value – In Du Page county, the assessor uses of 1/3 of a homes fair market value in determining DuPage County property taxes.
Equalized assessed value: $165,000 – This is the adjusted fair market value of your property used for property tax calculation purposes.
Property tax rate: 5% **Rates vary by city as indicated in the table below – 5% used as a simplification for example.
Property tax calculation: $165,000 x .05 - Equalized assessed value multiplied by a property tax rate of 5% .
Total property tax : $8,250

Du Page County Real Estate Property Tax Table

Rank	City	Rate	As % of purchase price
16	Addison	6.3238	2.11
4	Aurora	7.9642	2.65
7	Bartlett	7.6127	2.54
9	Bensenville	7.2293	2.41
18	Bloomingdale	6.1882	2.06
8	Bolingbrook	7.4761	2.49
32	Burr Ridge	4.1498	1.38
5	Carol Stream	7.7741	2.59
29	Clarendon Hills	4.9827	1.66
26	Darien	5.5233	1.84
28	Downers Grove	5.0111	1.67
10	Elk Grove Village	7.0656	2.36
27	Elmhurst	5.4604	1.82
15	Glen Ellyn	6.4316	2.14
1	Glendale Heights	8.7689	2.92
2	Hanover Park	8.1067	2.70
31	Hinsdale	4.4090	1.47
22	Itasca	5.9902	2.00
13	Lisle	6.5662	2.19
12	Lombard	6.6908	2.23
24	Naperville	5.8959	1.97
34	Oak Brook	2.9139	0.97
30	Oak Brook Terrace	4.6839	1.56
21	Roselle	5.4484	1.82
20	Villa Park	6.1923	2.06
19	Warrenville	6.1354	2.05
14	Wayne	6.5144	2.17
3	West Chicago	8.0839	2.69
25	Westmont	5.5351	1.85
17	Wheaton	6.1888	2.06
33	Willowbrook	4.0133	1.34
10	Winfield	6.8270	2.28
23	Wood Dale	5.9244	1.97
6	Woodridge	7.6455	2.55

In communities where there are more than one township, the higher of the tax rates is shown in the table above.

Hamptons of Hinsdale: Luxury Condos and Townhomes for Sale

Mon, 24 Oct 2011 15:24:17 +0000

Looking to live in Utopia? Then you might want to check out the Hamptons of Hinsdale. Located near the intersection of 59th and Washington Streets in Hinsdale, the Hamptons plans to offer over 100 luxury units, both townhomes and condos set in a serene park like location with ponds and open space. The infrastructure and site improvement work is virtually complete. The first four-unit town home building is complete (pictured below) and a 23-unit condominium building is also under construction. Foundation work and underground garages have been completed for two additional condominium buildings.

Background

In 2002, Wextrust Development purchased the property for $18 million. Wextrust planned to construct 12 buildings on the Hinsdale site. In the original plan, seven buildings would contain 23 luxury townhomes and five larger structures would house 93 condominium apartments. Prices were to range from $339,000 to $697,900 for the condos and $695,000 to $940,000 for the townhouses. But work on the project halted that year when Wextrust CEO and COO were indicted by a federal grand jury for involvement in a $255 million Ponzi scheme.

After sitting on the market for sometime, The Hamptons was purchased by a subsidiary of Oak Brook-based Inland Opportunity earlier this year from Citizen’s Financial Bank. According to The Hamptons website, The Hamptons is “Well-funded, carefully planned and on schedule for completion in the near future.” Next Generation Development out of Wheaton will handle construction, sales and marketing.” The Hamptons sales trailer is now on-site along Grant Street, well as the rear entry near Washington & Kennedy.

Located on a 12.5 acre parcel of land, The Hamptons offers 26 Villa Townhomes and 93 Condominiums set among landscaped grounds, featuring shingle-style architecture, open space with gazebos and a tranquil pond. The Hamptons is situated in the highly desirable Elementary school district 181 and in Hinsdale Central High School District.

Marketed as “affordable, intelligent living”, there are four town home designs that span 2,473 to 2,817 square feet and 9 condo floor plans are available, ranging from 1,262 to2,239 square feet. In a small change from the original plan there will be four condo buildings and six villa buildings. Below is a table showing the units being offered with links to more information for the units available now.

Unit	Sq. Ft.	Beds	Baths	Starting Price	Type
Biltmore	1,262	1	1.5	$290,000	Condo
Chelsea	1,466	2	2	$355,000	Condo
Rushfield	1,673	2	2	$390,000	Condo
Felsted	1,702	2	2	$425,000	Condo
Lennox	1,740	2	2.5	$440,000	Condo
Kelmscott	1,807	2	2.5	$485,000	Condo
Oxford	1,833	2	2.5	$505,000	Condo
Shelbourne	2,000	2	2.5	$530,000	Condo
Wentworth	2,239	2	2.5	$550,000	Condo
Broadmoor	2,473	2	2.5	$598,000	T/home
Cotswold	2,647	3	2.5	$647,000	T/home
Prescott	2,689	3	2.5	$658,000	T/home
Nantucket	2,818	2	2.5	$698,000	T/home

The grand opening took place the weekend of September 9^th.There are two units listed for sale in the MLS as available now, the Broadmoor and the Cotswold. Both are listed substanially higher than the starting prices listed on the table above -with the Broadmoor being listed at $689,900, and the Cotswold for $697,000. Also, not in the MLS but listed as available on the Hamptons site is the Prescott for $722,000. As of October 20, 2011, one unit has sold, and that was for a Prescott unit back in 2008 for $1,036,058. Bet that guy is anxious for some neighbors who are going to pay about 30% less than he did. Ouch.

Hinsdale Condo Market Conditions

Currently, there are a total of 68 units on the market in all of Hinsdale priced from $60k to $1mm. In the last 12 months, in the Hinsdale Market, 16 condo/townhome units have sold ranging in price from $142,500 – $950,000. Simple math indicates that there is already a 4 1/4 years supply of inventory. With The Hamptons adding an additional 112 units, the time triples. It will be very interesting to see what sort of demand the Hamptons is able to create.

Elmhurst Condo and Townhome Market Stable

Mon, 03 Oct 2011 20:16:19 +0000

Comparing the one year period of time ending on September 24, 2011 and the same period of time the prior year, the volume of sales has been pretty consistent, with 52 sales of condos/townhomes in Elmhurst this year and 54 at the same time last year. Sales of distressed properties (foreclosures and short sales) have increased from 15% of all units sold to 21% of units sold.

Prices for condos and townhomes that sold this year range from $15,000 – $609,000 and last year at this time, the range was similar, but note the floor decreased dramatically from last years $55,000 – $ 615,000. There were three properties that sold under $55k this year.

The average price per square foot has decreased from $176 to $158, even though the mix of properties sold were built in 2000 or later went from 30% of the units sold to 46% of the units sold.

So what can you get for under $225k in the Elmhurst condo market? Located at 136 N Haven is a vintage one bedroom, one bath 828 square foot condo located a short walk from the train listed at $219k. For $215,000 you can get a 1,486 square foot new construction 2 bed, 2 bath condo and it comes with heated garage space located in the Essex Place condos which are located just a stones’ throw from the new Elmhurst Hospital campus at 175 Brush Hill.

For the big spenders who like the biggest and brightest of everything, there are six new construction townhomes located on First Avenue in Elmhurst within walking distance to downtown and the train. Several models with three bedrooms and 3 ½ baths are for sale priced between $565k and $625k. Check out 359 W First to see the most expensive townhome option available in Elmhurst.

Overall Elmhurst Market Conditions

As of September 1, there was about an 18 month supply of condo inventory on the market, which is the lowest it’s been in the last 2 years at this time. The time a condo/townhome stays on the market has remained consistent at about 200 days, though we’re moving into the slow selling season, which should present some buying opportunities as sellers compete for fewer buyers.

Opportunity Abounds for Home Buyers in Addison

Mon, 26 Sep 2011 14:12:27 +0000

2011 has been a tumultuous year for home sellers, and here in Addison, there’s no exception; 57% of the properties sold were distressed sales -that almost a 10% increase over last year at this time. With nearly 60 % of sellers in trouble or already gone, prices are on the decline.

Between 1/1/11 and late August, 106 single family homes and 48 condo/town-homes have sold. At the same time in 2010, there were 127 single family and 38 condo sales. On homes where square footage data is included the average price per square foot on single family homes is $110, and around $80 on condos. That’s about a 10% decrease in single family and a whopping 50% decrease in last years condos over last year’s average square foot price of around $120 (condos and single family homes)!

The highest priced home to sell this year was $530k. The home was built in 2004, w/over 5900 Sq ft., 5 BR& 3 ½ baths. It was the only home in Addison to sell for over $500k in 2011, but it represents a tremendous value with its location, square footage, and amenities. There were 2 sales in 2010 of homes over $500k. Of the 175 single family homes for sale in Addison, 13 are priced above $500k.With only 3 buyers in this price range in the last year, you can see why it’s tough to sell homes at this price point.

On the other end of the spectrum, the lowest priced unit was a 1 bed/1 bath condo selling at $23,500 when a similar unit sold last year for $49,900. There are a ton of opportunities to own condos at prices far below $100k. In fact, there are decent single family homes available for around $150k. There are great new construction options as well at Armitage Pointe where you can have a home built on one of several available lots, or buy one of the builders models.

Yes, The Chicago Real Estate Market Is Hot

Thu, 23 May 2013 23:37:49 +0000

Back in February I did a blog post on just how hot the Chicago real estate market was. At that time I looked at properties above $150,000 in a specific geographical area of the city that is extremely popular with high income demographics. With the Chicago April home sales numbers coming in so strong and today's discussion of those numbers on Cribchatter I thought I would do a quick update on that February post - a simple snapshot of how fast homes sold and at what kind of prices.

How Quickly Homes Are Selling In Chicago

Using the same methodology I used in my February post I looked at all the properties listed between April 1 - 16 and then looked at the outcomes of those listings as of today. A whopping 42% of those listings went under contract within 14 days of being listed and are still under contract and an additional 19% went under contract after 14 days. 42% is essentially the same level we were peaking out at back in February so the market is maintaining it's "hotness". Keep in mind that properties listed on April 16 have not has as much market time as properties listed on April 1 but they've all been on the market for at least 14 days.

What Prices Homes Are Selling For

Something I did not look at in February that I have been looking at recently is what percentage of homes which sell are closing at or above list price. The numbers are astonishingly high and highly reflective of the multiple bid situations that have become endemic.

Don't Let Realtors Take Credit For Sales Successes

As I always like to point out this is the market speaking and does not attest to any special powers of realtors. If anything it looks to me like they are likely leaving money on the table. If you want to keep up to date on the Chicago real estate market, get an insider's view of the seamy underbelly of the real estate industry, or you just think I'm the next Kurt Vonnegut you can Subscribe to Getting Real by Email.

Foreclosure Process Slows Down Once Again

Tue, 21 May 2013 12:03:28 +0000

One of the problems plaguing the housing market is a large backlog of foreclosures - the shadow inventory. For numerous reasons it has been taking forever for this foreclosure backlog to clear. Every month when RealtyTrac releases their monthly foreclosure market report they lament the fact that the process takes so long and that we are still recovering from various government initiatives that stopped the entire pipeline dead in its tracks. On the one hand it means that this shadow inventory is hanging over our heads a really long time. But on the other hand the trickle of foreclosures at least prevents us from drowning in distressed property sales. Well, on Friday the American Banker reported that once again more sand has been thrown into the gears of progress with a recent Office of the Comptroller of the Currency's release of new guidance pertaining to foreclosure sales. In response to this new guidance Wells Fargo, Citigroup, and JP Morgan Chase halted "the vast majority" of their foreclosure sales in "multiple states", though JP Morgan Chase has since resumed their normal activity. Interestingly the OCC has not indicated that they have any reason to suspect malfeasance on the part of mortgage servicers and the three mortgage servicers above have not indicated that they have any reason to believe that they are not currently in compliance with these recently clarified minimum standards for foreclosure sales. If you look at the list a lot of these requirements are pretty basic. I'm sure lots of people are covering their asses here. I obviously can't say whether or not these foreclosure sales needed to be stopped or not. On the one hand these lenders/ servicers can be pretty damn incompetent. On the other hand you've got the government reasserting themselves on the foreclosure process again. In the end it's just going to take longer to get these foreclosures done with.

How "They" Measure The Square Footage Of Your Home

Thu, 16 May 2013 20:53:26 +0000

You would think that measuring the square footage of your home would be pretty straight forward - get out the tape measure, break the home up into rectangles, and add up the area of the rectangles. Seems logical right? But coming up with a square footage number is kind of like the old joke about the accountant who aces the interview question of how much is 2 + 2 by answering "What would you like it to be?" And, unfortunately, the square footage that is calculated very much depends upon who is doing the measuring and for what purpose.

How The Appraiser Measures Square Footage

Perhaps the most straightforward and logical measurement is the one that appraisers tend to use. They measure the shell of the home to calculate what they call Gross Living Area. For a condo they have no choice but to start with the internal measurements - from the inside of the walls - but they might add on 6 inches for the wall thickness. For a single family home they usually use the outside dimensions, so the thickness of the exterior walls is included. And they only count the space that you can actually live in. However, even this technique leaves room open for interpretation. What happens if one floor of the home has an area that is open into the floor above it - like a family room or foyer with a 2 story vaulted ceiling? Then clearly the upper floor has less floor space than the lower floor. Frankly, I'm not sure how appraisers would handle this but I suspect that since they are using external shell dimensions they would treat both floors equally. Apparently the Fannie Mae guidelines indicate that this open area should be counted twice - once for each floor. However, there is an ANSI standard Z765-2003 that specifies that this area should only be counted once. Another subtlety here...for a single family home the Gross Living Area technically does not include the basement or any space even partially below grade, regardless of the level of finishes there. However, the appraiser will separately note the square footage of the basement and explicitly take it into account.

How The Developer Measures Square Footage

Why would I make a point of saying that appraisers only count space that you can actually live in? Because those sleazy developers will count all kinds of space in their square footage measurement for marketing purposes - decks, balconies, terraces, and even garage space. Developers of downtown Chicago high rises built in the last 10 years often included the balconies in their square footage measurements - probably because they are under a roof but certainly because it makes the property look better. The University Village developer included the attached garage space in the square footage calculations of the townhomes. So my 3100 square foot townhome was really more like 2700 square feet.

How The Tax Assessor Measures Square Footage

If you look at the square footage listed in the tax records for single family homes you will see that the basements are not included. It doesn't matter if they are finished or not. For whatever reason they don't include it. They do note whether or not there is a basement and whether or not it is finished so I don't think that their methodology provides any tax advantages to homeowners with finished basements.

How The Realtor Measures Square Footage

Well, typically they don't - measure it that is. They will pick up whatever number is available from the seller or the builder without confirming it. The MLS now requires that they indicate the source of the square footage but the options include "estimated" and "other". But rest assured that the realtor is going to use whatever number is generally used in the development or the neighborhood and will be biased towards a larger number and may even round it up to the nearest 100 sq ft.

An Alternative Way Of Measuring Square Footage

Because square footage numbers are often unavailable and misleading one thing that I and some of my more analytical clients will do is calculate the square footage of each room from the MLS dimensions and add them up to get what I call the livable space. On the one hand this gets you an decent estimate of how much space you actually have to put furniture in and plop yourself into, eliminating wasted space like wall thicknesses and hallways. But on the other hand it ignores things like bathrooms and closets, which are an important feature of homes. The end result of this approach can easily be half of the Gross Living Area.

The Bottom Line

It gets even more complicated but I don't want to make a career out of contemplating square footage measurements. There are rooms with low ceilings and sloping ceilings and adjacent structures that need to be considered. So what is the bottom line in all this? The unfortunate fact is that you can never be really sure what you have or what you are getting unless you ask a very pointed question: How is that number calculated? You can have some fun watching the real estate agent squirm when you ask them that. They will certainly try to avoid giving you a straight answer but keep poking around until they do. However, there is a decent chance that in the end they will simply tell you that they have no idea who came up with that number or how they did. And if they do give you a direct answer don't believe them unless they seem really confident in their understanding.

Chicago's New Construction Single Family Homes $400,000 - $600,000

Tue, 14 May 2013 14:00:07 +0000

As a follow up to my earlier post on where to find single family homes in Chicago under $400,000 I'm looking at the next tier of homes - up to $600,000. As you look at the map of this group below and compare it the lower tier you see, not surprisingly, that this new development shifts further north and east. The community areas with the greatest concentration of these new construction homes are in order of magnitude:

Logan Square
Bridgeport
West Town
Irving Park
Jefferson Park

New Single Family Home Construction In Logan Square And West Town

Check out the map below to see where the action is in Logan Square and West Town. Between $400,000 - 600,000 it's all happening West of Western and East of Kedzie between North and Fullerton, with roughly 34 single family homes sold/for sale in the last 12 months. Just eyeballing it it looks to me like it's the highest density of development in this price range. A number of these are in Ranquist's Flexhouse Development that I mentioned in my last post. In addition there are multiple homes from each of SCG Integrity Residences, Sustainabuild, SmartTech, and Indigo at the lower end, which will get you between 2400 - 2700 sq ft. At the high end is a home at 1623 N Rockwell with 4 bedrooms and 3 1/2 baths spread out over 3000 sq ft on a standard sized lot. It has the ultra modern finishes that seem to be standard in new construction today, along with lower grade stainless steel appliances. I'm not sure who the builder is but they have apparently built several similar homes in the area. [caption id="" align="alignnone" width="512"] 1623 N Rockwell[/caption]

New Single Family Home Construction In Bridgeport

Bridgeport had about 17 new single family homes either on the market or sold in the last 12 months in this price range. The developers active in this price range in Bridgeport include Morgan Street Development, which is building 15 homes there, Bridgeport Collection, and Lexington Homes. Landmark and Property Group, who I previously mentioned was building lower priced bungalows in the area, has also been active at this higher price point with larger homes. The Lexington Place homes look really interesting in that they don't have that mausoleum look to them that is so popular in Chicago and they are priced around $500K for a 4 bedroom, 2 1/2 bath, 3600 square foot home on an oversized 26 x 147 lot. However, I don't see how they come up with 3600 square feet since the description implies an unfinished basement and the bedrooms don't seem huge??? But I will say that in all these homes the finishes appear to be way better than what was put in Bridgeport Village. [caption id="" align="alignnone" width="512"] Lexington Homes[/caption]

New Single Family Home Construction in Jefferson Park

The new construction in Jefferson Park is happening in a development called Edgebrook Glen where most of the homes have 3 - 4 bedrooms, 2 1/2 baths, are priced in the mid-400s and are about 2800 sq ft. Lot sizes are about 47 x 90 ft. These homes have the ultra modern interior finishes but they are lower grade obviously - lots of carpeting in the photos but I have to believe you can get hardwood floors as an option. At the upper end are a couple of 3800 square foot homes priced in the low 500s with 4 bedrooms and 3 1/2 baths. [caption id="" align="alignnone" width="500"] Maple Model in Edgebrook Glen[/caption]

New Single Family Home Construction In Irving Park

The bulk of the new construction homes in Irving Park are the SmartTech homes being built in the 3600 north block of California. Priced in the upper 400s these homes have 4 bedrooms, 2 1/2 baths, and are 2400 square feet on standard sized lots. In addition there were a number of 5 bedroom, 3 1/2 bath 4000 square foot homes often built on 29 foot wide lots and priced in the low to mid 500s offered by Insite Homes. [caption id="" align="alignnone" width="512"] Insite Homes Irving Park[/caption] If you want to keep up to date on the Chicago real estate market, get an insider's view of the seamy underbelly of the real estate industry, or you just think I'm the next Kurt Vonnegut you can Subscribe to Getting Real by Email.

Chicago Foreclosure Activity Continues To Trend Downward

Thu, 09 May 2013 19:23:44 +0000

RealtyTrac just released their April foreclosure market report and the data for Chicago indicates a continuing declining trend in foreclosure activity. Despite the headlines that auction activity was up dramatically from the previous month and previous year as you can see in the graph below these numbers jump around an awful lot. In addition, if you look closely you'll see that the bank repossessions declined quite a bit in April, probably because the auction activity had been much lower in the last couple of months. In total the foreclosure activity actually continued its downward trend of the last few months. Also of significance is the fact that Chicago's shadow inventory declined in the last month, down from 37,473 to 36,510 units. Obviously we still have a long way to go.

Chicago Real Estate Market Update: April Home Sales Soar Yet Again

Tue, 07 May 2013 12:50:22 +0000

The Chicago real estate market continued to demonstrate it's incredible strength in April with home sales up 32.5% over the previous April. That's on top of last April's 19.4% increase and it's the 22nd month in a row of year over year home sale increases, confirming yet again that the Chicago real estate market is super hot. In keeping with my usual caveat...when the Illinois Association of Realtors reports these numbers in 2 weeks they will be understating it as a 27.8% increase because they will be comparing preliminary 2013 numbers to final 2012 numbers for April. In addition you can expect them to make much ado about the increase in median prices, which hit at least a 2 year high of $221,700 or 21.8% above last year's $182,000. Just a reminder that this doesn't really mean much. It's certainly not an indication of the overall level of prices but rather an indication that the mix of homes sold is skewing decidedly upward. As I get into below there are far fewer distressed property sales than there have been in the past.

April Chicago Home Sales

When you look at the long term graph of Chicago home sales by month below you can see that this April was the highest in 6 years. Furthermore, you will note that this is a level higher than that of 2001, which was actually the beginning of the housing bubble. On the one hand I would not expect us to hit the bubble levels any time soon unless we began another bubble. On the other hand though there is probably a lot of pent up demand sitting out there so we might still see some further increases over the next 12 months.

Chicago Home Contract Activity

Contract activity, which is a leading indicator of home sales, continues to point in an extremely positive direction. I don't have that data as far back but as you can see in the graph below this April had the strongest contract activity in 5 years. This April was 22.6% above last year and the moving average, in blue below, continues to move upward. In general the growth in contract activity has been stronger than the growth in closings but every so often the backlog of pending home sales clears and results in surges like we just saw in April. Right now pending home sales is sitting at 7011, which is just a tad over a 3 month supply at April's sales rate.

Distressed Home Sales

As I alluded to above the percentage of distressed home sales in Chicago has been trending downward. April hit the lowest level in 5 years, edging out 2010 by just a hair at 32.3%. This is what is driving the median price higher, not an overall increase in prices, though that is a contributing factor as well.

Chicago Home Inventory

There is still a critical shortage of good home inventory in Chicago, making it extremely difficult for buyers to find anything decent. However, as you might expect, sellers and their agents are in great shape with properties selling in record times. Some listing agents are making a killing these days so keep that in mind when negotiating the selling commission (it is negotiable). From a high of 14.1 months back in January 2009 single family home inventory has dropped to 4.1 months in April. Meanwhile condo inventories, which peaked at 18.3 months, have now plummeted to a 3.1 month supply. And it just keeps on dropping. If you want to keep up to date on the Chicago real estate market, get an insider's view of the seamy underbelly of the real estate industry, or you just think I'm the next Kurt Vonnegut you can Subscribe to Getting Real by Email.

Case Shiller: Chicago Home Prices Up 5.1% In Last Year

Tue, 30 Apr 2013 13:46:05 +0000

For anyone watching the real estate market in Chicago these days it should come as no surprise that the Case Shiller home price index just released shows that Chicago single family home prices were up 5.1% over the 12 month period ending in February. However, as is typical for this time of the year, prices were actually down slightly from January. On a year over year basis Chicago single family home prices improved at the highest rate in the last 6 years. Condo prices in Chicago improved by 5.9%, which was the same as the improvement shown in January but that's also a 6 year high. That's also 4 months in a row where home owners are better off (on average) than they were a year ago. And, as you can see in the graph below, this is a metric that has been decidedly negative for more than 5 years. According to Case Shiller Chicago home prices actually declined slightly from January to February with single family home prices declining by 0.8% and condo prices declining by 2.4% but as I said above that is normal seasonality. Single family home prices are still 7.7% above the seasonal low reached in March and are back to the levels of April 2001 but that puts them 34.3% below the bubble peak. That leaves them 29.4% below that long term trend line in red in the graph below. Condo prices declined by 2.4% in February, which is 6.3% above the seasonal low and back to the levels of March/ April 2000. Condo prices are now 35.8% below the bubble peak. According to David M Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices, commenting at the national level:

The 10- and 20-City Composites recorded their highest annual growth rates since May 2006; seasonally adjusted monthly data show all 20 cities saw higher prices for two months in a row – the last time that happened was in early 2005. Despite some recent mixed economic reports for March, housing continues to be one of the brighter spots in the economy. The 2013 first quarter GDP report shows that residential investment accelerated from the 2012 fourth quarter and made a positive contribution to growth. One open question is the mix of single family and apartments; housing starts data show a larger than usual share is apartments.

He also pointed out that New York, Boston, and Chicago had the lowest year over year price increases of the 20 cities in their composite index. Half of the cities have double digit increases, with Phoenix in the lead at 23%, but Phoenix was one of the hardest hit markets. If you want to keep up to date on the Chicago real estate market, get an insider's view of the seamy underbelly of the real estate industry, or you just think I'm the next Kurt Vonnegut you can Subscribe to Getting Real by Email.

Teardowns And New Development Booming In Chicago's East And Ukrainian Village

Mon, 29 Apr 2013 11:39:29 +0000

The welcome sight next door to my house of that POS being torn down to make way for new construction of a single family home is very common these days in Chicago's East and Ukrainian Village neighborhoods. In fact, when I went out to talk to the 72 year old owner/ operator of that backhoe he basically told me that he's booked out for at least one month in the neighborhood with 9 teardowns. The pace of development in the neighborhood is nothing short of astonishing and it can only be good news for the current residents as unsightly and dangerous structures disappear to be replaced by $800,000 brand new single family homes. In my own case that building next door was really disgusting and harbored rats and feral cats. The owners apparently had some cockamamie plan to rehab it but the guy tearing it down confirmed what was obvious to me: it was structurally unsound. As he tore into one section the whole thing came tumbling down. [caption id="" align="aligncenter" width="400"] Using the backhoe as an elevator. Clever but this has to be some kind of OSHA violation.[/caption] The area development appears to be driving up the price of teardowns. It looks like you can still buy them just under $200,000 but then you get these aberrations like 1901 W Ohio, which is a 24 x 99 ft lot that sold for $275,000 at the end of last year - and it's only a block or two from Grand, which isn't that nice. And it's not just the construction of the occasional single family home that is changing the face of the neighborhood. As I previously posted there's the Remy Estates development by Noah Properties at the site of the old Gonnella Bakery headquarters. And just recently we received word of several new area developments in this part of West Town:

Crain's reports that Alex Nakonechny of SmartTech Homes and investor Rogelio Llamedo are planning 36 condos at 819 N. Paulina St - 6 buildings, each with 6 units. The three and four bedroom units will be priced from $350,000 - 450,000.
The Fifield Companies will be building 48 apartments and 9000 square feet of retail space in 3 four story buildings at 1822 - 1850 W Chicago. See the rendering below. Looks pretty darn cool.
There is even some residential development planned for the wasteland that is Grand Avenue at 1651 - 1659 W Grand. The development will include 15 condos and 3000 square feet of retail space.
And then there is the mysterious teardown that occurred on the southwest corner of Chicago avenue and Wood St. - 1801 W Chicago. I'm still trying to find out what's going on there but it may just be a piece of land looking for a developer to come along.

[caption id="" align="aligncenter" width="540"] Fifield Companies' planned development at 1822 - 1850 W Chicago[/caption]

Where To Find New Construction Single Family Homes In Chicago Under $400,000

Thu, 18 Apr 2013 18:24:54 +0000

I started to poke around the other day on the MLS trying to figure out a better way to track new construction of single family homes in Chicago. After all it's a big city and it's hard for buyers to keep track of what is going on everywhere. Well, I think I finally hit on a good methodology, which I explain at the bottom of this post. In short, the idea was to focus on "new" homes marketed and often sold in the last 12 months. I found just under 300 of these new construction single family homes marketed in Chicago in the last year. As I went through the list I was able to identify geographic groupings of properties by price point as you might expect so I decided to do a short post on each of these groupings. The first logical grouping (admittedly using Gary logic) was under $400,000.

New Construction Single Family Homes In Chicago Under $400,000

You would be surprised what you can buy under $400,000 in this city. There were 58 of these homes marketed in the last 12 months - only 6 of which are currently on the market. First let's look at where these homes are located. As you can see in the map below they tend to be clustered along the Kennedy (mostly west of it) and the Stevenson (mostly south of it). If we go in for a closer look we see that each area has it's own style and is being built up by different developers. And, unfortunately, the map above can be a bit deceiving when several homes are right on top of one another - they get buried. For instance, Noah Properties, who is doing a ton of new construction across the city, built 5 new homes right next to each other in Dunning in the 7600 West block of Addison. These homes, all priced near $345,000, look very similar to their more expensive models in East and Ukrainian Village that sell for $800,000, but obviously are a bit smaller and have somewhat less expensive finishes. But the photos look awesome (the photo at the top of this post is one of these homes) and the homes have 4 bedrooms, 3 1/2 baths and are on 30 x 125 lots. The square footage is not listed. A number of new homes in this price range are also being built west of Western in West Town, Logan Square, and the east end of Humboldt Park as seen in the map below. For example, Ranquist Development built 8 rowhomes with 3 bedrooms and 2 bathrooms priced just under $400,000 at California and Shakespeare in their Flexhouse development, only 1 1/2 blocks from the blue line stop. The listings don't indicate the square footage but the "lots" are 17 x 71. And numerous 2400 square foot SmartTech homes with 4 bedrooms, 2 1/2 bathrooms, and ultra-modern finishes have been built in that area, also priced just under $400,000. Meanwhile, Landmark & Property Group is developing bungalows in Brighton Park, McKinley Park, and Bridgeport that are priced in the $260,000 - 340,000 price range. For instance, $340,000 (listed at $369,000) buys you a 2200 square foot home on a 24 x 108 lot in Bridgeport with 5 bedrooms and 3 baths. Here is what one of these looks like. The homes that Landmark built in Brighton Park and McKinley Park offered more for the money but are farther from downtown obviously. Without a doing a lot of research on these different offerings it sure seems to me like the Noah Properties homes in Dunning blow away these south side homes but the commute would be a lot tougher from Dunning. Methodology For Identifying New Construction Homes It dawned on me that when a new home is built and listed they don't know what the property taxes are going to be so they list them as NEW. In addition, if the home is truly new and has been marketed in the last 12 months then in all likelihood it was built no earlier than 2011. So I looked for that as well. Flipping through my results it seems that this technique does a pretty good job of identifying the new construction homes. If you want to keep up to date on the Chicago real estate market, get an insider's view of the seamy underbelly of the real estate industry, or you just think I'm the next Kurt Vonnegut you can Subscribe to Getting Real by Email.

Chicago Foreclosure Statistics For March: Moderate Activity Levels

Thu, 11 Apr 2013 18:46:51 +0000

RealtyTrac released their March Foreclosure Market Report this morning and the foreclosure statistics for Chicago indicate a continued moderate pace of activity compared to last year and especially 2009/ 2010. See the graph below. What I think will be more meaningful going forward is the number of homes in Chicago that are IN some state of foreclosure - basically the shadow inventory. I've just started to track that number and it's pretty flat from last month at 37,473. As soon as I get a few more months of data I'll create one of my signature pretty graphs. Daren Blomquist, vice president at RealtyTrac, made his usual remarks about the length of time it takes to complete foreclosures in judicial and non-judicial states and about the result of government efforts to prevent foreclosures. No surprise...politicians are no match for the laws of economics and all the government has succeeded in doing is gum up the wheels of progress. All this simply means that the banks will lose more money and more properties will be sitting in a state of decay for longer periods of time.