Chitownproperty » The Market

Getting ready for a spring market

Matt Wood — Thu, 24 Feb 2011 16:45:04 +0000

We can’t quite shake that snow around Chicago, but March is coming and that makes it feel closer to spring. Spring is also the time when lots of people shake off the winter blahs and start thinking about buying or selling a home. Here is a roundup of a few things to think about for the spring market:

Why Hire a Real Estate Agent or Realtor? – Ok, we’re biased, but getting help from someone with intimate knowledge of the market is the smartest thing you can do.
Does Buying a Rental as an Investment Make Sense? – For those of you thinking big, this may be a good time to get a deal on a rental investment.
To Sell an Apartment, No Detail Is Too Small – You might need to dial down some of the numbers from this article in the New York Times, but it’s spot on. Paying attention to how your home shows goes a long way to selling at a better price.

Foreclosure with a happier ending

Matt Wood — Tue, 04 Jan 2011 01:49:53 +0000

Here’s an interesting story from Deal Estate about a foreclosure in Lakeview that actually ended well. The home had been foreclosed and was in terrible shape, but instead of selling the home as-is to an investor at a low price, the bank spent $100,000-150,000 to renovate the place first. The listing agent estimates the condo sold for over 40 percent more, the bank turned a profit, and the neighboring homes’ property values were helped by the sale at a fair market value. Hopefully as banks clear more of their foreclosed inventory they can afford to take the time to do the same thing instead of unloading homes as-is as quickly as possible.

Where do we go from here?

Matt Wood — Sun, 19 Dec 2010 16:57:25 +0000

This post is from Steve Schneider at PHH Home Loans, Coldwell Banker’s mortgage brokerage affiliate.

“Where do we go from here?” That question from Alicia Keys’ song is on the minds of many Americans, as they wonder where home loan rates are headed after the recent negative news for Bonds.

Last week, Congress was busy at work on negotiations to extend the Bush-era tax cuts. That news kept a lid on any improvement for Bonds and home loan rates, due to the prospect of an ever-increasing deficit.

And adding to the troubles for Bonds and home loan rates last week was news that inflation is growing in China… and growing fast. How does that impact us? Remember, it’s a global economy, so Bond prices all over the world worsen on news of inflation, which is bad for home loan rates.

So the big question is: Will home loan rates go back down?

Although rates are still near historic lows, they have been headed up… and indications are that those unbelievably low home loan rates may be behind us. In fact, there are only a few things that would bring back the lows that we saw in early November:

If the tax cut package doesn’t get passed, it would be very bad news for the economy and Stock market – but it would help interest rates.
If the Fed’s recent round of Quantitative Easing falls on its face and doesn’t meet its mission of creating inflation, boosting Stock prices, lowering unemployment and creating consumer demand – Bond prices could make some gains as the threat of deflation reemerges. But this is a long shot.
If the financial problems in Europe worsen significantly – which would drive investors into the safe haven of the US Bond market – it could help Bond prices, but probably only modestly.

Realistically, the chances of these events happening are unlikely – and in the end, rates may see some brief and fleeting improvements, but many experts believe they will likely continue to creep up over time. And when you include the stimulative action of extending the present tax rates and adding further cuts, it’s tough to see Bonds or home loan rates improving much.

The good news is that home loan rates are still extremely attractive and are still near historic lows for now. If you or someone you know has been thinking about purchasing or refinancing a home, NOW is the time to call or email to get started.

Rent hikes expected in Chicago for 2011

Matt Wood — Thu, 18 Nov 2010 16:42:28 +0000

Rents are expected to increase in downtown Chicago in 2011, but that’s not clear what effect that would have on the condo market. With a weak housing market and uncertain economy, demand for rental apartments have increased, which in turn drives up monthly rates. This could mean that buying a condo becomes a more attractive option again, but it could also entice builders to convert more condo units to rentals, increasing the supply and keeping rates down. Either way it’s important to keep an eye on the rental market for cues as to how the larger housing market will recover.

Homebuyers optimistic

Matt Wood — Mon, 08 Nov 2010 02:34:05 +0000

70 percent of Americans think it’s a good time to buy a home, according to a national housing survey conducted by Fannie Mae. This optimism is due in large part to the belief that real estate prices will rise over the next year, according to 78 percent of those surveyed.

Chicago home prices improve for sixth month in a row

Matt Wood — Wed, 27 Oct 2010 19:11:52 +0000

The latest Standard & Poor’s Case-Shiller Home Price index reported that overall home prices in Chicago rose slightly in August for the sixth month in a row, putting them on par with 2003 values. While prices are still down from August 2009, however, and condo prices actually fell 2 percent from July.

NAR economist on the state of the market

Matt Wood — Wed, 20 Oct 2010 15:45:23 +0000

Lawrence Yun, chief economist for the National Association of Realtors, looks at the latest economic figures and discusses what we can expect for mortgage rates and home values. He expects that moves by Federal Reserve policymakers corcerned about deflation will push mortgage rates up from their historic lows. Home values typically rise with inflation, and coupled with a slow but steady easing of unemployment, both forces should have a positive effect on the market.

Lowering the price is a seller’s most effective strategy

Matt Wood — Wed, 13 Oct 2010 06:00:59 +0000

In a tight market with twice the inventory of homes for sale as usual, lowering the price is often the best way to sell. After a brief bump from the home buyer tax credits this spring, economists say home prices are likely to fall further, and sellers are in a difficult place trying to set the right price. This article from the Washington Post discusses how to find the sweet spot:

Analyze your market first. Determine how many houses similar to yours are up for sale. Consider neighborhood, school district, size and price point. The more homes there are, the more it becomes necessary to list at the lower end of the prevailing price range.

WSJ – 10 Reasons to Buy a Home

Matt Wood — Wed, 22 Sep 2010 19:50:17 +0000

Just when everyone is telling you this is a terrible time to buy a home, the Wall Street Journal plays the devil’s advocate and makes a list of 10 reasons you should buy now. Some highlights:

You can get a good deal
Mortgages are cheap
You’ll get a better home than renting
There is a lot to choose from

What the bear market means to a buyer

Matt Wood — Wed, 08 Sep 2010 14:51:04 +0000

At the New York Times, David Leonhardt asks how optimistically we should view the real estate market. To him, this means we have to decide if housing is more like a luxury good, where prices go up as incomes rise, or as more of a staple item, where prices rise with inflation. He concludes, more optimistically, that the evidence lies with the argument that prices rise along with income. How does this impact a potential buyer? He offers this simple advice, which is something we always tell our clients:

The best advice for homeowners and would-be buyers may be to think of a house not as an investment, first and foremost, but as a place to live. If there is a good chance you will move in the next three years or so, you should probably rent.