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Thursday, April 25, 2013

"Awesome March"

from Chicago Magazine

Chicago Real Estate Was Awesome in March

Graphic courtesy of MREDLLC
Graphic: Courtesy of MREDLLC; Thumbnail photo: Chris Sweda/Chicago Tribune

We may have had ridiculously cold weather in March, but the heat in the real estate market more than made up for that. Prices popped: In Chicago, the median sale price was 8.9 percent above where it had been a year before, and for the nine-county region, it was up 2.2 percent, according to Illinois Association of Realtors data released Monday. And the time it took to get a house sold was a little more than 20 percent faster than it had been in March 2013.

In fact, March was so good in Chicago real estate that for once, our recent tendency to be theopposite of the national norm was to our advantage: On the national scene, the number of homes sold in March was down 0.6 percent from February. Here, March was up 33 percent from February.

Poor Chicago”? I think not.

After lagging behind much of the nation’s real estate recovery, Chicago’s recovery may finally be taking root. “A lot of places have already gone where we’re going now,” says Russ Bergeron, the CEO of Midwest Real Estate Data.
Data that MRED’s Gayle Ludemann compiled for me late last week gets into detail about what happened in March. A few things stand out:

• The proportion of distressed sales dropped. In March, 43 percent of the homes sold in the Chicago area were foreclosures or short sales. That’s down from 47.2 percent the month before, and down from 45.9 percent in March 2012. (There were more homes of those types sold, but the increase in the sales of non-distressed homes was even bigger, so their share of the market shrank.)
That’s a sign that we’re moving back toward a market where distress isn’t such a dragging-down factor for sellers whose homes aren’t in distress. “Moving,” not “moved.” We’re still at more than two out of five homes selling in distress.

• Asking prices are going up much faster than selling prices. In the chart above, the green line shows asking prices and the red is selling prices. The way the spread between them has grown in the past few months worries me: I’m concerned that sellers may be too happy about the turn in the market, and in their enthusiasm could ask too much, leading to a whole new dip when buyers refuse to reach for it.

While sellers may be better able to sell now because rising home values have lifted more of them up from underwater, many sellers are still holding out for a time when prices are even higher, according to this analysis and others.

But Bergeron sees the leap in asking prices as potentially a good sign: “I think sellers are feeling more confident,” he says. “Hopefully they’ll start getting some of those prices, [because] what we’ve been lacking is seller confidence.” Buyers have been very confident, because of the combination of low prices and low interest rates making this the perfect time to buy. But “a lot of sellers have been sitting back waiting to get their best deal,” he notes.

• Are sellers getting better deals now than they were a year ago? It depends on what they’re looking for. They’re certainly getting their homes sold faster: homes that weren't in distress sold in an average of 140 days in March. That’s 38 percent faster this March than last year.

But on price, ‘better’ is not such a clear term. MRED’s data show that non-distressed sellers are getting a better percentage of their asking price: In March 2012, they were selling at 88.57% of their original list price; a year later, that had gone up a little less than three percentage points, with sellers getting 91.2% of their original asking price. But the average sale price on traditional, non-distressed homes rose a less than one percent in the same period. This suggests that sellers are doing better in part because they’ve cut their expectations.

And that loops us back to the past few months’ growing gap between asking and selling prices. Let’s all keep our eyes on how that gap changes in the next couple of months, okay?

Wednesday, April 24, 2013

Some good news...

"Sales of new homes rose 1.5 percent in March to a seasonally adjusted annual rate of 417,000, adding to evidence of a sustained housing recovery at the start of the spring buying season."

Sales of New Homes Increase 1.5% in March
New York Times

Tuesday, April 23, 2013

March Sales -- a mixed picture...

National Results...
"Sales of used homes dipped in March as the supply remained tight. But the pace remained ahead of last year’s."
New York Times

"Sales of previously owned homes fell by 0.6% in March from February, causing some analysts to second guess the housing rebound. What’s going on?"
Wall Street Journal
Why Home Sales Stalled in March

But in Chicago:

"Sales of Chicago-area homes kept rolling in March, marking 21 straight months of year-over-year sales gains.

The Illinois Association of Realtors said today that 7,914 homes sold in the nine-county Chicago area last month, up more than 18 percent from the 6,703 sold in March 2012. The month saw continued demand for local residential real estate as the market entered the key spring selling season."

Crain's Chicago Business
Chicago-area home sales up 18% in March

Monday, April 22, 2013

Recovering? Read the signs.

"After years of drowning with underwater mortgages, American homeowners are starting to swim toward the shallow end as the housing market recovers. Rising home values and increased home equity are spelling relief for many people.

Here are four signs that the housing market is recovering..."


Saturday, April 13, 2013

HARP continues

"Borrowers with mortgages backed by Fannie Mae (FNMA) or Freddie Mac (FMCC) will have until the end of 2015 to obtain new loans under the Home Affordable Refinance Program, the Federal Housing Finance Agency said today.

HARP previously was scheduled to expire at the end of 2013. The program allows borrowers to cut their loan payments by refinancing at lower interest rates even if they are stuck in homes that have lost value..."

Fannie Mae Regulator Extends HARP Refinance Program Through 2015
Bloomberg News

Thursday, April 11, 2013

Earth Day: Green Remodeling, Part 2

Green Kitchen Countertops: 3 Eco-Friendly Choices

Save money over granite and be kind to your home planet. How? Pick a green kitchen countertop material when you remodel your kitchen.

What’s green? Green kitchen countertops feature recycled or sustainable content, low-toxicity binders, eco-friendly manufacturing processes, or a combination. Local production is good, too, if you can arrange it, because transporting countertops is a big fuel-guzzler.

But the most important thing is to pick something durable—if you never have to buy new countertops again, that's as green as it gets.

These three green kitchen countertop options earn high marks for durability and style. And for value, compare them to the ubiquitous slab granite, which costs $60 to $100 per sq.ft.

1. Recycled paper countertops
Cost Starts at $30/sq ft
And, easy install = labor savings
Lifespan TBD because new on the scene, but likely a long time.
It may seem counterintuitive to use paper for a countertop, but when you bind paper fibers with resin, it makes a surface that's tough as nails. What's more, they tend to be easy to install. Since installation can equal 80% of your total cost, expect to save on labor.

PaperStone is a brand that meets Forest Stewardship Council certification requirements for materials made with sustainable forest management practices and is VOC-free.
Squak Mountain Stone is made from recycled paper, recycled glass, reclaimed fly ash, and cement; the finished countertop slabs resemble limestone and soapstone.
EcoTop countertops consist of renewable bamboo fiber, post-consumer recycled paper, and water-based resin glue.

2. Reclaimed wood countertops
Cost Starts at $40/sq ft
Lifespan Lifetime
Reuse trumps recycling when it comes to conserving resources because it keeps products from entering the waste stream. So salvaged wood countertops are green by definition. Purchase them directly at a local salvage supply or through a manufacturer that uses reclaimed materials.

Starting at $40 per sq.ft., manufactured countertops made from reclaimed wood are typically more expensive than regular butcher block.

Wood’s a beauty. But it’s prone to water damage, needs occasional re-sealing (or frequent applications of mineral oil, which can be a hassle), and shouldn't be installed directly next to a sink or dishwasher. So you'll need to budget for a second material to use in your kitchen.

Craft-Art includes a line of wood countertops made of reclaimed wood from older barns, warehouses, and commercial buildings.
Endurawood fashions wood countertops from reclaimed fir and oak, including old wine vats.
3. Recycled glass countertops
Recycled glass is gorgeous and tough (you can actually set hot pots directly on it)—but you'll pay a price comparable to slab granite, starting at around $50 per sq.ft. and going much higher.

Vetrazzo makes countertops that are 85% recycled glass. Almost all the glass comes from curbside recycling programs.
IceStone, which is 100% recycled glass in a cement substrate, meets Cradle to Cradle gold certification standards, meaning the products contain no problematic chemicals, the materials can be reutilized, and 50% of manufacturing was done with reusable energy.

By: John Riha, Karin Beuerlien contributed to this article.
from House Logic

Tuesday, April 9, 2013

Have you filed your taxes yet?

Tax day is around the corner.....

New Tax Break for Home Offices-Kiplinger

How Smart a Home BUYER Are You?

Take the quiz!
How Smart a Home BUYER Are You?-Kiplinger

Is your offer irresistible?

"You’ve found a home you can afford, in a great neighborhood with good schools. It even has a fenced-in yard for your dog. What could go wrong?

Any number of things, ranging from a competing buyer’s all-cash offer to an insufficient earnest money deposit from you. In markets with houses in short supply, sellers have the advantage over buyers, and bidding wars often erupt between buyers vying for the nicest properties. Your purchase offer should persuade sellers that you are a serious contender who will give them most of what they want, even as it protects your interests...."


9 Ways to Make Your Home Offer Irresistible to Sellers

Monday, April 8, 2013

House hunting via the internet

"Few aspects of modern life have been transformed as much by the Internet as house hunting. Last year, 90 percent of all homebuyers—and 93 percent of first-time homebuyers—used the Internet to find a home.

However, as powerful and pervasive as it is, online real estate has its failings—some obvious and some known to only a few. Buying a home is the most expensive decision most of us make, so to avoid a mistake that could become very costly, every buyer should know how online house hunting really works..."

Secrets of Online House Hunting

Friday, April 5, 2013

Have attitudes changed?

"Even as the housing market improves, Americans seem more willing to embrace renting as an alternative to homeownership, a new survey on housing attitudes from the MacArthur Foundation finds."

Americans’ Attitudes Toward Owning a House Have Changed
New York Times

What's happening at the farm...

How about the price?

"Q: I've been trying to sell my house for the past few years and have hired and fired a bunch of agents because none of them was able to find a buyer. What's wrong with all of the agents out there?"

Don't blame the real estate agent, yet
Chicago Tribune

Earth Day: Green Remodeling - Part 1

"As long as you’re remodeling, why not cut your utility bill and make your home a bit healthier?

Saving energy wasn’t on the list of reasons we’re finally ripping out the kitchen in our mid-century home (green-veined, imitation marble laminate countertops figured much more prominently). But, a session at the recent 2012 Remodeling Show in Baltimore clued me in as to why adding a few simple tasks to our remodeling plan could lower our home’s energy bill, get rid of some of the annoying hot and cold spots in our house, and make our home less hospitable to mold and other allergens.

Carl Seville, author of Green Building: Principles and Practices in Residential Construction, shared some simple, inexpensive ways to make remodels and additions more energy efficient from the standpoint of energy usage and conservation of resources.

Try these eight tips from Seville:

1. Check for water intrusion, condensation, and excess moisture before you begin the project. Fixing those issues during remodeling can improve your home’s indoor air quality (excess moisture encourages mold).

2. Use the least amount of framing allowed by your building code when adding walls. Not only will you have to pay for less lumber and fewer nails, the contractor will have more room to put insulation in your walls, making your home more energy efficient.

3. Resist the urge to splurge on multiple shower heads. Opt for a single low-flow shower head rather than installing a car wash-style plethora of shower heads.

4. If possible, add new HVAC ducts to parts of your home that are heated and cooled, rather than placing them in a space with unconditioned air (like the attic). If that’s not possible, insulate the ducts. Have an HVAC diagnostician analyze your system to make sure it’s sized correctly and balanced to properly exchange old and new air.

5. Be sure to insulate around recessed lights that protrude into un-insulated attic spaces — these are major sources of air leaks.

6. If you’re wasting water, you’re wasting energy. Look at high-efficiency or solar water heaters, and insulate your water pipes. If you want hot water faster, move the water heater closer to the faucet or install demand pumps to drive hot water to the fixture.

7. Install wall-mounted efficiency toggle switch plates for the outlets where you plug in your televisions and computers to make it easy to cut off the power to electronics you’re not using.

8. A humidistat that automatically turns on the bathroom fan when moisture rises beats depending on teenagers or tenants remembering to use the fan. Reducing bathroom moisture reduces the chances you’ll have mold.

When I pull the kitchen cabinets off the wall, I’m going to use caulk to seal between the wallboards and the floorboards before I put down new flooring and install the new cabinets. And since I’ll have the caulk out, I’m going to seal the top of window trim, something my home’s builder didn’t do.

What are your tips for smart energy savings during a remodel?"

8 Tips to Make Your Remodel More Energy Efficient and Your Home Healthier
By: Dona DeZube from HouseLogic

Wednesday, April 3, 2013

Local home prices inch higher in February

Local home prices inch higher in February

April is Fair Housing Month

As I'm sure everyone knows, a real estate broker is a state licensed professional.    As with most things,  there are Federal laws that we need to follow as well as local ordinances, county requirements and state laws.

A big part of our licensing is understanding all the Fair Housing laws.   April is Fair Housing month, so I thought I'd take a moment and share a little of what I've learned about fair housing since I became a realtor.

In the United States, the fair housing policies date largely from the 1960s. Originally, these policies came from a political movement to outlaw racial discrimination in renting and/or purchasing homes.   In April 1968, at the urging of President Lyndon Johnson, Congress passed the federal Fair Housing Act, one week after the assassination of Martin Luther King, Jr.

The primary purpose of the Fair Housing Law of 1968 is to protect the buyer/renter of a dwelling from seller/landlord discrimination. Its makes it unlawful to refuse to sell, rent to, or negotiate with any person because of that person's inclusion in a protected class.

While earlier the Civil Rights Act of 1866 included language that sounded like a fair housing policy, no federal enforcement provisions were given. 

In fact, steering people away and to certain neighborhoods was not only a established practice, it was acceptable and expected.   Before fair housing, the realtor code of ethics had language to the effect, that it was the realtor's DUTY to help people find homes in neighborhoods that were of the same ethnic, racial or religious composition.
In 1948, the Supreme Court ruled that racially restrictive covenants in real estate were unenforceable in court.

In the years following World War II, African Americans found themselves confronted with increasing patterns of housing segregation. They were excluded from the suburbs and the real-estate industry, which severely restricted educational and economic opportunities. 

The Fair Housing Act (Title VIII of the Civil Rights Act of 1968) introduced meaningful federal enforcement mechanisms. It outlawed:
  • Refusal to sell or rent a dwelling to any person because of race, color, religion, sex, or national origin.
  • Discrimination based on race, color, religion or national origin in the terms, conditions or privilege of the sale or rental of a dwelling.
  • Advertising the sale or rental of a dwelling indicating preference of discrimination based on race, color, religion or national origin.
  • Coercing, threatening, intimidating, or interfering with a person's enjoyment or exercise of housing rights based on discriminatory reasons or retaliating against a person or organization that aids or encourages the exercise or enjoyment of fair housing rights.
In 1988, disability and familial status (the presence or anticipated presence of children under 18 in a household) were added as 'protected classes' of people.  

In summary, 
  • There are seven protected classes under the Fair Housing Amendments Act of 1988: race, color, national origin, religion, sex, disability, familial status.
  • Title III of the Americans with Disabilities Act prohibits discrimination against persons with disabilities in places of public accommodations and commercial facilities.
  • The Equal Credit Opportunity Act makes discrimination unlawful with respect to any aspect of a credit application on the basis of race, color, religion, national origin, sex, marital status, age or because all or part of the applicant's income derives from any public assistance program.
  • State laws and local ordinances also protect certain classes. In Illinois, sexual orientation was added to the state list of protected classes in January 2005. "Order of Protection Status" was added to Illinois law as a protected class in January 2010. 
Every once in a while a buyer will say to me, I want to live in a community that has a large "_____ population."   (You can fill in the blank.)   

When this happens, it puts us in a difficult position.  We -- by law -- can't respond to this type of question or request.   It's considered a breach of fair housing.    Article 10 of our Code of Ethics provides that: “Realtor shall not deny equal professional services to any person for reasons of race, color, religion, sex, handicap, familial status, national origin, or sexual orientation..."

In fact, there are "testers" out there, who are sent to see whether an agent is steering buyers into or away from certain neighborhoods.   Their job is to evaluate compliance by agents, and fine agents or even pull their licenses if they are not abiding by fair housing requirements.  A breach of fair housing can cost significant fines and even more.

We've come a long way in the last 45 years from the housing discrimination that existed in the United States. 

Here's some information to learn more about Fair Housing and Fair Housing in Illinois.

Myths that fool you...

"As the real estate market significantly rebounds, some buyers and sellers are dipping their toes in the waters for the first time. Inevitably, they come into the market with assumptions about how it works...."

3 Real Estate Myths That Still Fool The Best Of Us
Business Insider

Home Price Index Best Since 2006