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Saturday, November 7, 2015

Do you know this place?

Teatro del Lago
It would be no surprise to me,  if you don’t recognize this image.  But I do.  It's a wonderful memory from my childhood days growing up in Kenilworth.  It's the Teatro del Lago.  

The Teatro del Lago no longer exists.  It’s gone the way of all the other little independent movie theatres along the North Shore.  It was a favorite haunt for those of us who could walk to the theater and see the latest films.   

The owner was pretty strict and made sure that the films were family friendly.   Although, one of my favorite family stories is when my brother disobeyed my mother and went off to see Whatever Happened to Baby Jane?  My mother would have none of it and walked right into the theater and pulled him out.

Across the plaza from the Teatro was San Pedro’s.   It was the “fancy restaurant.”  Going out to dinner at San Pedros was a very rare experience.  My dad didn’t like eating out and he certainly didn’t like eating out at an expensive place.  I remember the menu being pretty special. 

Sometimes after we had been swimming down at the beach, Dad would take us for an ice cream cone.  Right there across the street from the Teatro and San Pedros on Sheridan Road was our favorite spot: the Dairy Bar.   Sometime in the mid 50s it was renamed Peacocks.   From the Dairy Bar, we could see the ruins of a previous era and beautiful shoreline beaches.

Where were we?  Well technically we were in Wilmette, but we always called that little area, No Man’s Land.   When both Kenilworth and Wilmette incorporated, they left that 22 acres of land unincorporated.   It wasn’t until 1942 that Wilmette was able to add that parcel of land as part of its corporate limits.

During the last 150 years, this little piece of land has been a suburban retreat, an early Prohibition-era series of roadhouses, hotels, and now apartment buildings with a Spanish styled shopping area.

The story I always heard was that during Prohibition, No Man’s Land was a port for unloading liquor, which came down from Canada, through the St. Lawrence Seaway and Lake Michigan.   I don’t know if that’s true.  But what I do know is true: while the rest of the North Shore was pretty dry and tame, this little area was anything but dry during the Roaring 20s.  

During the Depression many of No Man’s Land buildings disappeared.  The Miralago Hotel burned down in March of 1932.  Wilmette and Winnetka refused to respond when the fire was initially reported. Wilmette had previously withdrawn fire protection from No Man's Land and shut off their water supply. Evanston responded and had just controlled the fire when Kenilworth police turned off the water to the hydrant being tapped. Consequently, the fire intensified and engulfed the area. Kenilworth relented and turned the water back on and Wilmette and Winnetka joined the effort, but it was too late to save the Miralago.

I just remember there being ruins of the Breakers Beach Club. 

We were all very sad when it was announced that the Teatro was going to be torn down to make way for a new Jewel.   And then Peacocks disappeared as new apartment buildings went up along the lake front. 

In 1960, the first apartment building went up at 1440 N. Sheridan Road.  
1440 Sheridan Road, Wilmette
For next 10 years apartment buildings were added and the beautiful lake views disappeared along No Man’s Land.   In total, six apartment buildings were built during that decade.    

A convenient gas station was torn down in the early 1990s to make way for a final apartment building to be built at 1618 N. Sheridan Road.

These building units vary in size, design and price.   Most are condos – some co-ops.   Some units have been updated and are amazing, while others are pretty dated and need a facelift.  In either case the views are spectacular and the location is fantastic.  
You can walk across the street to Plaza del Lago to get lunch at Convito Italiano or to get coffee at Starbucks.   There are cute stores as well as the Jewel.  No Man's Land is not too far from downtown Wilmette or the Linden stop for the Purple Line on the CTA.  

I know it’s prime land and progress moves on.  The apartment buildings added much needed housing for folks wanting to remain in the area, and downsize out of their family homes.  A lot of my parents' friends have lived in these buildings -- and now some of my friends are making the move as well!

But I miss the No Man’s Land of my childhood.  It was a beautiful and mysterious area -- and a lot of fun. 

Sunday, June 21, 2015

7 Reasons Not to Carry a House

Some sellers told me that if they didn't get their house sold this summer at the sales price they wanted, they would take it off the market before Thanksgiving and wait to put it back on the market after the holidays.   They would "carry the house" until Spring.  Their logic: during the spring market, they certainly would be able to sell it for the higher amount.

I didn't say much.  It wasn't my plan.  Suffice to say, I'm not a big believer in carrying a house for any length of time.  I don't have the nerves for it. Through the years, while I have bought and sold four homes,  I have never owned two places simultaneously.   One time I actually lived in corporate housing for seven months, rather than owning two homes.  

If the collapse of the housing market taught me one lesson, it was this.  Prices don't always go up -- they go down, too.  Who's to say, next year's spring market is going to better than today's market?  There is nothing in Illinois's economic news that gives me tremendous comfort that the market is improving by leaps and bounds.  

As I thought about these sellers' idea, I could think of 6 other reasons why I think carrying a house is a less than ideal situation. 

  1. (see above) Prices can go down.
  2. Evidence has consistently shown, that the longer a house is on the market, the lower the offers become.  Just taking a house off the market, doesn't eliminate "market time" in the minds of buyers. Historically, buyers didn't always know the market time of a property.  Today, that information is readily available to everyone online.  The first question every buyer factors into their offer is this: "How long has this property been around."   Believe it or not, selling a property quickly is a good thing.
  3. An empty house is a disaster waiting to happen.  Pipes break, squirrels get in, the sump pump goes out, etc. etc.   Who can forget this news story from several years ago: 

    Teens turn unoccupied Winnetka home into party house, police say

  4. Time = Money.  For every day a house goes unsold, sellers incur a daily cost.   Just add up everything (taxes, mortgage interest, insurance, utilities, landscaping, snow plowing, repairs, maintenance and cleaning costs, etc. etc. etc.) and divide by 365.  That's the daily cost of carrying a house.  There is a break even point where selling the house for LESS will start to net MORE money than carrying a house.
  5. Opportunity Cost.  As long as the house is "being carried," money is being tied up in maintaining a house rather than in an income producing asset. 
  6. Depreciation -- Everything in the house depreciates with time: the roof is older, the furnace is older, the appliances are older, the windows are older.  Time puts additional wear and tear on the house and devalues the house further in the buyers' eyes.
  7. It's harder to sell an empty house.   When the house comes back on the market, it's empty.   The vast majority of homes show better when someone is living in the house. 
I'm sure if I thought about this longer, I could probably come up with more reasons.   

I worked with some sellers about 10 years ago.  For about two years, they were renovating a house while living in their old house.   As the construction was wrapping up,  we listed their old house.   A week later an offer came in that was about 90% of asking.   Without reservation, they took the first offer and closed immediately.   It didn't matter to them that they had to move into an unfinished construction site.  They were tired of having money tied up and uninvested in that first house.   While it was challenging to move quickly --  they moved very fast -- they totally understood the opportunity and real costs associated with carrying two homes.  Smart move.  The market tanked six months later.  That first house came back on the market a few years later and sold for $325,000 less than what they got.  

I learned a lot with those clients.  It's a lesson I never forgot.   

Wednesday, March 11, 2015

What's happening in Lake Forest?

Check out the City’s website for 24-7 updates and Development Projects At A Glance! 

Click on the News item next to the construction cone, “Construction Sites”, to view this new community interactive experience complete with maps, aerial views, photographs, details and contact information for each project.

Monday, February 16, 2015

Clutter Clear

Feeling snowbound by this weather, I thought it was a good time to tackle my office.  I've given myself a new year's resolution of clearing out things this year.  After the last few years of downsizing and moving my dad, my own house now needs some clearing out.   With the frigid air outside, a Monday holiday and feeling motivated, I began clearing out a box that has built up with papers in it...

What did I find by a great set of thoughts about pricing properties.  Rather than trashing it, I thought I would post it!

Pricing a listing
1. How is the market value determined?
  • Today's competition
  • Today's financing
  • Today's economic conditions
  • Buyers' perception of property condition
  • Location
  • What a Buyer is willing to pay for a property on the day they decide to buy.

2. How is the market value not determined?
  • What a seller has invested in the property.
  • What a seller needs out of the property.
  • What a seller heard their neighbor's property sold for.

3. What do sellers control?
  • Price
  • Condition of the Property
  • Access to the property

4. What do Sellers not control?
  • Market Conditions
  • Motivation level of the competition

6. What most impacts sales price?
  • The competition and their motivation to sell.
  • What a buyer is willing to pay for a home based on the properties available on the day they decide to buy.

7. Why is the competition's motivation level a factor?
  • If a competitor must sell and they drop their price, the value of the other sellers' properties go down.... from the perspective of the buyer.

Thursday, January 1, 2015

How's the Market? End of Year Recap for 2014

First let me say. Happy New Year! Hope your 2014 was a year of blessings and much happiness. Once again, I am writing my end of year recap for our local housing market on the North Shore ... 

The housing market continued to stabilize in 2014.  

There are a couple of numbers that I like to study, when determining how the market is performing. Are we selling more or less properties than last year and what is happening to the median prices? 

The thing I find most interesting about last years numbers is that while number of units sold were down - and down fairly substantially from 2013 -- the median sales price went up. 

It varies, of course, by community/price point, etc. I believe this is an indication that prices have stabilized and have begun to come back to more normal levels. It could also be that more and more of the distressed properties are being dealt with and not causing property values to go down any more.

The numbers that most Realtors like to follow are the inventory levels. Inventory is measured in months. What a "month's inventory" means is this: if sales were keeping pace with new properties coming on the market, how many months would it take to sell the outstanding inventory? It's a better way of interpreting the unit count, because it reflects how quickly certain price points are moving or stagnating.

A healthy balanced market is around 6-10 months of inventory. An unbalanced sellers' market is about 0-8 months of inventory. And a buyers’ market is considered anything over 8 months of inventory.

Overall, the trend is fantastic. We saw some remarkable improvements this year. (One caution, though, is that sellers often take their homes off the market in December, so inventory levels are generally lower during the winter months and start to go back up in the Spring. These numbers are absolute and not seasonally adjusted to reflect this reality.)

source of data for the charts: Midwest Real Estate Data
These charts only present the numbers in aggregate. Various price points have higher or lower levels of inventory.

While 2014 was a more stable and less dramatic year than we previously saw in 2013 and even 2012, it's difficult to predict what's going to happen in 2015 – there are just so many outside variables that will determine how the housing market will play out on the North Shore this year.

There are trends afoot that make the sales of our homes on the North Shore a little more unpredictable. The biggest question mark to me - does our current inventory match our current demand?
A study by Harris Poll indicated that, for the same price, 41% percent of Americans would prefer to buy a newly built home instead of an existing home. Twenty one percent prefer an existing home while thirty eight percent didn’t have a preference.

That said, of those desiring a new home only forty six percent are willing to pay at least 20 percent extra to purchase a new home versus a comparable existing home.

It makes me wonder what that means for our older inventory in the established communities along the North Shore.

I thought this article in Chicago Agent was worth sharing: 3 Important Trends To Follow For the 2015 Housing Market.  To me, the point of interest is this: Housing affordability is on the decline because wages aren’t keeping pace. There is also the prediction that interest rates will finally see an uptick after years of historic lows.

Another trend is demographic. To quote an article from US News and World Report:

"For years, many millennials have postponed homeownership in favor of renting, but that may also change next year as a growing number of Gen Yers start families and seek more stability.   By the end of 2015, millennial buyers will represent the largest group of homebuyers, taking over from Generation X...They prefer smaller units closer to the urban core, so it will be interesting to see whether they follow the time-honored path towards the periphery of the metro...

"Baby boomers are also likely to make a move in 2015. ...With fewer homes underwater, they're finally in a position to sell."

Regardless of the health of the market, my hope for 2014 is that people move and change homes based on what is in the best interest of their own families. I’m a big believer that decisions should not be driven by fears or uncertainty -- if getting a bigger house or if downsizing are the right answers, then I think it’s best to move forward and live one's life.
I read good article that highlights this: Stop thinking of your home as an investment
As some of my readers know, I publish a monthly newsletter, How's the Market? Here's an example of one of my newsletters. If you'd like to be on my mailing list, I encourage you to sign up. (You can always opt out at any time.)

Finally, on a personal note, I would like to thank my clients who have helped to make 2014, a successful year for me.  As the saying goes, "Home is where our stories begin."   As a real estate broker, there is no greater privilege than to have the satisfaction of knowing, you’ve made a difference in peoples' lives and helped clients with their stories.

Wishing you and yours all the best in 2015!

* * * *

”We spend January 1 walking through our lives, room by room, drawing up a list of work to be done, cracks to be patched. Maybe this year, to balance the list, we ought to walk through the rooms of our lives... not looking for flaws, but for potential.” – Ellen Goodman 

It's 2015 -- new laws; new rules