Keeping up with Chicago's North Shore Real Estate Market!

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Sunday, January 31, 2016

How's the Market? As of February 1, 2016

January seemed to move so quickly.  While I still have my resolutions in mind, I think I need to focus on them on more!

And how was the real estate market in January?

The first report shows units sold, the second presents the median prices.  

As you can see, the inventory is still pretty high in communities where there are a lot of high end properties (Kenilworth, Winnetka and Lake Forest).  But there is actually a shortage of inventory in all the other communities.  The months of inventory is the probably the best barometer of the health of a market.  Anything less than 6 months is considered a sellers' market -- anything more than 8 months is considered a buyers' market.  As you can see, it's somewhat inconsistent on the North Shore.     The median sales price is holding steady in most of the communities.

In the next chart I show the high-end sales for each community.  Evanston had the highest sale with wonderful Jerome Cerny home with spectacular lake front views. 

There are currently 197 houses for sale on the North Shore that are priced greater than $2M.   During the month of January, 9 houses closed in this price range:

Sold this Month
# for Sale
Highland Park
Lake Forest
Lake Bluff

Source: MRED (Midwest Real Estate Data) Multiple Listing Service

Thursday, January 28, 2016

Green Tip of the Month - reuse ink cartridges

Refilling and reusing ink cartridges is a simple way to reduce tons of annual waste.

Amazing Facts:
  1. In one year, if the world’s discarded cartridges were stacked end-to-end, they would circle the Earth more than three times!
  2. It takes about a gallon of oil to make a new toner cartridge so refilling will help save oil. 
  3. Almost eight cartridges are thrown away per second in the United States. 
  4. In North America alone, more than 350 million cartridges per year are discarded in our landfills, and that number increases by 12% annually. 
  5. Every remanufactured cartridge saves nearly 3.5 pounds of solid waste from being deposited in landfills. 
  6. Seventy percent of used cartridges throughout the world are currently being thrown out.

Source: Cartridge World

Saturday, January 23, 2016

An inside look at Millennial credit profiles

[Infographic] An inside look at Millennial credit profiles: If only 3% of Millennials have taken out a mortgage, what are they spending their money on? A new infographic from online lender Avant dives into the question and answers what makes this young demographic different from its predecessors.

Thursday, January 21, 2016

Are there changes in housing preferences in Lake Forest?

Recently I was working on a market analysis for a potential Lake Forest client. I thought it would be helpful to visually show them the market trends in the last few years, so I prepared this chart. 

Even for me it was an eyeopening chart to study and I wanted to make some sense of it. While I don't have the answers, these are my thoughts.

The two things I noticed:

  1. The number of units sold have gone down since 2013. I looked at this more closely. One interesting aspect of this is that the number of distressed properties (i.e., foreclosures, short sales, etc.) that have sold during this period have also gone down. Specifically:
In 2012 - There were 38 distressed properties that were sold. That number continued to drop:
2013: 36
2014: 24
2015: 14
So what does this mean? One can infer, that perhaps we had a spike of units sold in 2013, because people were buying up the distressed properties. Perhaps that spike was an anomaly and we are receding to a "new normal" for sales in our market.

2. Attached housing (e.g., condos, townhouses, etc.) as a percentage of the units sold have gone up.

I think this is the most interesting fact. While in 2013, we sold 45 more total units in Lake Forest than at the peak in 2005, attached housing as a percentage of the sales went from 13% to 24% of the total sales. In absolute numbers we sold less houses in 2013 than 2005. This trend seems to indicate that sellers are downsizing and looking for maintenance free housing.

These are the two key observations that I notice. I'd be curious to know what my readers think?

source of information: Midwest Real Estate Data LLC

Thursday, January 14, 2016

When is the best time to sell my home?

When is the best time to sell?
I get this question often.  The answer is, well:

January is the month when families learn they are being relocated from out of area. I often get showings on my listings in January.  And these are not "looky-loos."  They have to buy!

February after the SuperBowl -- isn't that the best time? People come out from their sports fix and begin touring homes at open houses.

March after Spring break. People are rested and thinking about moving and want to get settled before summer.

April-May -- Spring Market - WOW busy time. Properties and buyers are in full force out looking.  Inventory comes pouring on the market, there are a lot of properties from which to choose.

June - August - It's such great weather, so folks love to look and see what the house looks like in summer.  And they want to get settled before school starts.

September - People are back from their summer break and are out looking. They want to be in their new homes just in time for the holidays.

October - December -- People, who finally got their own home under contract, need to find a new home pronto. They are really motivated buyers and there are less homes to chose from. It's easier to get your home noticed.

The prevailing thought on the North Shore is the best time to sell is in the spring. 

Yes, there are more buyers -- but keep in mind, there are also a lot more competing properties. If your home isn't a WOW house, it's hard to stand out during the Spring Market. 

My opinion?

The best time to sell is when you are ready to sell - both emotionally and financially.   Selling one's home is a big deal and requires tremendous patience, fortitude and commitment. It requires getting the home ready,  so that it stands out as a wonderful home for another family.

People buy real estate all times of the year.  Sell when you're ready to move.

Thursday, January 7, 2016

Top 10 Mistakes Sellers Make When Selling Their Home

Thinking about selling your home in 2016?  Selling one's home is a BIG DEAL and takes tremendous discipline, energy and resolve.   Don't make these mistakes if you are thinking about making a move.

10. Not being clear about why you're selling the house.
Do you NEED to sell or do you WANT to sell?  Too often sellers toy with the idea of selling their home.  They have this "let's test the market..." logic.  Selling a home is a major undertaking and it wastes everyone's time and resources to merely toy with the idea of selling a home.   Be clear about your reasons.    

It's been my experience that there are two types of sellers: (1) those who want want their home to sell and (2) those who want a buyer to want their home.   
You might find a buyer, who wants your home as is.  But if you really want to move, you've got to want your home to sell!!!

9. Forgetting to pay your final mortgage payment before the close. 
Sometimes sellers think that since they're closing soon, they don't need to keep paying their mortgage.  Calculations are based on the close date.  If that happens to be on the 5th day of the month and the mortgage is due on the 1st -- not only would it throw off the calculations, but the seller could incur penalties and a hit to their credit rating, if they fail to make that monthly payment.  

8. Staying in the house during showings (and inspections). 
Buyers want to be able to view and study the house by themselves.  They may move through it quickly or linger for a while.   It's very disorienting for buyers to have the owners around during a showing.  It has been my experience when the owners are there, the buyers want to leave quickly and get out of the house.  It makes them very uncomfortable and they tend to reject the house early.

6. Leaving the house disorganized, dirty, smelly and/or cluttered before a showing.
Would you want to buy a house that is a mess or smells?  Consider your pets as well.  Enough said. 

5. Not preparing the house for putting it on the market.
Getting the house ready to put on the market is a lot of work.  It involves both the interior -- and the exterior.  (Sometimes buyers will drive by a house before they'll come inside.  If they don't like the exterior they won't bother to come back.)   I wrote about this a while ago:
Property Condition and Curb Appeal.

4. Choosing a real estate agent whose marketing focusses on print ads rather than on a robust Internet strategy.
Perhaps you see some of these beautiful ads that are in Forest and Bluff or North Shore Weekend.   They're very pretty.  Did you know that less than 7% of the buyers find their home through a print ad?  Don't be seduced by an agent's print ads, when selecting a real estate agent.  The reality is those print ads are essentially image campaigns for the agent -- not marketing ads for the property.   

The single most important marketing source for homes is on the Internet -- over 80% of buyers start there when they are looking for a property.  When selecting an agent, study how they market the property on-line!  Study the quality of their photographs and online marketing.  That's where the buyers are looking -- not in some dated publication. 

3. Being "insulted" by an offer.
I always am amazed when a seller says that to me.  Of all the over 1500 homes for sale on the North Shore, this buyer picked your home as the one they want to buy!!!   They liked your home so much, that they took the time to write an offer.  How insulting can that possibly be?  

Now when a buyer drives up to your home and won't even come inside to look (which, by the way, I've had clients do) --- now that's an insult.  

An offer is never an insult -- an offer is a starting point for negotiations.   You don't have to like the offer.  But I strongly recommend that you start with gratitude, when someone likes your home enough to buy it.

3. Letting your house linger on the market at the wrong price.  
Research has consistently shown that the longer the house is the on the market, the lower the offers become.  Smart sellers react quickly when their house is not getting showings or second showings.  A quick sale is a wonderful thing!

2. Ignoring the feedback that the buyers and their agents are providing.
You want to sell your house.  Your buyers are telling you why they're not interested in your house.  Listen to them.  Selling one's house means letting go... it's no longer YOUR home -- it's a commodity in the marketplace.   As cold and as unemotional as that sounds -- that's the reality.   As a seller you need to step back from all the feelings and sentiment about your home and listen to buyer feedback.  

Then respond to it.  If they're telling you multiple times it's overpriced, then reduce the price.   If they're telling you multiple times that the house has too much wallpaper, then either take down the wallpaper or offer a decorating credit or something.   Listen to the feedback.  These are the buyers in your price range -- they're looking at dozens of houses and your house is coming up short compared to others.  

1. Listing the house at too high a price.
I know I sound like a broken record on this point, but PRICE is the number 1 factor that goes into a buyer's decision on purchasing.   I've had sellers say, "I need to leave room to negotiate." NO, no no no.   Almost always -- homes sell for fair market value.  Figuring out the FMV and pricing accordingly is the best way to get your house sold for top dollar.   Pricing your home correctly from day 1 is the most strategic action a seller can make in getting their home sold!

So if you're thinking about selling your home this year, don't make these mistakes!   

Monday, January 4, 2016

How's the Market? End of Year Recap for 2015

First let me say. Happy New Year! I hope your 2015 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 held its own in 2015.  It varied quite a bit along the North Shore, as the following charts would indicate.

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?

Every community has its own story.  Evanston is going like gangbusters.  It appears more that the median is going down -- which would suggest that starter and/or downsizing properties are selling more robustly.  

There were less sales in Kenilworth and Lake Forest but the median price went up.  This could suggest that the there is not as much affordable housing -- or perhaps the majority of homes are still overpriced.  

The opposite is true with Lake Bluff.   There were substantially more sales, but a lower median price.  

While this data is interesting, 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.

Again, the situation varies from town to town.  There is real shortage of inventory in Evanston, Lake Bluff, Northfield and Wilmette, while there is an oversupply of inventory is Kenilworth and Lake Forest. 

A bigger concern is the shortage of inventory for attached housing all along the North Shore. 

(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.

With the US presidential election and Illinois's fiscal realities it's difficult to predict what's going to happen in 2016 – 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?   The data would suggest that there is a shortage of attached housing.   We continue to have demand for newer construction.  It makes me wonder what that means for our older, high-end inventory in the established communities along the North Shore.

I thought this article in Realtor Magazine was worth sharing: The 5 Real Estate Trends that Will Shape 2016.   While the whole article was interesting, to me, the point of interest is this: Higher mortgage rates will affect high-cost markets the most.

To quote an article from NBC News,

"Would-be homebuyers — especially first-timers — had an uphill climb in 2015, with tight lending standards, high rents and down payment requirements keeping many on the sidelines. Unfortunately, experts say, it's not going to get any easier next year.

The complex U.S. housing market is continuing to recover from the severe downturn it saw during last decade's recession, but it's a spotty rebound that is forcing many Americans to devote more of their income to keeping a roof over their heads."

If you'd like to read the whole article, it's pretty interesting: Will Housing Logjam Bust in 2016? Don't Bet the Mortgage or Rent on It.

The National Association of Realtors publishes an annual report about home buyers and sellers.  This info graphic summarizes some of their findings.  I hasten to add this represents all real estate is local and these numbers reflect national averages.

Regardless of the health of the market, my hope for 2016 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.

As some of my readers know, I publish a monthly newsletter, How's the Market?  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 2016, 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 2016!

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“What the new year brings to you will depend a great deal on what you bring to the new year.”
                                                    ― Vern McLellan