Allyson Hoffman RE/MAX North 847-849-8016 Fax: 847-400-0881 1240 Meadow Road NorthbrookIL60062
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Presented by: Allyson Hoffman
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North Shore Suburban Monthly Market Update
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The rut for sellers in the North Suburban Chicago area does not seem to be getting any shallower. Although there are a certain number of homes selling, the number of new listings is still outpacing the rate of sales causing inventory levels to continue to climb – week after week.
This is definitely good news for buyers with prices now averaging 13% lower in freestanding homes and 3-4% lower in attached homes than at this time in 2007. The bright spot, if you can call it that, remains the average market time which still hovers at an unchanged average of 180 days for all types of properties across the board. Nonetheless, new listings and those returning to the market still outpace the 2007 rate with closed sales off by nearly 30% and new contracts and pending sales off by 19-25% as compared to a year ago. We still show 16-17 homes available to every one that sells and a projected 71 weeks worth of property for sale based upon the rate at which it is being sold.
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Northern Shore Suburban Chicago Attached Housing
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Date
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New
Listings
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Closed
Sales
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Average
Closed
Price
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Average
Market
Time
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12 Mo
Price
Change
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| 5/08 |
2195
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409
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$360,664
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$329,604
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180
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-3.00%
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| 5/07 |
2414
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731
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$350,416
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$338,136
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143
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Northern Shore Suburban Chicago Detached Housing
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Date
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New
Listings
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Closed
Sales
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Average
Closed
Price
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Average
Market
Time
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12 Mo
Price
Change
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| 5/08 |
4117
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924
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$882,022
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$776,383
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182
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-13.00%
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| 5/07 |
4631
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1109
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$985,655
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$893,884
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175
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*This representation is based in whole or in part on data supplied by various Participants in the MREDLLC for the period 1/1/08 through 5/31/08. MREDLLC does not guarantee nor is it in any way responsible for its accuracy. Data maintained by the MREDLLC may not reflect all real estate activity in the market.
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Two additional considerations affecting the market include a growing number of homes in foreclosure or pre-foreclosure offered at discounted short sale pricing and more stringent processing standards for obtaining mortgages. Today’s lending environment is definitely more complex than it was in the recent past, not so much as a result of changing interest rates, but more so as the result of additional documentation and verifications, even for the most creditworthy buyers with the highest credit scores. The crackdown on the banking industry is affecting borrowers. Mortgages are getting approved, but most are now unpinned by strongly documented buyer qualifications. Those interested in buying will have an abundant selection of properties from which to choose and with interest rates still quite low, especially for conventional borrowers, this is the time to consider making a move before inflation pressures potentially lead to higher interest rates and corresponding higher costs of ownership.
Sellers should definitely plan for long market times and remember that the critical components of success in this market include extremely good pricing, extremely good exposure, extremely good condition and very easy access for showing. Accurate pricing should be based upon sales occurring within the past 2-3 months and only within your segment of the market, if possible. Successful sellers are typically the ones offering “the most for the least”. Conversely, all prospective buyers should sincerely consider capitalizing on today’s market conditions with abundant choices and clearly lower pricing. If you are considering buying or selling or, alternately, if you are just interested in the property value of your home or a home that interests you, please feel free to send an email request to me at allyson@allyson.com and I will gladly set up a personalized webpage with data designed specifically for your home, a home that interests you or for a personalized new home search profile that matches your unique criteria.
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Why Smart Home Buyers Are No Longer Waiting To Buy
In today's new real estate market the time for hesitation is past. Now is the time for action. To take advantage of the new market, the reality is clear—don't wait:
- If you are ready to move to a home where you would rather live;
- If you can afford a conventional fixed-rate loan;
- If you plan to live there or own it for several years; now is the right time to move or buy a first home, second home or rental.
Waiting rarely pays off for many reasons. In this issue of our newsletter, we'll share with you what we've learned from experience.
Recent Sales
Homes are selling in our area. Yes, there is more inventory. Yes, time on market is longer. Yes, loan requirements are tighter. Yes, there are more short sales, bank-owned foreclosures and rental bargains that pull average prices lower. But look beyond national headlines. Our local housing market is not a “bust,” “collapse,” “meltdown,” or “crash” of zero sales. In reality, good properties—high-end, middle-market, even low-end—are selling (ask us for the latest area sales figures), especially with more sellers being realistic about their asking prices to compete. Waiting simply misses out on these good values.
New Buyers
Demand is increasing because today's market has attracted “new buyers,” such as pent-up “should-have-moved” locals who put off moving in recent years; boomers with equity looking for second homes; international buyers who see properties priced to sell and enjoy favorable exchange rates; first-timers with parent and grandparent support; resized new construction that's smaller, lower-priced; long-term investors with a goal to “buy low, sell high” years from now. These buyers are buying now.
Interest Rates
Even though rates are around historic lows, demand is what makes home prices stabilize, demand makes sellers less willing to negotiate and demand pushes interest rates higher. Higher interest rates eliminate savings from lower prices. For example, if you bought a $218,900 home 12 months ago at 5.5%, your monthly payment (principal and interest) would be $994 (assume 20% down payment, 30-year fixed-rate loan). If you bought the same home today at $197,010 (assume a 10% price drop) at 6% your monthly payment would be $994. In addition, temporary increases of jumbo loan limits to $729,750 (highest-price markets) expire December 31, 2008. By waiting, any savings from a lower price may be offset by higher financing costs.
Bottoms Up?
No one can pinpoint the “bottom of the market”—except historians with hindsight. Why? Housing markets don't “bottom.” Instead, after a period of price declines, leading indicators gradually correct: Transaction volumes increase, days on market decline, prices become steady, inventory sells off, the range between list price and sales price shrinks, builders withdraw incentives as land prices and material costs rise. Indicators reflect the rebound as the housing market adjusts—but the best properties are already gone.
Simply put, the best time to buy is now, as long as you're buying the right home, at the right price and on the right terms. Call us.
My Real Estate CyberTips is another great resource.
It's not just about real estate!
Real Estate CyberTips Newsletter
5 Questions Every Savvy Home Buyer Should Be Asking Now
1. Is our rent equal to a loan payment? If you can afford to buy, it can give you one bonus that renting cannot—the lucrative tax breaks that come with owning a home:
- Deductions for payments of mortgage interest, loan discount points and real estate taxes.
- Home-office deductions for qualified owners.
- Deductions for expenses if you rent out your property.
- Home-sale capital-gains exclusion—profits up to $500,000 tax-free!
2. Are prices in our preferred area steady? In many areas of the country—even in areas with high foreclosure rates—there are neighborhoods where homes are holding their value or increasing in value while price decline is slowing.
3. Will our equity go further where homes cost less? By moving to a place where homes are less expensive—and general living costs are lower—your money will go a lot further a lot longer.
4. Will we live in this home for several years? Financial planners often advise buyers to think of real estate as you would any other large investment: The longer you hold your home before selling, the higher the probability you'll ride out any downturn and come out ahead on price when you decide to sell.
5. Is this the perfect home for us? The schools are fantastic. The proximity to your office, gym, favorite stores can't be beat. You love the area and the home, and you won't find another one like it. In a better market, you would most likely have much more competition for that home.
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For the uninformed, blogging is hitting the Internet today and making a real impact! What is a blog? An easy explanation of this is a WEB LOG or a journal on the web … it’s a place where folks can “voice” their thoughts, share ideas, or comment on those of others. The Northern Suburbs of Chicago now has such a blog where new items of interest will be posted and where comments can be made. Topics can range from those related to real estate and community highlights to local events of interest or anything personal or business related that might be perceived as worthwhile information for public knowledge, discussion and/or use. It’s even possible to subscribe to a blog of interest and receive textual updates on your iPod! Check out the latest updates for the Northern Chicago Suburbs at:
http://www.realestatenorthernillinois.com/blog.asp
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RE/MAX North, 1240 Meadow Road, Northbrook, IL, 60062
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