Judy Newton Used My Blog Title!

Yay! Sort of....

Chicago Case Shiller Condo Index rises for 1st time in 9 months!

 

1412 Hinman #2W, Open Sunday from 2-4

If you can’t imagine living in a tiny, new construction condo with Metra views, come to the part of downtown Evanston where hardwood floor & charm are standard. Still walking distance to restaurants, shops, lake, transportation & NU but away from noise & visitors can park on the street for free. Find yourself in this sunny 2 bedroom w/updated appliances, big closets & garage parking in a quiet courtyard building on a street with trees!

 New Price $170,000!

 

The Impace of Distressed Properties on Neighboring Values

by The KCM Crew on May 6, 2011 · 0 comments

in For Sellers,Foreclosures,Pricing

• 
• 271Share
• 
• inShare

The banks are finally getting their foreclosure paperwork in order. They will start bringing larger numbers of distressed properties to market over the next six months. We must realize that this influx of discounted inventory will have an impact on the values of neighboring homes. How large an impact? 

According to RealtyTrac a foreclosure sells for 59% of the value of a similar non-distressed property. Therefore, this foreclosure inventory will affect values in two ways:

1.) As Discounted Competition

Obviously, a segment of purchasers will prefer the discounted property based on price alone. Even if the distressed property is in need of substantial repair, the buyer is getting the property at a 41% discount. Price is determined by supply and demand. Distressed properties will eat up a portion of the demand for housing and that will put downward pressure on all values. 

2.) As Comparable Sales on Your Appraisal

Even after you put your house into contract, this distressed inventory can still impact your transaction. Unless your purchaser is paying all cash, there will be an appraisal of your property by the bank who is giving the mortgage to your buyer to complete the purchase. Because of the volume of distressed properties selling in almost every market, banks are instructing appraisers to use these discounted sales in determining values of non-distressed sales. We can argue the logic of this some other time. At this point, we must simply be aware that this is taking place.

Bottom Line

Over the next several months, banks will be moving substantial numbers of foreclosures onto the market. This will impact values of other homes in the region. If you are considering selling, now might be the best time. You want to be sold and closed before these properties come to market and impact your price.

Infestation Continued

A Chicago condo board is suing the resident of a North Side high-rise because it claims she is being uncooperative in its efforts to eradicate more than 500 bedbugs in her unit, according to Crain's Chicago Business. The suit said her failure to cooperate has hampered efforts to keep the bugs from finding their way to other residences in the building.

Infestations

BY INMAN NEWS, FRIDAY, APRIL 29, 2011.

Inman News™

1. Opossum

A Harris County, Texas, real estate brokerage is being sued by a former tenant for negligence, among other things, because the tenant contracted typhus after moving into a home rented by the agent.

According to UltimateMontrose.com, an affiliate of the Houston Chronicle, the suit says that in 2009 the tenant was admitted to a hospital with typhus after an ongoing opossum infestation of the house brought fleas into the home. She charges that the defendants' failure to properly manage the house exposed her to an unreasonable risk.

2. Bats

Homes that have gone into foreclosure and sit unoccupied often suffer many indignities. However, a foreclosed house in Tifton, Ga., has more than its share of problems -- perhaps 20,000 more.

The house, in the town's historic district, has been taken over by about 20,000 Mexican free-tailed bats, which have filled the interior and exterior walls with guano, according to a representative of an animal-removal service, who described the accumulated bat waste as a "cocktail of pathogens."

The Tifton Gazette reported that the house has been unoccupied (by humans) for more than a decade; city officials recently declared the house unfit for human habitation until the bats are gone. (The animal-removal service will install one-way valves that will let the bats leave but will block their return to the house, the paper said.)

The paper quoted a local real estate agent as saying she had a buyer who is interested in the foreclosed home, which is reportedly owned by a lender in California.

And I thought the squirrels nesting in the attic of my 4 flat were bad.

Discounted Prices Chip Away High Inventories

Daily Real Estate News  |  April 28, 2011  | 

One key step to the housing recovery is already occurring, economists and real estate agents say. That is a drop in the high inventories of homes for sale that are lingering on the market in areas hardest hit by foreclosures. 

Clearing away the inventory of foreclosures is crucial to turning around the market, since foreclosures and distressed homes can weigh heavily on home prices, industry insiders say.

Economists say home prices will stabilize as the supply of these bargain-priced homes decrease. In turn, more buyers and sellers will get more confident and return to the market, and home prices will begin to rise. 

Investors are helping to clear away the glut of foreclosures by taking advantage of ultra low prices in Detroit, Las Vegas, Miami, Phoenix, and Tampa. In those five cities, such sales have helped to shrink the combined supply of unsold homes by 13 percent over the past year, according to an analysis by the Associated Press. 

"If we were to see several consecutive months of supply getting smaller, it would point to an improving housing market," says Celia Chen, senior director at Moody's Analytics. "Even if it is investors buying them, they are renting them out in hopes that prices in the next several years will rise."

However, the housing market isn’t out of the clear quite yet, economists caution. A second wave of foreclosures looms — foreclosures that had been delayed by banks and backlogged courts. 

"The problems are still there," says Mark Vitner, senior economist at Wells Fargo. "There are fewer early-stage delinquencies, so we are moving in the right direction. But the slowdown in foreclosures is just drawing the process out."

Source: “Bargain Prices Help Reduce Glut of Foreclosures,” Associated Press (April 21, 2011)

Cheaper to Buy Than Rent? In Most Cities, 'Yes'

Daily Real Estate News  |  April 28, 2011  |   

Americans in 39 of the country’s 50 largest cities are finding it’s cheaper to buy a home than rent one, according to Trulia’s second quarter Rent vs. Buy index. In its index, Trulia compared the cost of buying and renting a two-bedroom apartment, condo, or town home in the 50 largest cities in the country. 

When compared to the previous quarter, buying a home has become even more affordable than renting. Trulia found last quarter that in 72 percent of the cities it was better to buy than rent, but this quarter the number has grown to 78 percent of the cities studied.

Rising rents, falling home prices, and low mortgage rates have made home ownership make more financial sense in most areas of the country, according to Trulia.

"With home prices nearing a double dip and more foreclosures expected to flood the housing market over the next two years, the decision between renting and buying a home across most of the country has clearly moved in favor of buying," said Ken Shuman, Trulia's spokesperson, in a statement.

The cities where renting was a less costly option than home ownership were in New York, Fort Worth, Texas, and Kansas City, Mo. 

Where It’s Cheapest to Buy vs. Rent

The following is a list of the top 12 cities where it’s cheapest to buy a home than rent. 

1. Las Vegas
2. Phoenix
3. Arlington, Texas
4. Fresno, Calif.
5. Miami
6. Mesa, Ariz.
7. Jacksonville, Fla.
8. Sacramento, Calif.
9. Detroit
10. Omaha, Neb.
11. San Antonio
12. El Paso, Texas

Source: “Trulia Reveals Trend Towards Homeownership Where Affordability to Buy Versus Rent Extends to Almost Four in Five Major U.S. Cities,” Trulia.com (April 28, 2011)

Case-Shiller Index for Chicago falls 2.2% in February, condos down 3.1%

Chicago’s Case-Shiller Index for February fell 2.2% from January. The index is down 7.6% from February 2010. The housing index is back to its June 2001 level. The index is based on resales of houses in the Chicago Metro Area. It’s published with a 2 month lag.

Chicago's Case-Shiller Indices February 2010 to February 2011

The Chicago Case-Shiller Condominium Index for February dropped 3.1% from January. The condo index is down 13.8% from February 2010. The drop from a year earlier is the second largest since the index started. The largest drop was in January when the index was down 13.9% from a year earlier. The condo index is back to its July 2000 level.

Similar Posts:

• Chicago Case-Shiller Condo Index has Record Declines in January 2011
• Case-Shiller Chicago Index finishes 2010 down 7.4%, condo index down 11.9%
• Case-Shiller Index for Chicago drops 1%, condos drop 2.6%
• Chicago Case-Shiller Index for March drops 2.3% for houses, 4.8% for condos
• Chicago Case-Shiller Index down 7.2% for 2009, half that of 2008

from Fran Bailey, Realtor, Baird & Warner Lincoln Park - Chicago Metro ... by Fran Bailey, Chicago Realtor

Foreclosures (part 8,977)

Proposed Laws Say Foreclosures Count—and Don’t Count

Posted Apr 13, 2011 at 12:25 PM

 

By Dennis Rodkin

Separate bills working their way through the Illinois House and Senate contradict one another on a central point. One says distressed properties in a surrounding neighborhood should be considered in an evaluation of a home’s value; the other says that information is not relevant.

In the Senate, SB1230 would require that foreclosures be factored in when the Cook County Board of Review is considering a homeowner’s appeal of the property’s tax bill. (This rule has been in effect in the other 101 counties in Illinois since last year.) “By definition, an assessment can’t accurately reflect the market value of a property [from which its tax bill is calculated] without including all of the sales in the local market,” says Senator Chris Lauzen (R-Aurora), the sponsor of the bill, which was moved to the Senate’s Revenue and Finance Committee on Monday.

Meanwhile, over in the House, HB0092 would require that appraisers licensed in Illinois disregard nearby foreclosures when calculating a home’s appraised value. “Foreclosures deteriorate the value of other homes,” says Representative La Shawn Ford (D-Chicago), the bill’s sponsor, who is a real-estate agent. “What this [bill] would do is set the foreclosed properties aside in their own category, so we can get a real look at home values in Illinois.” The bill went to the House’s Rules Committee in mid-March.

The two bills look at different aspects of property values. The Senate bill is about giving homeowners a fair break on their taxes if surrounding foreclosures have adversely impacted their property values, while the House bill is designed to boost a home’s value when it’s up for sale or the owner wants to refinance the mortgage.

But which is it going to be? Do foreclosures count in a home’s value, or don’t they?

Lauzen says that Ford’s bill “comes from a legitimate desire to help constituents, but might set up false market values.” Foreclosed properties are in direct competition with nondistressed homes for buyers’ attention, so putting them in their own category would artificially inflate the value of nondistressed homes—potentially setting up another round of losses. But Ford counters that removing foreclosures in appraisers’ evaluations can help prevent another round of foreclosures: Appraisals will then be higher, so homeowners will qualify for refinancing at today’s very low interest rates, bringing down their payments and “letting them stay in their homes instead of losing them in foreclosure,” he says.

Greg St. Aubin, the director of governmental affairs for the Illinois Association of Realtors, considers both bills laudable attempts by “legislators to look for potential legislative solutions to what is obviously a very difficult and wide-ranging problem: foreclosures.” He notes that these two bills are among eight different foreclosure-related bills in the General Assembly during this spring legislative season. Other bills cover everything from fees charged foreclosing lenders to what powers a municipality has to take over a vacant or foreclosed property.

St. Aubin’s organization backs SB 1230 (and backed its predecessor that applies to the rest of the state) and initially opposed HB0092, before several members asked for more review of it, he says. The two bills do seem to be at cross-purposes, he acknowledges. “But that’s OK; it’s part of the process for different legislators to come at something from completely different angles—as long as it’s sorted out in the legislative process.”

Which perspective will prevail? It’s too soon to say, but either way, foreclosures are a still-evolving reality in the real-estate market. “The bottom line is that there is really only so much the state can do to solve that problem,” St. Aubin says. “But that’s not going to stop legislators from trying.”

 

Foreclosures (part 8,976)

by The KCM Crew

 

Headlines created by the numerous foreclosure reports often contradict each other. One headline announces foreclosures are rising while the next talks about the decrease in foreclosure numbers. This has led to tremendous confusion regarding the issue. Let’s bring some clarity to the data. There are five individual stages of the foreclosure process that are reported:

1.) 90+ Day Delinquencies

Once a homeowner falls three months behind on their payments, most financial institutions count them in their foreclosure numbers. Why? Less than 2% of those who fall that far behind ever catch up in their payments. The other 98% will end up as a distressed property (foreclosure or short sale). Homeowners in this category don’t always receive a foreclosure notice immediately. In some cases, homeowners who have not paid their mortgage in 12 months have not yet received a notice of foreclosure.

2.) Homes in the foreclosure process

These homes have received a formal notice which officially starts the foreclosure process. In different states, because of court procedures, it takes varying time frames to complete this process.

3.) Homes repossessed by the bank

These homes have finished the foreclosure process and are now owned by the bank. These homes are known as REOs (Real Estate Owned).

4.) REOs placed on the market

These are the REOs that banks bring to market. Many come to market quickly. Others must be refurbished before being put up for sale.

5.) REOs Sold

Obviously, these are the REOs that actually sell.

This seems very straight forward. Why is there so much confusion?

Here’s an example. Just a few weeks ago the major daily newspaper on Long Island, NY had a headline that announced delinquencies were up to over 10% of all homes. One-in-ten homes on Long Island were 90+ days delinquent. That was a major increase from the year before. Exactly seven days later, the same newspaper headlined a story that foreclosures on Long Island were down dramatically. That seems a contradiction. Though both headlines were accurate, they led to confusion.

Let’s dig a little deeper into the data. Yes, the percentage of homes being foreclosed on has decreased. Why? The court systems in NY are now taking almost a year to process a foreclosure. There are not less homes eligible for foreclosure. They are just caught in a slow moving pipeline. Likewise, there are not a growing number of delinquencies. These homes are just not working their way through the process. The delinquency numbers would be much lower if there wasn’t a logjam in the court systems.

Bottom Line

To truly understand the distressed property situation in your market and what impact it may have on prices, contact a local real estate professional. They should be able to simply and effectively explain with the use of strong visuals (charts & graphs) what is happening in your area and how it impacts you.