Archive for Chicago Market Information
July Existing-Home Sales Fall as Expected but Prices Rise
Posted by: | CommentsFrom the National Association of Realtors:
Existing-home sales were sharply lower in July following expiration of the home buyer tax credit but home prices continued to gain, according to the National Association of Realtors®.
Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, dropped 27.2 percent to a seasonally adjusted annual rate of 3.83 million units in July from a downwardly revised 5.26 million in June, and are 25.5 percent below the 5.14 million-unit level in July 2009.
Sales are at the lowest level since the total existing-home sales series launched in 1999, and single family sales – accounting for the bulk of transactions – are at the lowest level since May of 1995.
Lawrence Yun, NAR chief economist, said a soft sales pace likely will continue for a few additional months. “Consumers rationally jumped into the market before the deadline for the home buyer tax credit expired. Since May, after the deadline, contract signings have been notably lower and a pause period for home sales is likely to last through September,” he said. “However, given the rock-bottom mortgage interest rates and historically high housing affordability conditions, the pace of a sales recovery could pick up quickly, provided the economy consistently adds jobs.
“Even with sales pausing for a few months, annual sales are expected to reach 5 million in 2010 because of healthy activity in the first half of the year. To place in perspective, annual sales averaged 4.9 million in the past 20 years, and 4.4 million over the past 30 years,” Yun said.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 4.56 percent in July from 4.74 percent in June; the rate was 5.22 percent in July 2009. Last week, Freddie Mac reported the 30-year fixed was down to 4.42 percent.
The national median existing-home price2 for all housing types was $182,600 in July, up 0.7 percent from a year ago. Distressed home sales are unchanged from June, accounting for 32 percent of transactions in July; they were 31 percent in July 2009.3
“Thanks to the home buyer tax credit, home values have been stable for the past 18 months despite heavy job losses,” Yun said. “Over the short term, high supply in relation to demand clearly favors buyers. However, given that home values are back in line relative to income, and from very low new-home construction, there is not likely to be any measurable change in home prices going forward.”
Total housing inventory at the end of July increased 2.5 percent to 3.98 million existing homes available for sale, which represents a 12.5-month supply4 at the current sales pace, up from an 8.9-month supply in June. Raw unsold inventory is still 12.9 percent below the record of 4.58 million in July 2008.
NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz., said there are great opportunities now for buyers who weren’t able to take advantage of the tax credit. “Mortgage interest rates are at record lows, home prices have firmed and there is good selection of property in most areas, so buyers with good jobs and favorable credit ratings find themselves in a fortunate position,” she said.
Read the complete report: http://www.realtor.org/press_room/news_releases/2010/08/ehs_fall
Real Estate Outlook: Modest Recovery
Posted by: | CommentsFrom RealtyTimes.com
By: Kenneth R. Harney
The Federal Reserve’s board of governors gave their current economic forecast a label last week: The label is “modest” – and it’s an important word to keep it in mind.
Yes, we’re still in recovery mode, the Fed governors said, but it’s a slow slog, and on any given day the news can sound discouraging.
Yes, the gross domestic product, or GDP, is still growing, and many corporations are sitting on big wads of cash, which is good.
But those same companies are not yet confident enough in the pace of the economic recovery to start hiring again … and that’s not good.
It all adds up, according to the Fed, to a mixed picture of where we are on the long pathway out of the Great Recession.
Given this tepid assessment by the government’s top economists, it’s useful to note that the real estate market racked up positive numbers in three quarterly sales and price reports issued last week.
Start with the National Association of Realtors’ second quarter results. Compared with the second quarter of 2009, this year’s numbers show how far housing has improved year-over year.
In two thirds of the major local markets tracked by the Realtors — that’s 100 out of 155 areas around the country — median prices were higher at the end of the second quarter (June 30th) than they were the same time the year before.
Nationwide the median price of houses was up by one and a half percent. But 14 local markets saw double digit increases, including San Bernadino and San Jose, California and Akron, Ohio.
Home sales were up 17 percent during the second quarter compared with 2009, and overall sales were higher in 47 states plus the District of Columbia.
Two other housing indexes released last week told similar stories: Zillow’s survey found prices up significantly in a number of large California markets, including San Diego, San Francisco and Los Angeles, all of whom had 6 percent or higher gains.
Read complete article here: http://realtytimes.com/rtpages/20100816_realestateoutlook.htm
Illinois Home Sales Up 10 Months in a Row, Chicago Region a Full Year
Posted by: | CommentsIllinois Association of REALTORS® News Release:
Home prices in Illinois are showing signs of stabilizing with continued positive year-over-year median price growth and 10 straight months of mostly double-digit sales increases; the Chicago region marked a year of positive sales activity in June. According to the Illinois Association of REALTORS® latest report, statewide total home sales (which include single-family and condominiums) in June 2010 were up 18.3 percent, totaling 13,072 homes sold compared to June 2009 sales of 11,048 homes. The median price in June 2010 was $170,000, up 2.5 percent from $165,825 in June 2009. The median is a typical market price where half the homes sold for more, half sold for less.
“The tax credit has proved to be a boost to the Illinois housing market with a tremendous level of buying and selling activity for the last 10 months which, importantly, has helped to stabilize home prices statewide,” said REALTOR® Mike Onorato, GRI, president of the Illinois Association of REALTORS® and broker-owner of Onorato Real Estate in Coal City. “As the stimulus winds down, job growth and improved consumer and business confidence will be required to keep on a path toward recovery. People need stable job prospects to feel secure in their purchasing decisions.”
In the Chicagoland Primary Metropolitan Statistical Area (PMSA), year-over-year home sales were positive for 12 consecutive months, up 27.2 percent to 9,085 homes sold (single-family and condominiums) in June 2010 compared to 7,140 homes sold in June 2009. The median home sale price for the Chicagoland PMSA was $207,500 in June 2010, down 1.2 percent from $210,000 in June 2009.
“Continued strong annual sales growth characterized the months of April, May and June in Illinois in the Chicago region,” said Dr. Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory (REAL) of the University of Illinois. “Sales are forecast to remain positive in double digits in both markets through September. Once again price changes remain more stubborn with some slight upward movement in Illinois in July and August followed by little or no change in September; in the Chicago region, the changes continue to trend down in the 1 to 5 percent range.”
Adds Hewings: “The economy is certainly not helping the housing market; the loss of over 200,000 temporary census jobs overwhelmed the private sector gains of 83,000. The unemployment rate fell nationally to 9.5 percent (from 9.7 percent in May). Illinois’ seasonally adjusted unemployment rate followed the national decline, dropping -0.4 point to 10.4 percent in June.”
Read the complete news release here: http://www.illinoisrealtor.org/newsreleases/july2010
Local home sales up for 12 straight months
Posted by: | CommentsFrom Crain’s Chicago Business
(Crain’s) — Chicago-area home sales have now increased every month for a full year, rising again in June compared with the same month in 2009.
In the nine-county Chicago region, sales of single-family homes and condominiums rose more than 27% to 9,085, compared to 7,140 homes sold in June 2009, according to a news release Thursday from the Illinois Assn. of Realtors.
In the city of Chicago, sales similarly jumped 27.5% to 2,526, compared to 1,981 homes sold in June 2009, the 10th consecutive month of higher year-over-year sales for the city.
A federal tax credit of up to $8,000 for first-time homebuyers and $6,500 for other buyers who signed contracts by April 30 helped the market, according to association President Mike Onorato. The deadline to close to get the credit recently was extended to Sept. 30.
“As the stimulus winds down, job growth and improved consumer and business confidence will be required to keep on a path toward recovery,” Mr. Onorato, broker-owner of Onorato Real Estate in Coal City, said in the release.
The median price in the Chicago area — at which half the homes sell for more and half for less — dipped 1.2% in June to $207,500, compared to $210,000 in June 2009.
In Chicago, the median price dropped 3.2% to $234,250, compared to $242,050 in June 2009, according to the Realtors.
Statewide home sales increased for the 10th consecutive month, rising 18.3% to 13,072, compared to 11,048 in June 2009. The state’s median price rose 2.5% to $170,000, compared to $165,825 in June 2009.
The association’s sales figures include new and existing homes. The nine-county Chicago Primary Metropolitan Statistical Area consists of Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will.
Original article here: http://www.chicagobusiness.com/cgi-bin/news.pl?id=38960
Chicago home sales jump 32% in May
Posted by: | Comments(Crain’s) — More homes were sold in Chicago in May than a year earlier, marking the ninth month in a row of year-over-year gains.
The Illinois Assn. of Realtors reported Tuesday that last month’s sales of 2,057 single-family houses and condominiums represented a 32.1% increase from May 2009 sales. The median price also rose, up 2.2% to $230,000, from the same month last year.
The city’s May sales uptick was also seen in the greater Chicago area, where 33.6% more homes were sold. The median price for those homes, however, fell, down 4.8% to $190,500.
Illinois home sales were up 27.1%. The median price of the 11,638 homes sold statewide last month was $157,00, a slight increase from the $156,000 median of May 2009.
The National Assn. of Realtors said Midwest home sales remained strong in May as the homebuyers tax credit drove sales nearly 22% higher than in May 2009. The credit called for offers to be made by April 30.
The data released Tuesday show 130,000 sales in the 11-state Midwest region in May. The median home price increased more than 2%, to $150,700.
Midwest sales again rose more than national ones. Nonseasonally adjusted figures show May home sales nationwide increased about 18% over last year.
The Associated Press-Re/Max Monthly Housing Report, which also was released Tuesday, showed home sales increasing in all but one of 12 major Midwestern cities tracked. Fargo, N.D., led the region with a 66% sales jump. Detroit reported the only sales decrease, a 15% drop.
View original article here, from Crain’s Chicago Business: http://www.chicagobusiness.com/cgi-bin/news.pl?id=38644
Existing home sales slip 2% in May
Posted by: | CommentsNEW YORK (CNNMoney.com) — Existing home sales slipped in May and missed estimates but sustained a strong pace as homebuyers who qualified for the expired tax credit moved to close deals ahead of the June 30 deadline.
The National Association of Realtors reported that existing home sales dipped 2.2% last month to a seasonally adjusted annual rate of 5.66 million units, down from the upwardly revised rate of 5.79 million in April. Sales year-over-year were up 19.2%.
Analysts surveyed by Briefing.com were looking for resales in May to rise to an annual rate of 6.1 million units.
Although homebuyers had to sign contracts by the end of April to qualify for a tax credit up to $8,000, they have until the end of June to close deals. Existing home sales data is based on transaction closings, so figures still reflect strong interest in the credit.
So the tax credit, stabilizing home prices and low mortgage rates kept sales at elevated levels last month, said Lawrence Yun, NAR chief economist.
“We are witnessing the ongoing effects of the homebuyer tax credit, which we’ll also see in June real estate closings,” Yun said.
The Senate could pass an amendment to push the closing deadline back to Sept. 30 as part of a controversial job and tax bill.
Price and inventory: The NAR report showed that the median price of homes sold in May was $179,600, up 2.7% from a year ago. Just under a third of homes sold during the month were distressed properties.
Total housing inventory fell 3.4% to 3.89 million existing homes for sale. That represents a 8.3-month supply at the current sales pace, down from a 8.4-month supply in April. A six month of supply is considered normal.
Sales by property and region: Sales of single-family homes declined 1.6% in May compared to the prior month, while condominium and co-op sales sank nearly 7%.
The Northeast fared the worst last month, with sales plunging 18.3% to an annual level of 890,000 units in May. That’s still 12.7% higher than a year earlier.
Resales in the Midwest were unchanged in May from the previous month at an annual pace of 1.33 million units. They rose by a modest 0.5% in the South and 4.9% in the West.
From CNNMoney.com – original article here: http://money.cnn.com/2010/06/22/news/economy/existing_home_sales/index.htm?section=money_realestate&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_realestate+%28Real+Estate%29
Optimistic Outlook for Housing, But Challenges Remain
Posted by: | CommentsRISMEDIA, May 24, 2010—Economists participating in a recent NAHB Construction Forecast Conference Webinar agreed that the housing market is on the road to recovery, but cautioned that several factors could contribute to a bumpy ride in the coming months.
“Home buyer tax credits clearly did their job and got people back into the marketplace,” said NAHB Chief Economist David Crowe, who also served as moderator of the webinar.
With the expiration of the tax credits in April, Crowe said the housing momentum is being carried forward by low interest rates, pent up household formations, stabilizing prices and budding employment growth.
However, many factors continue to drag on housing at this time–including the critical shortage of credit for new and existing projects, competition from short sales and foreclosures and regional economic disparities.
The availability of acquisition, development and construction (AD&C) financing remains a major concern as the industry moves forward, Crowe said. “Builders still tell us that credit is extremely tight. Banks are saying not so much. That gap is an indication that something is broken, at least when it comes to residential construction.”
NAHB is forecasting 552,000 single-family starts in 2010, up 25% from last year’s 445,000 level, which was the lowest annual output since 1959 when the government began collecting this data.
Suffering from an acute shortage of available financing and a significant shadow inventory of homes lost to foreclosure that are competing against normal inventory, Crowe said that multifamily housing starts are expected to lose further ground this year, falling 18% to 93,000 units, before rebounding to 150,000 units in 2011.
Crowe anticipates that nationwide home prices will remain flat this year and post a modest increase in 2011 and that mortgage interest rates will continue to stay low, barely breaking 6% by the end of this year, and not rising much above that level through 2011.
The road back to normal levels of residential construction will be longer for some states than others. By the end of 2011, the top 20% of the states will see their production levels back to normal. Those states include Texas, Oklahoma, Montana, Wyoming, Tennessee, Louisiana, Mississippi, Alabama, Arkansas and Kansas. The previous boom markets in California, Arizona, Florida and Nevada, along with the Great Lake states of Michigan, Indiana, Ohio, Illinois and Wisconsin that were hit by deep cuts in auto production and manufacturing, will be the last ones to recover.
View complete article here: http://rismedia.com/2010-05-23/optimistic-outlook-for-housing-but-challenges-remain/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Rismedia+%28RISMedia+Real+Estate+News%29
How to buy a foreclosure
Posted by: | CommentsYou want to buy a foreclosure? Remember, there are both great opportunities and great pressures and pitfalls in this market.
First, you have to decide at what stage of foreclosure you want to buy. There are three options: 1. pre-foreclosure; 2. sheriff’s auction; 3. repossession, called REO (for real estate owned by the bank).
“The safest and best way to buy is when it’s a bank-owned property,” said Rick Sharga, a spokesman for RealtyTrac, the online marketer of foreclosure properties.
Pre-foreclosure: These homes are in the foreclosure process, but they have yet to be sent to auction. Owners are typically trying to unload them because they are “underwater,” owing more on the homes than they are worth.
As a result, potential buyers must negotiate a deal with the lender as well as the owner. That makes buying at this stage of foreclosure complicated and slow. But, you have the advantage of being able to inspect the home before purchase — which isn’t the case in other types of foreclosure sales. Sharga warned, however, that prices are usually higher than at other stages of foreclosure.
Sheriff’s auction: These sales yield the lowest prices, but they are fraught with difficulties. Often the house is unavailable for inspection, leaving buyers with a long list of expensive repairs — and much larger bill than they intended. This stage is usually best left to the professionals, the contractors and investors who regularly bid on these places and know what they’re doing.
Repossession: This occurs after the home has gone through a sheriff’s auction but does not sell and the bank gains possession of the property. Homebuyers may not get the best bargains during this stage, but they can nearly always perform a thorough inspection before closing, minimizing costly surprises. Plus, the property comes with a clear title.
In addition, the banks selling these places may extend preferential financing terms to the buyers and may have made some repairs before putting the property on the market.
Even in this safer stage, though, homes are still usually sold in “as is” condition. “That means the bank won’t pay for cosmetic issues,” said Adam Wiener, a spokesman for the Redfin, the online real estate marketer. “Although, they will often pay for some or all of repairs that are health and safety issues. That makes the home inspection even more critical.”
He also pointed out that, since you’re buying from a corporation, not an individual, the buying process can be faster, so be prepared to move quickly. Many times a listing goes on sale on a Friday and is sold over the weekend.
“The buyers and their agents need to be on top of everything from the inspection to the financing,” said Wiener. “Some banks will even charge a per diem fee for late closings.”
Once you’ve decided which type of home to buy, there are several common mistakes foreclosure buyers should take care to avoid. These include:
Getting caught up in a bidding frenzy: The banks often under-price repossessions, hoping to generate excitement, attract multiple bids and sell them quickly. The problem is, as in any auction-type sale, bidders get excited and pay too much.
“Remember,” said Sharga, “there are 800,000 REOs in the banks’ inventories. There’ll be another home to bid on tomorrow.”
Underestimating repair costs: Take full advantage of the home inspection and don’t delude yourself about much the repairs will cost.
“Take along someone who can give you a good estimate of how much repair costs will come to,” said Sharga.
Redfin coaches its agents to warn buyers to factor in a cushion of 10% to 20% of the purchase price to pay for unexpected repairs. “If you end up not using it, go on vacation after 6 months,” Wiener said.
Not knowing what comparable properties cost: This is important in any market but especially in this endeavor. In high foreclosure areas, prices can be eroding very quickly. You want to have the latest homes sale prices on repossessed properties and try to keep your bid comparable or lower.
Buying in a neighborhood flooded with foreclosures: This is most important for people buying for the short-term. Any neighborhood saturated with REOs and foreclosures may be headed for further price falls. If you’re planning to relocate within a few years or buying a bigger house, that could mean selling at a loss. A better bet, if you can find it, is to buy the only foreclosed home in an otherwise stable community. That’s more likely to hold its value.
Not having financing in place: If you don’t have a pre-approved mortgage, you’re really not in the market. “You have to be able to move quickly,” Sharga said.
Banks don’t want to dilly-dally on sales; they’re losing money every day that homes sit on the market. That means they’ll often jump on the highest bid with the best financing already in place.
Having a loan beforehand carries another advantage: It tells you how much credit you have available. You won’t spend time shopping for homes that are too expensive.
Remember that pre-approved financing is different from pre-qualified financing; it means the loan is ready to go. Pre-qualified is more like an opinion of a loan officer and there’s still work to be done before final approval.
by Les Christie, CNNMoney.com
Published: May 4, 2010
Bank of America to cut some mortgage balances
Posted by: | CommentsBank of America announced Wednesday that it will first look at reducing the loan balances of certain distressed homeowners with subprime or adjustable rate mortgages to make their payments more affordable.
The move makes Bank of America (BAC, Fortune 500) one of the first major loan servicers to systematically incorporate the controversial loan modification technique into its home retention program. Financial institutions, as well as the Obama administration, have come under increasing pressure in recent months to add principal reduction to their foreclosure prevention efforts.
Housing experts argue that borrowers are more likely to walk away if their mortgages are underwater, meaning they owe more than the home is worth. Nearly 25% of borrowers are underwater, according to First American CoreLogic.
Bank of America is launching the program to entice more borrowers to participate in its foreclosure prevention efforts and to reduce the chance of redefault, said Barbara Desoer, president of Bank of America Home Loans.
When modifying mortgages, Bank of America will initially consider reducing the balances of borrowers with qualifying subprime, Pay-Option ARMs and prime 2-year hybrid ARM loans to bring down the monthly payments to 31% of pre-tax income. Currently, banks first look to reduce interest rates or lengthen the term.
Homeowners who are at least 60 days late and whose mortgages total more than 120% of their home’s value can have their balances reduced over five years by a maximum of 30%. Borrowers must also meet the criteria for the president’s loan modification program.
“Bank of America has found that many homeowners who owe considerably more on their mortgages than their homes are worth are reluctant to accept a solution that addresses only the amount of the payment without an accompanying reduction in the balance due on the loan,” said Desoer.
Borrowers also must qualify for the servicer’s National Homeownership Retention Program to be considered. The initiative was developed as part of Bank of America’s 2008 settlement with state attorneys general to assist Countrywide Financial Corp. borrowers with subprime and Pay-Option ARMs.
The settlement called for Bank of America, which acquired Countrywide in July 2008, to modify troubled mortgages with up to $8.4 billion in interest rate and principal reductions for nearly 400,000 Countrywide customers.
The bank expects that 45,000 borrowers will qualify to have their loan balances reduced by a total of $3 billion under the program announced Wednesday. It is set to begin in May.
Pay-Option ARMs allow borrowers to make tiny monthly payments, but the unpaid interest is tacked onto the mortgage balance, a practice called negative amortization. Two-year hybrid ARMs have a fixed interest rate for the first two years, but adjust after that.
Under the “earned principal forgiveness program,” borrowers will receive an interest-free forbearance of principal that can be turned into forgiveness if the homeowner makes timely payments over five years.
The ultimate amount forgiven depends on an updated appraisal of the property. Bank of America will not reduce balances below 100% of the home’s value.
These conditions will also make the program more attractive to investors because it should reduce the probability of redefault and adjust the amount forgiven if home values rise, Desoer said.
The servicer is also making changes to its National Home Retention Program. It will reduce the negative amortization on Pay-Option ARMs through principal forgiveness and will convert the loans to ones that don’t build up the balance.
It will also expand the program to cover Countrywide loans originated on or before Jan. 1, 2009, and will extend the program by six months to the end of 2012.
Many housing experts, lawmakers and even some mortgage investors have been pushing servicers to reduce loan principal. But Treasury officials and bank executives have said they are concerned about the “moral hazard” of helping those who don’t truly deserve or need it.
Still, experts say that principal reduction is a must, especially in areas hit hard by falling home values.
“Principal reduction is an important tool in making loans sustainable for many borrowers,” said John Taylor, head of the National Community Reinvestment Coalition, who praised BofA’s effort. “The rest of the industry should follow suit. And federal policy should reflect the growing consensus that principal reductions are required to stem the foreclosure crisis…”
By: Tami Luhby (CNNMoney.com)
Published March 24, 2010
Two months into the new year, condo sales are off to a strong start compared to 2009
Posted by: | CommentsAccording to figures generated for ChicagoCondosOnline.com by MRED, the regional MLS, year-to-date sales of Chicago condos for the first two months of 2010 are:
* Up 30% in total dollar volume, to $356 million
* Up 41% in units closed, to 1,097
* Down 12% in median sales price, to $255,000
* Down 8% in average market time, to 143 days
Comparing February sales to January:
* Units closed were down only 1%, from 549 to 543 closings
* Dollar volume was down 13%, from $190 million to $165 million
* Median sales price was down 11%, from $270,000 to $239,000, the lowest since March 2003
* Average market time was up 4%, from 140 days to 146 days
For details on month-over-month and year-over-year: click here.
For previous market reports: click here.
Source: www.ChicagoCondosOnline.com