Monthly Newsletter - @properties - Market Dislocations Create Opportunity

MARKET DISLOCATIONS CREATE OPPORTUNITY

With interest rates, inventory and pricing still deviating from historic norms, consumers have ample opportunity in today's real estate market.




Let's talk for a minute about "not normal." Sometimes not normal can be scary, like when your teenage daughter brings home the bass player from a Norwegian heavy metal band. But not normal can also be a beautiful thing. Recently, a few seemingly unwitting patrons in New York City bought paintings by the renowned graffiti artist Banksy for a couple hundred dollars each. The paintings are believed to be worth over $100,000.

In real estate, too, not normal can be scary or beautiful. But getting comfortable with the idea of not normal can shine a light on unique opportunities that otherwise go unnoticed. While today's real estate market is well along the path back to normal, there are still a number of anomalies that buyers or sellers can use to their advantage.

• Inventory - A normal level of housing supply is 6 months. Currently, supply across Chicagoland is just 4.3 months. That means sellers currently face about 30% less competition than they would find in a typical market.

• Mortgage Rates - The average 30-year mortgage rate since 1990 is 6.72%. Today's 30-year mortgage rate is 4.38%. We have gotten so used to abnormally low borrowing costs that many people take little notice of the monumental opportunity arising from this deviation.

• Rent vs. Own - Trulia.com's latest Rent vs. Buy Report estimates that it's about 36% cheaper to own than to rent in the Chicago area. This major discrepancy in housing costs should make any prospective homebuyer (or landlord) take notice. Learn more about the Rent vs. Buy Report in this month's Market Minute video. in a separate posting...



While each of these current dislocations opens doors for certain buyers and sellers, they won't last forever. We can count on mortgage rates, inventory, prices and other measures of the housing market and economy to eventually return to historic trend lines. So embrace not normal...unless, of course, his name is Sven, he's 6'4", and he's wearing white face paint and spiked wrist bands.

If you're thinking about buying or selling, or looking for more information on your local market, contact me today.


In the news:


U.S. Mortgage Rates Rise For The First Time In Five Weeks
By Elizabeth Dexheimer | October 10, 2013

The shutdown has lengthened the wait for some borrowers seeking mortgages backed by the Federal Housing Administration and Department of Agriculture. It also has postponed the release of economic-data reports, including the Department of Labor's monthly employment figures, which Federal Reserve officials use to determine whether to continue stimulus efforts.
More



Five Ways Government Shutdown Impacts New Mortgages
By Brian O'Connell | October 2, 2013

Under normal conditions, home buyers would be leaping off the fence to grab lower mortgage rates, but with the shutdown, there's enough uncertainty in the air to keep mortgage consumers on the sideline until Uncle Sam is open for business again.
More







Median Price Heat Map
October 15, 2013

Where are home prices headed? Select a county, then choose current median home prices or property value changes over the past 1, 3 or 5 years. If the map does not appear below, use our price/ location search from the box at right.
More

Happy Labor Day - I'm hoping to look this content and rested for the next 3 days....

Eva Bergant (312) 543-6819 :: Contact me :: View my profile

Neighborhood Advantages - Transportation

Crain's Chicago Business provided this article this week. 

"CTA, Metra boost home values, study says"

Link to the story: http://www.chicagobusiness.com/article/20130320/BLOGS02/130329960/cta-metra-boost-home-values-study-says

Neighborhoods like Bucktown, Wicker Park, Logan Square, Avondale, Jefferson Park,  Ravenswood, Lakeview, Wrigleyville, Rogers Park, Edgewater, South Loop all benifit from the great transportation options available in Chicago

new additional information

Dear reader,
for the last 22 months I've been writing for the Chicago Pipeline.  My short articles cover what seems interesting to me and to my current buyers and sellers.  Each week I include the recently closed properties in the Bucktown and Wicker Park neighborhoods of Chicago. 

The Pipeline is owner and editor is moving to the new DNAinfo web news for Chicago.  This means closing the Pipeline for the most part.  It's rather sad, but opens new opportunities.    For me it means setting up a new place for the weekly data postings and interesting paragraphs.  That new place is http://residentialspaceschicago.blogspot.com/

Perhaps you will join me at that place, or here.

Enjoy the buying, selling and renting of property - as I do - every day.

Eva Bergant

Residential Spaces - Bucktown and Wicker Park - October 2, 2012

This week 5 of the 10 closings were at 99.1% of the list price or higher.  The number of properties available on the market today is less than it has been recently.  In fact, there are just 3.7 months of inventory in the area, if buying continues at the current rate.  At the end of September 2011 there was over 10 months of inventory of condos and nearly 8 months for single family homes.   Great property that is priced at today’s market is selling quickly.  This is a big market change, and prepared buyers and sellers are making the market move quickly.  Current interest rates continue to be low and attractive. 

The FHA loan programs have a recent change that makes this a financing option for more condo buyers with 3.5% down.  They have increased the maximum % of investor ownership in a condo association that will potentially qualify for FHA loans.  Your loan officers can tell you more about what types of loans you qualify for and what types of properties you are able to purchase now.

Bucktown/Wicker Park closings last week:  2 Detached single family house, 4 Attached condos, and 4 2-4 unit buildings

2Sold - Detached Single 

2125 W Homer 2 bedroom 2 bath 2 Stories 5 days $416,000

1633 N Hermitage 5 bedroom 3.1 bath 3 Stories 1 day $990,000 (99.1%of list price)

4 Sold - Attached Single 

2012 W St Paul #414 2 bedroom 1.1 bath parking, Condo, Duplex, Loft 28 days $300,000 (just over list)

2331 N Lister #D 2 bedroom 2.1 bath 2 garage Townhouse 3+ Stories 23 days  $385,000

1751 W Julian #5 3 bedroom 2 bath 2 garage, spaces Condo 6 days $405,000 (101.5% of list)

1846 W Armitage #1E 3 bedroom 2.1 bath garage Duplex, Condo 9 days $490,000 (106.3% of list)

4 Sold - Two to Four Units 

1350 N Bell 2units, each 3 bedroom $269,900 (Short Sale) (100% of list)

1312 N Claremont 3 units each 3 bedroom $375,000

2232 W Lyndale 2 units – 2 bedroom + 1 bedroom $410,000

1219 N Damen 2 units 3 bedroom + 2 bedroom 5 days  $518,000

Quick take –

What’s on the market now?  List Prices - High Low Average Median

47 Active - Detached Single

$4,400,000 $259,000 $1,334,679 $1,100,000

99 Active - Attached Single

$749,900 $130,000 $414,861 $399,000

14 Active - Two to Four Units

$1,175,000 $270,000 $544,243 $429,500

*** Information sourced from MREDLLC; 10/1/12. Residential properties - Bucktown (Ashland, Western, Fullerton, North) and Wicker Park (Ashland, Western, North, Division)

Have a topic you’d like to see explored or a real estate question send it in. 

If you’d like more information on properties currently on the market or selling your home just drop me a note at EvaB@atproperties.com