Move UP to Naperville Blog #2

Buyer Wins Big

2008-09-27T16:49:53Z

I thought that I'd share my latest experience with a relocating buyer.

We've been working together since April. They knew that they wanted Naperville but just weren't too sure on which sub-division. The decision was made by their son's after-school sports events. They decided that they wanted to be close to his school and activities, even though it meant a longer commute for Dad.

So, we looked at more homes. The wife and I would go out during the week and then report back our findings.

On one of these trips we looked at a vacant, relocation home. And, many of the homes on the market are vacant! The wife liked the location...on a cul-de-sac so her son could play; the husband liked the big yard as he gardens.

The original listing price was right around $550,000. I worked out comps and gave them to the buyers. They studied listings in the area as well as in the sub-division. And, then they called me and said that they wanted to make an offer.

OK...I'm ready! I meet with them and the husband says: "Here's where we're starting our offer: $450,000." Wow. A serious buyer starting $100,000 below the listing price.

And, yes, he did come up and the seller did come down. But, neither the agent, the seller or relo laughed at our offer. That tells me that times have changed. The fact that they wanted to work with this offer...to put it together contrasts with the market we had in 2006, where an offer like this would have been refused.

So, is this a good time to buy? YES! If your credit is good...above 740 is best...and you have down payment funds. Rates are reasonable. Inventory is aging.

And, you can get a really good buy. NOW! I suspect by next Spring many of these "deals" will be history.

Government Take Over of Fannie and Freddie this weekend

2008-09-06T07:24:54Z

According to high government sources reported by both the New York Times and the Washington Post late last night the government is planning to take control of both Fannie Mae and Freddie Mac.

This move, which I thought might have happened last weekend, will protect the quasi-governmental agencies while they continue to operate.

According to the NY Times, over 70% of the mortgages written are backed by either Fannie or Freddie. As part of the take over, there will be changes in the operational aspects of the company.

The take over will also wipe out both the common and preferred stock holders. And, as many pension funds held stock in these companies that will make some people very unhappy.

The take over will end up costing the taxpayers lots of money. Expect billions. And, expect our taxes to increase to cover this. But, it will keep the fragile mortgage market together. And, we need that.

Those of you old enough to remember back in the early '90's when the government also did a take over of Long Term Capitol Management, will know that these forced moves insure against greater chaos.

Who will save Fannie and Freddie?

2008-08-20T20:56:28Z

Can Fannie and Freddie Survive?

“Washington-based Fannie Mae and Freddie Mac, have lost a combined $3.1 billion between April and June,” according to an article in the Chicago Tribune today, August 20, 2008. “The two government-sponsored companies are the largest source of funding for home mortgages in the U.S,” the paper added.

Now we know that government can not, repeat, can not, afford for these lenders to go under.

So a rescue plan will be devised…probably by the end of the year.

And, who will pay? Why, you and me and every other tax payer. But, keeping these quasi-governmental companies alive is necessary, as they’re the only ones doing low down payment mortgages.

And we thought that a $3 billion loss was a lot of money. Wait till this is over…and the total will probably reach $5 billion.

Could this have been prevented? Yes…but that’s another story.

Seller Advice

2008-08-20T13:25:05Z

Yesterday I was out "on tour." That's where listings are available for agents to see without an appointment.

And, I noticed the following at one of the listings:

1) the lawn was brown and weedy

2) the cement pad at the front door was severely cracked and coming apart

3) there were weeds in the landscape area near the front door

4) the screen door was ripped

5) there were rust stains on the front door

Now, these were just the front door impressions. In today's market, when a buyer has a choice of 25, 50 or even 100 homes in his price range, if your home doesn't have curb appeal you're not going to get the buyers into the house.

Remember, that almost all of our listings are online and they either have the exact address or a map which shows the approximate block. I know that most of my buyers do drive-bys of property to cull the list. They'd take a pass on this one.

So, what are the things that sellers need to know in today's market?

1) Price

2) Location

3) Condition

4) Financing

Price: It can't be low enough! If all the similar homes have sold between $375,000 and $390,000, then don't expect a buyer to pay $400,000 or more. It's not going to happen!

Location: Next to freeways/tollways or busy commercial streets, electric high wires, landfill dumps, devalue the property. Could be by 2%; could be by 10% or more.

Condition: It must look like a model! Store your "stuff." Or better yet, have a garage sale and what you don't sell, donate. Hire a home stager.

Financing: FHA/VA financing permit a first-time buyer to get into a property. Don't hold out for "conventional" financing. And, do offer to help with closing costs.

Now, the above only applies IF you're motivated to sell!

And, if you're motivated to sell...then contact me!

C Move UP to Naperville Blog, Eileen Landau

Real Estate Trends for 2009

2008-08-16T18:00:03Z

What I see as key real estate trends for 2009

1) Social

A) Increasing numbers of SENIORS. Many will keep on working past their "normal" retirement age as they've lost money in the stock market in the past 8 years.

B) Pent-up demand from first-time buyers as they establish new households.

C) People staying in place while aging. My "average" client has now lived in his home for 19 years.

D) More real estate people using Linked-in, YouTube and FaceBook.

E) Fewer real estate companies and agents. Those that survive take larger market share.

2) Economic

A) Continuing high rates of unemployment. Fierce competition for jobs in distressed areas such as Ohio and Michigan.

B) Relocating buyers will negotiate so that their old home is no longer their responsibility.

C) Lenders underwriting standards will continue to evolve into stricter guidelines. Strange concept that buyers will have to have funds for a down payment in addition to a job.

D) The foreclosure states of California, Florida and Nevada will be inundated with foreclosure properties. The lenders will not have enough people to handle them efficiently.

3) Technology

A) Increased use of online search engines for buyers. Expect that over 90% of all buyers will be surfing real estate on line.

B) Increased use of 'smart' phones. More Blackberry and I-phones which receive email and permit an immediate reply.

C) More agents writing unread, poorly written blogs.

D) Lead generation companies coming between the potential client and the agent and charging hefty fees.

E) Newspapers in print format disappear. We get our news online or from TV or podcasts.

4) Political

A) The candidates will make promises but their actions after election will be too late and too weak.

B) The American taxpayer will bail out the banks and Fannie Mae/Freddie Mac to the tune of several billion dollars.

C) The economy will remain sluggish and until the overwhelming housing inventory sells off, prices will remain depressed.

D) California, Florida and Nevada will take several years to recover

5) Fringe drivers or Black Swan Events. (Black Swan are events that are so outside the realm of possibility that they surprise most everyone. Thanks to Doug Kass of Real Money for introducing me to this term.)

A) A terrorist attack on U. S. soil decimates an entire city. The shock, much like 9/11, causes us to sit and watch the developments on TV, forgetting our business for at least a month.

B) A flu pandemic kills millions of people world-wide. The U.S. is put on curfew and only essential services and service providers are allowed out. Eventually, this will occur.

C) A war over an oil pipeline causes gasoline prices to soar over $6.00 a gallon. People on fixed incomes can’t afford to heat their homes and shelters are overcrowded.

D) Potential buyers trying to buy and finding that the underwriters demand their wallets and their lives (an old Jack Benny routine), continue renting.

I write a real estate prediction blog every year. Here’s the link to what I wrote: http://moveuptonaperville.blogspot.com/search?q=predictions”

Seller's Mistake Helps Buyer

2008-08-09T19:19:45Z

I was out showing Romeoville townhomes this morning. Priced between $160,000 and $200,000. Just off of Weber Road.

The subdivision is newer, under 10 years of age, and there are about 8 units on the market. We've now seen four...and two of the properties are possibilities.

However...one of the units that we walked into required us to wear dark sunglasses! The home was painted with bright oranges, yellow-greens and red. And, you saw all those colors at once. The property has been on the market over 300 days, and I'm betting that every buyer who walks in...turns around and walks out.

But, that's a mistake. The unit has a great floor plan and as far as we can tell, it looks larger than the others and it's reasonably priced. But not sold. Which means that my buyers should be able to get it for an even better price!

Sellers...when your agent tells you to "neutralize" your house...don't get upset. In this market your home has to look, smell and be a model home...or it won't sell. Period. End of discussion.

And, also...if you're having a showing...please don't lock your screen door. We can't get in. Yup, this also happened this morning. Showing was confirmed too. But, no way to get at the Sentrilock!

And some people think real estate is boring!

Reverse Mortgages for Seniors over 62

2008-08-06T15:00:15Z

The new "housing" bill has a few interesting things to say about Reverse Mortgages.

These are "mortgages" where the lender pays you while you stay in the house. For many people that's the only way that they can maintain their property as living on a fixed income (social security and perhaps a pension) just doesn't cover the inflationary rise of medicines, utilities and food.

One of my clients, took a reverse mortgage when she turned 62...and that made her life good.

However, there are some drawbacks...high closing costs and a limited amount of money that you can withdraw. So, if you want to do this...investigate and compare your options.

The new bill attempts to limit the fees, as its loan origination fee is set at 2 per cent of any loan under $200,000. Higher loans will have a fee of 1 per cent up to a maximum of $6000. Should make these loan much more appealing to seniors.

The other thing the bill will attempt is to control the high-pressure sales people who insist that you buy an insurance product as a condition for getting the loan. Don't fall for it. Take your kids, grandkids or borrow somebody who is a logical thinker and let them ask the questions while you digest the information.

Many seniors are afraid to ask questions, especially, if they don't understand something. Should I ever need to do this, I'm taking my teacher-daughter who will look cooly at the sales person and challenge them as to why.

It's so nice to know that I have logical kids who don't accept what someone says. I'm sure it's going to save me time and money.

Questions to ask your real estate agent

2008-08-02T15:29:30Z

Here are some questions that you as a consumer might want to ask the agent that you hire to represent you.

1) How long have you been in the business? I started in real estate back in the pre-historic days. 1976 to be exact. Took a full year of business courses which included real estate sales and management. And, passed my exam and got my assigned desk in a brand-new office with several other brand-new agents. No computers in those days. No electronic keyboxes. No internet. We kept a black notebook and made changes to it on a daily basis. We toured all the new listings several times a week and attended mandatory weekly meetings, even though we were independent contractors.

2) Are you a REALTOR? I am a card carrying REALTOR, a member of the National Association of REALTORS, the Illinois Association of REALTORS and my local association, Mainstreet Organization of REALTORS (MORe). As REALTORS we subscribe to an ethical model to run our business. We are governed by many rules and regulations.

3) What certifications do you hold? I passed the Broker's exam in 1982. Then I started the classes to earn my Certified Residential Specialist designation, and received the award back in 1987 after 3 years of classes. I also took several classes toward my Graduate REALTOR Institute. And, then in 1998 I took the Accredited Buyer Representation course. And, most recently in 2005, I completed my course work for e-Pro, proving that I'm a certified internet expert. And, while I was taking these classes I was coached by the following people: Tommy Hopkins, Mike Ferry, Steve Shull, Matthew Ferry, Tom Ferry and Mark Strothers. I attended lots of seminars over the years, both learning and presenting and networking with agents all over the country.

4) What is your specialty? I really enjoy working in residential real estate. I started my career as a listing agent and now with the internet I've found that I'm working mostly with buyers. So, my experience in both sides of the business is vast.

5) Can I have a list of past customers? Yes…and you'll find testimonials on my websites with former clients' names right there. And, yes, they've agreed to have these made public. I've closed 900 sales at this point...and that's a lot of homes!

6) Who is your Broker? Can I call him? Of course you can call him. John Veneris-630-515-9500. And, please be sure to say why you're calling. I've worked with John for over 30 years. And, he's a great manager, in fact, he was Manager of the Year when we were at Re/Max many years ago.

7) Is this your full-time job? YES! I spend vast amounts of time previewing property; emailing information to clients; answering questions; showing homes; going to inspections; and solving problems. Full time...but I do take time off. Saturday nights are reserved.

8) What makes you different? I never thought you'd ask! I'm highly analytic. Really. Many of my clients are engineers, doctors, lawyers, teachers and scientists. And, I do have a very logical system as pertains to buying a house. I'm also good at negotiating. I don't get angry or upset. And, as I've seen so many "strange" things, that I can roll with the punches. This market that we're in, is a slow market, and many agents don't know how to work foreclosures, bank real estate owned or short sales. Time is a great teacher. I've seen interest rates as high as 18% in 1982, to a low of 4.5% back in 2005. A great agent adjusts to the market and educates her clients at the same time.

Any other questions? Add a comment.

My 2008 Real Estate Predictions-Revisited and Revised August 1, 2008

2008-08-01T09:55:16Z

My 2008 Real Estate Predictions-Revisited and Revised August 1, 2008

It's hard to write a blog that contains downbeat news. 2007 was just awful for real estate. And, 2008, I believe, will even be worse. Wow! How true.

This housing depression is almost as bad as the depression in the 1930’s. Some people feel it is worse!

According to RealtyTrac there are over 200,000 homes a month in the foreclosure process, and they expect that number to increase. By next summer we may have 2 million homes across the country in the foreclosure process.

Yes, the Case-Shiller monthly housing report of 20 major metropolitan areas has shown that every area has decreased housing prices and increased inventory. In my sub-division homes have dropped anywhere from $75,000 to over $100,000 in price.

And market times have increased. And, this means:

1)Increased Inventory. More and more homes coming to market. Yes, lots more homes just sitting, for months in many cases. In fact, many sellers have opted to rent their homes. And, the rentals are also sitting.

2)Increased Market Time. In Naperville currently it's about six months for a home to sell. The average market time is six and one half months. The average list-to-sell is 94%. In the past six months about 67% of the listed homes have sold.

3)Decreased Prices. Sellers who have to sell will reduce their price. Most sellers have reduced their prices by 10 to 20 per cent!

4)Increased Inducements. Sellers will offer to pay for closing costs; homeowner's association payments; and repairs. More seller contributions to get to the closing table.

5)Tighter Lending Requirements. Those marginal buyers who might have purchased a home two years ago are now shut out of this market. Indeed. Especially when purchasing a condo or townhome with an association. The underwriters want every document. They’re even reading the budgets and checking out the reserves. This is also taking longer to get to closing.

6) Fewer Relocation buyers. If a relocation buyer cannot get his home sold, then he's not taking the new job. Or, if the relocation appraisal price to buy his/her home is too low, again, he/she may not take the job. And, as so many companies are “rif”-ing (reduction in force), many new hires are rightly concerned that they may not have a job a month, or six months from now. And, also the number of companies filing for bankruptcy has increased exponentially. And, companies are downsizing both in physical locations and in employee numbers.

7) Fewer buyers. Many buyers are afraid to buy and watch the value of their newly purchased home decrease. So, they will continue to rent for another year or two. Why buy now if prices will be lower next year? Good point, although sometimes you just have to bite the bullet. If you’re planning on staying in your newly purchased home for five years, you should be fine.

The effects of the "sub-slime" mortgage mess will be felt within the entire economy. The notion that the credit problems can be "ring-fenced" or limited are naive. Someone or somebody will have to come in and rescue the lenders, the builders, the insurance companies that underwrite these loans. If it is the government...then, in essence, it will end up being the tax payers.

Hmmmmmmm. I must have a crystal ball. Could you have imagined a credit mess this worldwide?

The general economy will slow as gasoline stays above $3.00 a gallon (currently it's $4.00 a gallon) and heating oil continues to climb. There will be less discretionary funds available for home improvement, home decorating, eating out, entertainment, vacations, hotels, airplane flights and purchasing new cars. Food price will continue to rise as the cost of grain will increase as we manufacture more ethanol from corn. We've seen the reports that consumer spending was at the low end for holiday gifts. And, the only area showing strength was electronics.

The consumer's pockets are near empty and his house, which was his personal piggy bank, is not longer worth what it was two years ago. And, as most Americans, we live from paycheck to paycheck and have little to no savings for an emergency.

In our Naperville market, prices will continue to come down and market time will expand. In my sub-division, a home which was priced originally at $630,000 finally sold at $500,000. And, its competitors are still on the market...unsold.

Buyers will need some money for a down payment to purchase. At least 3% for a FHA loan. Now, it will be 3.5% down payment, plus 1.5% for FHA insurance.

And, documentation and verification will be required. Buyers will wait as they expect prices to continue down. The question is how long until prices start to go up? No one really knows. We can guess. Perhaps 18 to 24 months will be necessary to get the inventory cleaned out.

I now expect that we’ll see improvement in the Spring of 2010, that’s almost 2 years out.

It's going to take time...after all the bubble was approximately five years so it would not surprise me that we have another 2 to 3 years left. And, that can be a very long time.

The lower end of the market will have more activity as those prices are reasonable and affordable, especially if interest rates stay under 6.5%.

The higher end of the market, especially the million dollar spec homes will sit and sit and sit. And, it amazes me that several builders are still putting up these McMansions…which just sit and sit. There are several million dollar homes near Hobson Road which were built in late 2006. They are still unsold!!!

However, this too shall pass! Do we have the patience? That’s my mantra…patience and more patience!

Naperville Single Family Stats for July, 2008

2008-07-29T10:07:38Z

Eileen's Naperville Single Family Stats for July, 2008

Currently we see the following market statistics:

NAPERVILLE SINGLE FAMILY LISTINGS

ACTIVES

Bedrooms #Active Avg LP Avg Market Time

ALL 1356 680,191 194 DAYS

3 284 381,389 160 DAYS

4 860 669,062 196 DAYS

5+ 189 1,222,604 236 DAYS

SOLDS (in the past 6 months)

513 HOMES SOLD

67 PER CENT OF MARKET SOLD

$470,542 AVERAGE SALES PRICE

94 PER CENT LIST-TO-SELL RATIO

Based upon today’s Case-Shiller monthly housing report, prices are still dropping in all the top 20 metropolitan areas.

No surprise. Fewer lenders also…and much harder underwriting standards are causing many sales NOT to close.

Be prepared to document everything and it will take longer to get to the closing table.

Buyers with less than 10% down payment will find that the only available funds are under an FHA program.

Conventional lenders are requiring more down payment.

Are you thinking about buying? Call me at 630-961-2600 and let's talk.

Failing Banks and Survival

2008-07-14T11:46:29Z

Don't you wanta know who has the lousy IndyMac foreclosure loans? I do.

I'm betting that a lot of foreclosure homes will be put into a "waiting" period...and that the owners or squatters (seems like lots of vacant homes in Florida and Ca) will have a much longer "free" period.

Now, I also think that we'll see mergers with the backing of the Fed. Washington Mutual, Citigroup and all those fearless lenders who are still around will be "asked" to merge to guarantee the safety of the markets.

This is looking somewhat like 1990-1991 Long Term Capitol Mgmt fiasco, which also took many banks down with them. Seems like we never learn. Or are we (well bankers, lenders, title companies and maybe some real estate agents) too greedy?

I think that I wrote many months ago that in my market the switch occurred April, 2006...some body turned off the power! We're feeling it now big-time. Imagine doing as many rentals as sales! My broker told me that we're all doing rentals and I suspect that we'll continue for another two or even three years. No fun, that.

Now, why should we be aware of what's going on? Well, firstly, so that we can prepare and execute our business plan...with few surprizes.

Secondly, so that we can advise our buyers/sellers. I mean do you want to do a loan with WM? You need to steer the boat thru the icebergs. Start checking out your local credit unions for mortgages...almost anyone can now join a CU...and they do give mortgages. Yup. Little known fact. Talk with some of your local, smaller banks...that hold their own mortgages. You goin' need them.

Thirdly, knowledge is power! Learn about alternative financing. Have you ever had a seller (who has no mortgage) hold paper? It's a good way to structure a sale...gives the seller money monthly and lets the buyer get in. Articles of agreement; contract sale; rent with option...lots of ways to do things. BUT...and you knew there was a but...learn how...read...talk to an attorney...hey, take an attorney out to lunch and ask him/her how this works.

In Illinois, an attorney needs to do this contract. Some attorneys know how...many do not as they're not old enough to remember bad markets. All in all, know that eventually, this too will pass.

In the early 1980's...it took 4 years. We went from 13% interest rates up to 18%...then back down to 12% and the market took off. But, it was FOUR YEARS. And, only the strong survive.

Poorly Designed Town homes

2008-06-29T12:57:36Z

I worked with a townhouse buyer last week...she's over 50...but not a senior.

And as we viewed several properties I wondered about the "new" fashion in town homes in our area. In the past three years builders have been putting up townhomes which are above the garage.

This means that you have to walk up a full flight of stairs. Now, I don't know about you, but I no longer have kids to carry in the groceries. I can't imagine dragging up several bags of groceries every week.

In fact, as the laundry rooms are also on the bottom level, I can't imagine lugging up baskets of laundry either.

What are these builders thinking? Or are they only building for young folks without knee problems? Seems like they're limiting the number of potential buyers.

And, my buyer did buy a townhouse, but where you walk into the house with only one step. And, the kitchen is easily reached from the garage and its hallway. A much more practical floor plan. And, guess what? The laundry room is on the second floor! Smart, don't you think?

Would you like to find a townhome like this? Call me at 630-961-2700 and let's talk.

Countrywide is sued in Illinois

2008-06-25T11:07:54Z

Go Lisa!

Our Illinois Atty. Gen. Lisa Madigan is filing a lawsuit today against Countrywide Financial Corp.

Madigan claims that the lender engaged in “unfair and deceptive” practices which enticed people to get those risky, adjustable mortgages back in the good old days of 2002 to 2006. You know, the mortgages that are now in foreclosure…or close to it.

And, of course, Countrywide is not the only lender who gave away money. So many lenders have or will disappear within the next 18 months, that when the smoke clears the landscape will not be recognizable.

Perhaps, we’ll go back to the old, old days of purchasing a home if we have 20% or more for a down payment. Perhaps, we will have to have a job and an income that makes the mortgage payment affordable.

Imagine that we may have to have money in savings! Yes, savings. A forgotten concept with this generation. If nothing else, this depression in housing and problems in the financial arena should make us all become better financial stewards of our own resources.

As parents we should be teaching our children about savings, rain day accounts, using credit cards sensibly and living within our income.

Can we do it? Can we become examples? It’s certainly worth a try.

A true Rental Story

2008-06-25T09:53:55Z

As many of you know, or are finding out, rentals have become a big part of our business.

So, after doing all the work of finding a rental home for your clients; taking them thru the credit part; collecting certified funds and doing a final walk thru of the property...when do you think you should be paid?

When you give the credit report?

When you give the certified funds?

When you turn over the keys?

At possession?

A month after possession?

Having just done a rental at the end of May, I'm still waiting to be paid! And, it just doesn't seem correct. When we go to a closing in Illinois we receive our commission. So, why should we have to wait on a rental?

Our company is seriously thinking about setting up some consistent regulations regarding rentals. And, I just wish other companies would do the same, as it's unfair to the agents not to get paid (in my opinion) at possession.

What is your company's policy?

How often are you doing rentals now?

Any other ideas?

Naperville Single Family Stats for June, 2008

2008-06-25T09:33:47Z

Eileen's Naperville Single Family Stats for June, 2008

Currently we see the following market statistics:

ACTIVE NAPERVILLE SINGLE FAMILY LISTINGS

Bedrooms #Active Avg LP Avg Market Time

ALL 1391 674,942 193 DAYS

3 290 386,406 156 DAYS

4 893 667,603 192 DAYS

5+ 181 1,224,732 258 DAYS

SOLDS

417 HOMES SOLD

61 PER CENT OF MARKET SOLD

$464,003 AVERAGE SALES PRICE

94 DAYS ON MARKET

So, about a third of listed single family homes have sold in the past six months.

And, the biggest selling range is the four bedroom homes. Notice that prices have dropped by $7,000 in this category. Based upon the Case-Shiller housing monthly housing report, prices have dropped in all the top 20 metropolitan areas.

Buyers with money (either 10% down payment or greater) can pick and choose from a wide selection. And, most sellers will do what they can to help close the sale. In other words, reality is the new word of the year.

Telephone Scams

2008-06-03T22:25:03Z

I have been receiving calls and messages on my cell phone number. It was put on the do not call list long ago.

These callers/companies are making illegal calls and illegal offers. How do I know? Google is my friend.

Whenever I receive a toll-free number or one that I'm not familar with, I do a Google search and a reverse phone search. That generally brings me several pages of information regarding these sleazy callers. And, believe me, they are sleazy.

In fact, one California company was raided in 2007 by the FBI as they were stealing identities. As a result The Federal Trade Commission sued them and the results were filed January 17, 2008, in which the court said that they (the company) was to disclose all the fees and expenses that they would charge. But, from what I'm getting, it hasn't stopped them.

So, if the following numbers come up on your caller ID, don't answer: 877-218-0169 and 978-513-2256.

And, yes, you can file a complaint at www.donotcall.gov

Eileen's Naperville Single Family Stats for May, 2008

2008-05-29T15:12:16Z

Eileen's Naperville Single Family Stats for May, 2008

Once again the Case-Shiller monthly report shows that prices are down nationwide by as much as 20 percent in some markets, and inventory is up even more.

Currently we see the following market statistics:

ACTIVE NAPERVILLE SINGLE FAMILY LISTINGS

Bedrooms #Active Avg LP Avg Market Time

ALL 1363 673,873 186 DAYS

3 296 381,558 147 DAYS

4 860 675,863 190 DAYS

5+ 180 1,194,897 236 DAYS

56%, or 361 homes, of all active MLS listings have sold in the past six months.

Our prices are coming down as are days on market. Not by much, but every bit helps.

However, did you notice that the average price is lower? (Take a look at my earlier monthly reports)

Where are the buyers? If my experience is any indicator, buyers are renting and afraid to buy because their home value could fall.

Yet, I think that this is actually a good time to buy. There’s not much competition; sellers are ready to sell; and interest rates are still on the low side. If you’re going to stay in your home for more than five years, you’ll do ok. It’s the same principal of buying a stock when it falls and everyone hates it. Takes guts…but also makes you money.

Stats courtesy of MLSNI

What's a Woody/Woodie?

2008-05-26T13:19:17Z

You never know when you're going to see something that just shouts: Take a picture!

Most of you won't know what this car is, as they stopped building them, I think, in the 1940's...possibly the early 1950's.

This a WOODIE or WOODY...yup, this auto was manufactured with wood siding and trim. It carries its spare on the side...and we didn't see any glass for windows. And, there's even a running board. I suspect (I haven't Googled it) that that they had "issenglass" windows which they probably tied to the struts.

So, if only I had kept my Dad's Chevy ivory/gold Impala.

C Move UP to Naperville, Blog

List to Sell Ratio

2008-05-16T10:30:50Z

I've noticed that many consumers are searching for an explanation of "list to sell ratio."

So, I thought I'd try to give a simple explanation. In our area, our multiple listing service compiles data on a continuing basis and is able to spit out this information quickly.

The list to sell ratio is found by comparing the actual closed price with the listing price. Now, there is a problem here as some of you may have guessed.

Here's an example: Property lists for $500,000 originally. But, it is reduced to $450,000 over a period of eight months. It finally sells for $400,000. So, what would you guess the list to sell ratio will show?

In this case it would be 88%. This is based on the last price. But if we know the original listing price we can come out with a truer picture. However, I think that the ability to do this is restricted. So, at least, our MLS just uses the last known listing price.

In my subdivision, we had a house come on the market originally for $650,000. Relisted for $550,000. Sold for $500,000. So, if you used the 90% list to sell ratio it would be somewhat accurate. So much better to have your buyer's agent research the property history so that you know before you write your offer.

Another way to use this statistic is to ask your future listing agent what her list to sell ratio is. In other words, if she listed 100 homes and only had 50 sell, then her ratio would be 50%. Average. You might want to consider an agent who has a much higher ratio...closer to 80% or more. Why? Because this agent is probably better at pricing property correctly and knows what needs to be done in today's market. Not every agent does. Fair warning!

C 2008 Move UP to Naperville Blog

A True Story

2008-05-13T15:21:11Z

You have priced your home to perfection. You have banished all the extraneous "junk." You have hired a stager so that your home shows like a model.

You have had broker tours and Open Houses.

Now, you have an acceptable offer. You've signed the papers. The appraiser has been thru the house. The buyers have done their inspection. The buyers drive by your house daily. They're so excited!

The loan with all its paperwork has gone into underwriting, where it sits for a week. But, out it comes at last. Good to Close! Ah, those magic words. Both the buyers and the sellers are packing.

But...(you knew there was a "but") the property tax report comes back almost $2000 higher due to a re-assessment. (The original annual tax bill is now $10,000 instead of $8,000.) So, the loan goes back to underwriting. And, nothing, now will now get this loan to the closing table.

Sound far out? Not really. The underwriters have been given tighter and tighter requirements and one of my loan officers told me that you need a FICO score of 700 today! Wow, I can remember in "the good old days" when a FICO of 550 would get you into a property!

Times have changed. And, today, every buyer should get a loan approval before looking at homes and then hope that no underwriting guidelines change.

Comparison of March 2007 and March 2008 Home Sales

2008-05-08T10:54:10Z

Some more interesting Naperville Stats

Our Mainstreet Organization of REALTORS publishes monthly stats for each town in the Chicago Metro area.

Here’s a comparison of March 2007 and March 2008

	March 2008	March 2007
Naperville MLS properties sold	51	74
Average Sales Price	$209,661	$228,830
Median Sales Price	$208,000	$212,000

Wow! As there were 1179 homes on the market this March. So, I guess this is NAR’s definition of a “slow-down.”

And, have we hit bottom yet?

Some Rental Observations

2008-04-29T09:54:03Z

As so many of my clients are planning on renting I'd thought I'd share some observations.

The rental price of a property may have nothing to do with its selling price. Generally, we were told that to find the rental price of a property, you took 75% of 1% of the selling price.

Example: Sales price of a property: $500,000. One percent of that number: $5000. 75% of that number: $3750.

But, I'm not finding that. In fact, I'm seeing rental prices closer to 55% of 1%. In the example above, the rental amount would be: $2750. And, that's what I'm finding. Why? Probably because there is so much competition and owners are tired of paying a mortgage payment on a vacant home.

Also, I'm seeing where the owners expect the tenant to maintain the house, to the extent that the tenant must replace furnace filters; pay for lawn maintenance and repairs. So, expect if you rent a home that you will be taking care of it, as though it was your own!

I've also suggested to my clients that they video the property (with a date stamp) prior to taking possession. And, in addition take pictures of damage to the property when they start their lease. Make two sets of pictures. Send one set, via certified mail, to the owner or management company. Put the other set in a safe deposit box. You don't want to loose your security deposit because you can't prove that the damage was there prior to your moving in.

Expect to pay the security deposit and the first month's rent with a certified or cashier's check. The owners want to know that the money is good. Usually, thereafter, you can pay by personal check. But, again, make sure that your check arrives early. Rent is due on the first of the month, generally. Make sure that your check arrives between the 25th and 28th of the month, or you'll be paying late fees.

And, pet owners. Expect to pay an additional security deposit which may be non-refundable. Some owners will limit the size or weight of the pet to 30 pounds. And, also many towns and counties limit the number of pets per household. In DuPage, the limit is three pets per household.

It's probably a good idea to hire a cleaning crew to clean up before you move in. And, also use them when you move out. Return the property in better shape and surprize the owners.

Naperville’s Single Family Stats for April, 2008

2008-04-29T09:30:10Z

Eileen's Naperville Single Family Stats for April, 2008

Once again the Case-Shiller monthly report shows that prices are down nationwide by as much as 13 percent in some markets, and inventory is up. In fact, according to a report yesterday, the U.S. has never had as many vacant homes as we have now. And, many economist are predicting that we've yet to hit bottom. When we do hit, it’s going to hurt...more!

Currently we see the following market statistics:

ACTIVE NAPERVILLE

SINGLE FAMILY LISTINGS

Bedrooms #Active Avg LP Avg Market Time

|---- ---- -------- ------- ----------- ----------

| ALL 1309 671,256 188 DAYS

| 2 27 352,301 190 DAYS

| 3 284 386,367 147 DAYS

| 4 833 673,079 192 DAYS

| 5 + 165 1,204,603 242 DAYS

53%, or 323 homes, of all active MLS listings have sold in the past six months.

Our prices are coming down as are days on market. Not by much, but every bit helps. There is an additional 100 homes on market since the March report. All signs of a Spring market. However, did you notice that the average price is lower?

Where are the buyers? If my experience is any indicator, buyers are renting. I have 5 “buyers” from Michigan, California, New Mexico, and Florida who are going to rent for at least a year. Yes, they have a new job; but, in many cases they can’t sell their previous homes. And, if the job in the Chicago Metro area doesn’t work out? Then they are not stuck with another home to sell. And, getting a mortgage now is really hard as the underwriters are demanding more documentation in addition to your first-born!

According to AP: The Standard & Poor's/Case-Shiller home price index of 20 cities fell by 12.7 percent in February versus last year, the largest decline since its inception in 2001. Seventeen of the 20 metro areas reported record annual declines.

The index dropped 10.7 percent in January and 9.1 percent in December.

Stats courtesy of MLSNI

April Showers bring Flowers

2008-04-28T19:10:40Z

Wow! Incredible, aren't they? And, you can see these blooming shrubs at the Garfield Park Conservatory right now. They have a show of spring flowers that's just amazing. And, the price? Free. It's under the auspices of the Chicago Park District.

Of course, you could also visit the Lincoln Park Conservatory which is adjacent to Lincoln Park Zoo. Another Chicago Park district attraction.

And, if you're downtown, visit our new Millennium Park which has a wonderful ever-changing garden, and our silver bean: Cloudgate. Stay for a summer concert on the grass.

Ah, life is good...especially in Summer time!

More Freight Trains through Naperville

2008-04-22T09:39:36Z

Canadian National Railway is trying to acquire the EJ&E railroad tracks for $300 million.

I hope that they're stopped. Why?

Because they would increase the number of freight trains going through Naperville and DuPage county horrifically. The old EJ&E tracks for the most part are at ground level. When a freight train with a 100 cars goes through, traffic stops.

The worst intersection is on Route 34, Ogden Avenue, which is a four lane highway at that point. Last summer I waited 20 minutes for a slow moving coal train to lumber by. Traffic was backed up for at least a mile.

Imagine, a freight train coming through every hour! And, is there enough money to build over passes or under passes? Probably not.

Also, the track runs right on the western border of Ashwood Creek and Ashwood Park. Would you want to pay $600,000 to have a freight train in your back yard? I wouldn't.

Many community groups have banded together to stop this acquisition. Let's hope that they're successful or we'll be facing more noise and more traffic tie-ups.