Just a few years ago, the bewildering words "short sale" were starting to pop up in our realtor meetings. No one really bothered to learn much about them since things like that didn't happen on the North Shore. Maybe in Evanston, Chicago, or the south suburbs.
Not so today. Realtors have had to listen and learn about the implications of short sales, pre-foreclosures, foreclosures, auctions, and other distressed properties. Certainly the North Shore has not been immune. While recently showing condo properties for a friend on the North side of Chicago, fully 90% of these units were distressed. The North Shore is not seeing numbers approach anything close to that, but enough to raise heads and have people calling and asking about them.
Here's how the numbers look:
Total Units for Sale Short Sales/Foreclosure
Winnetka 204 7
Northfield 75 4
Wilmette 189 13
Kenilworth 53 1
Glencoe 22 4
During the past week in Winnetka there were two extreme instances:
- 719 Lincoln, originally priced at 2,900,000 in 2006, inexplicably raised to $4,300,000 in 2007 and finally selling at $1,260,000.
- 384 Hawthorn, originally sold in 2005 for $2,570,000 and just listed (under contract) for $1,336,500.
No wonder interest in these properties have jumped. But buyers need to understand that not every such home will be reduced to almost half. In a short sale, the owner is trying to avoid foreclosure and owes more on the loan than the house is worth. The homeseller is trying to sell the house for less than the loan amount and the bank may or may not approve the sale - a process which can take many months to work out. In the end, the bank may try to get the seller to refinance the loan and avoid taking the loss on the loan.
In a foreclosure, the homeowner has defaulted by not making payments. The process is complicated and there are several different types of foreclosures. In the end, the house is put up for sale and generally sold at a large discount.
Many people think the great wave of foreclosures is behind us as people with subprime loans defaulted. 
But some, like me, think that the next big wave is just beginning and those with prime loans begin to have difficulty making payments. I recently read a prediction that the next surge will not peak until 2013.
These distressed home listed about are available now for purchase. If you would like more information, please give me call and I'll be happy to discuss them with you.
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