Karp Real Estate

Over 12,000 Homes Selling Each Day!

Below is a short article from today's KCM Blog. If you are thinking of buying or selling (or both),  I'd like to know what YOU are waiting for? 

Many believe that very few houses are selling and that almost no one can get a mortgage. We want to let everyone know that neither of these assumptions is true. Recently, the National Association of Realtors (NAR) released their Existing Homes Sales Report. According to the report there are, on average, 12,109 homes selling in the United States EACH and EVERY DAY! That means that approximately 12,000 houses sold yesterday, approximately 12,000 will sell today and approximately 12,000 will sell tomorrow. So the thinking that homes aren’t selling just isn’t true.

Another interesting fact in the report was that 72% of these transactions were accompanied by a mortgage. That means that approximately 8,719 people qualify for a mortgage on a daily basis in this country.

There are over 12,000 homes sold and over 8,000 mortgages granted every day. The real estate market is doing better than many believe.

Thank you for reading!  If you want to know what is going on in your local market and why, please contact me directly.

To find any property for sale in the Chicago area, click here.

For up-to-the minute market information, including recent sales, on any North Shore community, click here.

 

Living Green – too Expensive?

Happy New Year!!  Looking for a few additional New Year's resolutions?  Here are some great ideas to start the new  year (be sure to look at the links too).  This article is posted with permission from the author. nsk

by Donnie R. Dann, January 2012

Many argue that although living an ecologically conscientious lifestyle might be good for the environment, it's too costly. Only a few months ago Steven Kurutz wrote Eco Meets the Economy in which he cited several examples of green living that are virtuous but impractical because of higher prices. In these economic times, for most of us financial considerations must be primary. But can you be a 'green' consumer and still reduce your expenses?

Let's consider just a few simple examples that will lower our budgets and still lessen our impact on earth's resources.

• For each degree  you turn down the heat you save 3 percent of heating costs, while each degree you raise the temperature of your air conditioner saves 3-4 percent of cooling costs.
• According to the U.S. Energy Star program, Compact Fluorescent Light (CFL) bulbs can last about 10 times longer than incandescent bulbs. Thus using 10 incandescents would be equal to plugging in a single CFL, saving about $30 per bulb, and could pay for itself in about six months. (CFLs must be recycled because of their slight mercury content.  Note from Nancy:  you can recycle CFLs at Home Depot.) If everyone did this the NRDC tells us we could avoid the need to build 30 new power plants.
• Whenever possible buy locally grown food from farms within 200 miles from home. It is often less expensive as transportation costs are avoided as compared with food shipped the more typical 1,500 to 2,500 miles. Carbon emissions are reduced as well. Moreover, produce stays on the vine longer, ripens naturally and more often tastes better.
• Avoid disposables. Those one-use throw-away razors, paper plates and paper towels, plastic knives and forks, foods wrapped in plastic, etc, can add to our landfills and should all be rejected. You'll help save the planet as well as your wallet.
• Many TVs, DVRs and small appliances that are “turned off” but remain connected to a wall plug still use 5 to 10 percent of home energy and generate heat. Unplug them and use power strips. Connect almost everything into a multi-outlet strip with its own on/off switch that can efficiently control power from several appliances at once, and wasting power is avoided.
• Take shorter showers or let the water run only when you're using it reduces 2 utility bills: water and gas or electricity.
• On the subject of water, a variety of low flow aerators or other water saving faucets can save significant water usage. The U.S. Department of Energy recommends several choices.

Does living green have to be more expensive? No doubt many eco-friendly actions are too costly for many of us, but there are few who aren't able to adopt the suggestions shown here.

Remember Rachel Carson's words, “Conservation is a cause that has no end. There is no point at which we say, our work is finished”.

 This Newsletter may be excerpted, reproduced or circulated without limitation.

Thanks for reading!! nsk

Nancy S. Karp

To find any property for sale in the Chicago area, click here.

For up-to-the minute market information, including recent sales, on any North Shore community, click here.

Advice for senior citizens considering a move.moving

There was a short article in the local paper recently with advice from a real estate agent in the area on this topic. I am in TOTAL disagreement with the response that this agent gave, and so here is my advice on this topic.

(FYI, this agent basically recommended that the seniors stay where they are until prices get better.)

For the most part, the majority of senior citizens do not have a mortgage. They have either lived in their home long enough to pay off their mortgage, or they may have downsized into a townhome or condo, with a low mortgage or no mortgage. Based on my experience working with seniors, I have found this to be very true. Of course there are exceptions to this - there always are when you make generalizations, but I'm using this assumption of no mortgage.

With this in mind, if you (or your loved) one are thinking about moving into a smaller space, or moving to senior community with planned activities and meals, or if you they need to be in an assisted living facility, you should take action to sell your current home immediately. While it is true that you will not receive the windfall dollars that you would have if they sold during the bubble of 2005/2006, you can sell at a reasonable price, the new normal, of today's market. If you have lived in you single family home for over 30 years, you will not be "losing" any money by selling in today's market. Prices are definitely higher than they were back then.

If you are selling a townhome or condo, or any place you have lived for less than 7 years, then you may end up selling below what you originally paid for the place, depending on when you bought, the condition of the property and the location. At the end of the day, you really need to think of this "loss" as the cost of living in that property. If you do the math, the dollar amount of the loss is probably less expensive than if you had been renting for all those years. And, if your money had been invested in the stock market during that same time period, you could be in the same position.

What I have learned from personal experience is that it is more important to get on with your life and live where you want/need to be than to worry about losing some cash on the sale of your home. I think this is especially true for seniors. Maintaining a single family home is a lot of work and it can be expensive. And if you are living alone, this can be an overwhelming burden. If you are having mobility issues, moving into a space without stairs can be a very positive change for you. If you live alone and don't drive anymore, there is no need for you to remain isolated in your home. There are many other options.

My last point is probably the most important. THE PRICES WE SAW IN 2005 AND 2006 ARE NOT COMING BACK ANY TIME SOON. I have heard this phrase too many times: "I want to wait until the market gets better." As I've said previously in this blog and to many people in person, we are going to continue to see declining prices until all of the distressed properties are sold. Experts are saying that there will be more foreclosures and short sales during the first quarter of 2012. And after that, at some point prices are expected to rise...but the annual increases will be at a rate of 1% o to 1.5% a year. That means it could be more than 20 years before we see those bubble prices again, if at all.

So, what are you waiting for?

Thanks for reading!

nsk

Nancy S. Karp

To find any property for sale in the Chicago area, click here.

For up-to-the minute market information, including recent sales, on any North Shore community, click here.

Trying to Refinance (and you don't have a Fannie or Freddie Mortgage)?

I know I said that I would write more about real estate property assessments.  I promise I will get to that....FYI the Lake County assessments have been published and sent to homeowners.  You have less than 30 days to appeal your assessment. Today's topic really strikes a chord with me....read on...

Trying to Refinance

The Federal government recently announced a program (HARP) that provide some relief for home owners that have paid their mortgages regularly.  This is exactly what many home owners today want and need.  It is a “reward” for staying the course and doing the right thing, even though your home value has declined and you are very likely upside down, or close to it.  Basically home owners will be allowed to refinance with much lower interest rates without getting an appraisal, as long as they have good credit and are current on their mortgage.

The problem is that this program only applies to Freddie and Fannie mortgages.  So what about all of the other home owners who have also stayed the course and continued to pay their mortgage and home equity loans in the face of falling prices.  Many people would love to refinance and take advantage of today's incredible rates, but they can’t get approved because their loan-to-value (LTV) is over 95% or possibly worse (and still sliding).  Many of these people are struggling to make ends meet.  If they could refinance the monthly savings would give them much needed breathing room. 

I don’t know how many people are in this situation, but I am sure that it is huge. I'd love to start a grass roots campaign to lobby the government to take action to encourage the banks to reward those of us who have been playing by the rules!!  If a significant number of people could save some real $$ on their mortgages it would be a boost to the economy.  These people could use it to purchase goods and services, pay off other debts, go on vacations, or maybe build up their savings so they have a safety net once again.  I realize that the banks will probably lobby against this because they say that they'll lose money on this scenario. I think that in the long run this is better option for the banks than strategic defaults, short sales, foreclosures and bankruptcy…don’t you?

I confess that I am among the many homeowners in this predicament.  So this topic is near and dear to me.  If you have any ideas on how we can get some attention in Washington D.C. on this topic, let me know...I'm all ears.  Feel free to repost this blog - as long as you give me credit for the original content, that is fine with me...

(FYI, photos are from my recent trip to historic Galena, IL)

Thanks for reading!

nsk

Nancy S. Karp

 

To find any property for sale in the Chicago area, click here.

For up-to-the minute market information, including recent sales, on any North Shore community, click here.

Will the 30-year Mortgage Disappear?

NOTE: THIS ARTICLE IS A REPRINT FROM THE KCM BLOG.  IT WAS POSTED YESTERDAY.  THIS IS ANOTHER REASON WHY ANYONE THINKING OF BUYING A HOME SHOULD NOT WAIT TOO LONG TO DO IT (ASSUMING THEY ARE GOING TO GET A MORTGAGE).  ALSO, IT IS A GOOD REASON WHY SELLERS SHOULD NOT WAIT EITHER - FEWER PEOPLE WILL BE ABLE TO QUALIFY FOR MORTGAGES IF THESE CHANGES ARE MADE! nsk

The federal government is reconsidering their involvement in the home mortgage process. They plan to still ‘guarantee’ certain mortgages. However, they appear to be redefining what they consider a ‘qualified purchaser’. They are discussing stricter lending guidelines in four different areas:

1. The type of mortgage
2. The minimum down payment
3. The debt ratios of the buyer
4. The FICO score of the purchaser

Today, we want to look at #1.

It appears that there is at least conversation about eliminating the 30 year fixed rate mortgage which has been a staple in this country’s housing industry for some time. Some in government want to duplicate the mortgage process of other countries. In Canada, for example, they don’t even have 30 year fix rate mortgages available. The vast majority of Canadian home loans have a 25 year payout but the interest rate is renegotiated every five years. If rates go down, you will wind up with a lower rate. If rates go up, you end up paying a higher rate. If you want a fixed rate mortgage for 25 years you pay a rate approximately two percentage points higher than the going rate at the time of your closing.

Would the same happen in this country? Last week, Housing Wire quoted Janis Bowdler, senior policy analyst at the National Council of La Raza:

“Without some form of Fannie Mae and Freddie Mac, replacements to support these popular loans, many first time borrowers will be shut out.

“Without that guarantee lenders would not offer 30-year fixed-rate mortgages, at least not at rates the average person could afford. Yes, some would be available but not for the average family but for those with a large amount of inherited wealth they can put to a large down payment.”

Why Is This Important?

You probably want to set your housing expense at the lowest number possible for the longest time possible. This may be the appropriate time to lock-in your long term housing expense as three things seem possible, if not likely, in the future:

• § Mortgage rates will increase from current historic lows
• § The 30 year fixed rate mortgage may disappear
• § Rents will return to historic norms of 3% annual increases 

Bottom Line

If you want to purchase a home of your own but are waiting to see where prices will go, consider what you could be giving up while you wait.

Property Taxes and the Value of Your Home

Real estate taxes have been a sore subject for many people in our community lately.  I find that there are several common misunderstandings about our property taxes among the general public.  The biggest confusion lately is about the relationship between the tax bill and the value of our homes.  People are frustrated that their tax burden seems to be increasing while their home values continue to decline.

So in my first article about property taxes I am going to answer this question:

“Why have my real estate taxes gone up while the value of my house has gone down?” 

First of all, it is important to understand that our real estate taxes are used to cover the budgets of several different government entities that provide services to the community.  Some of the specific items will vary by community.  For an example, here are the taxing bodies listed on my tax bill for Highland Park, which is in Lake County:

• Lake County
• City of Highland Park
• Park District of Highland Park
• Moraine Township
• Highland Park library
• Mosquito abatement
• School districts (we have two districts, one for K – 12 and another for the high school)
• College of Lake County
• North Shore Sanitary District
• Forest Preserve
• East Skokie Drainage
• Pension programs for Lake County, Highland Park, the Park District of Highland Park, the school districts, and the Forest Preserve

Now just because we are all in a situation where our home values are declining, does not mean that all of the above taxing bodies can operate with less money.  Our housing values have declined dramatically over the past 5 – 6 years.  Although there is pressure on all of these government organizations to tighten their belts and lower costs, at the end of the day, their budget cuts are not at the same rate as our declining home values – nor is there any reason for this to occur.  There is no relationship between home values and these budgets.  Similarly, when our home values were rising, the taxes didn’t necessarily increase at the same rates as our value.

The only reason that the tax assessor looks at our property values at all is so that they can determine each homeowner’s fair share of the total tax burden.  The actual value of the property, up or down, has no relation to the budgets for these taxing districts.  It is just a method that township assessors use, as specified by Illinois statute, to figure out each homeowner’s portion of the property tax “pie.”

Hope this is helpful. 

Thank you for reading!

Nancy S. Karp

 

To find any property for sale in the Chicago area, click here.

For up-to-the minute market information, including recent sales, on any North Shore community, click here.

Scorecard: market update for the North Shore Communities

After reading my recent series of posts providing an update on the North Shore real estate market, you may still be wondering how the various communities compare to one another.  So, here it is, the executive summary…

This is my personal ranking of the North Shore communities based on these factors within each suburb:

• Number of distressed properties that sold in the past 12 months (foreclosures and short sales)
• Number of properties currently in pre-foreclosure situation now versus 6 months ago.
• Number of bank-owned properties either on the market, or going on the market soon versus 6 months ago.

The communities at the top will see price recovery before the ones lower on the list….Skokie and Evanston at not looking good with an high and increasing levels of distressed properties.

1.Kenilworth

2.Winnetka

3. Glencoe

4. Lake Forest

5.  (4-way tie) Glenview, Northbrook, Northfield, and Riverwoods

9.  (3-way tie) Highland Park, Deerfield, and Wilmette

12. Evanston

13. Skokie

FYI, if you are ever interested in seeing information on recent sales in any suburb on the North Shore, you can find it by clicking here.  Then just click on the community of interest.

Thank you for reading!!  New topic next time, I promise.

Nancy S. Karp

 

To find any property for sale in the Chicago area, click here.

Market Update: Skokie, Winnetka and Wilmette

This is the 7th and FINAL article in a series I have written about the real estate market on Chicago's North Shore.  I have been using the concept of "shadow inventory" to understand how much longer home prices will be declining in each community on the North Shore.  Shadow inventory refers to homes that are in pre-foreclosure (the owners are 3 months or more behind on their payments) and homes that have already gone through the foreclosure process and are bank-owned.  Some of these homes may already be available for sale, but most of them are not.  When they do hit the market, it will be at discounted prices (as short sales or bank-owned properties) because of their distressed status.  When these types of properties are for sale, this causes prices of other properties in the area to decline.  So the fact that these properties are potentially going to hit the market in the coming months is NOT A GOOD THING.

Skokie

Shadow inventory increased by almost 20% over the past 6 months to 589 properties in Skokie.  Almost 27% of these are bank-owned properties. There are 430 households that are behind in their mortgage payments in Skokie – that represents 30% of the pre-foreclosures on the whole North Shore!  Skokie seems to be hit hardest of all the communities on the North Shore with distressed properties.

Skokie - 12 months ending 7.26.2011	Bank-owned properties Sold	Short Sales	Total distressed property sales
Total	126	74	200
% single family homes	59%	61%	60%
% condos/townhomes	41%	39%	40%

 

 

Skokie leads all of the other North Shore communities with 200 distressed property sales during the past 12 months.  These sales are just under 34% of the size of the current shadow inventory.  If these trends continue in Skokie it will definitely be the last suburb on the North Shore to see an end to falling prices.

Wilmette

Wilmette saw shadow inventory increase by 24% to 92 properties.  About 76% of these are in pre-foreclosure, and the rest are bank-owned.

Wilmette - 12 months ending 7.26.2011	Bank-owned properties Sold	Short Sales	Total distressed property sales
Total	12	10	22
% single family homes	75%	80%	77%
% condos/townhomes	25%	20%	23%

 

 

On top of the increase in the shadow inventory, only 22 distressed properties were sold in the past 12 months.   This is only 24% of the size of the shadow inventory.  This means that it will take some time for Wilmette to recover from falling prices because the number of distressed properties in the “pipeline” is increasing and sales of distressed properties is relatively low in comparison. 

Winnetka

Winnetka had a total of 6 bank owner properties and 14 homes in pre-foreclosure as of July 26, 2011, for a total shadow inventory of 20 homes.  This is a decrease from 39 homes in January 2011, a good sign of recovery.

Winnetka - 12 months ending 7.26.2011	Bank-owned properties Sold	Short Sales	Total distressed property sales
Total	6	8	14
% single family homes	100%	88%	93%
% condos/townhomes	0%	12%	7%

 

 

There were 14 distressed properties sold during the past 12 months in Winnetka, which is 70% of the size of the current shadow inventory.  The declining shadow inventory AND the relatively strong sales of distressed properties indicate that this community is close to turning the corner on pricing!!

 

Thank you for reading!!!

To find any property for sale in the Chicago area click here.

To look at recent sales and other sales statistics for your community click here and then click on the map to specify the community you want to see.

nsk

Nancy S. Karp

 
 
nancy@nancykarp.com

@properties | Consultant, MBA, ePro, SFR, CREN |   

love where you LIVE 

 

Market Update: Northbrook, Northfield and Riverwoods

This is the 6th article in a series I am writing about the real estate market on Chicago's North Shore.  I have been talking about "shadow inventory" and how this affects home prices.  There are homes that are in pre-foreclosure (the owners are 3 months or more behind on their payments) and homes that have already gone through the foreclosure process and are bank-owned.  Some of these homes may already be available for sale, but most of them are not.  They are called "shadow inventory" because most of them will be for sale in the coming months at discounted prices (as short sales or bank-owned properties) because of their distressed status.  When these types of properties are for sale, this causes prices to decline.  So the fact that these properties are potentially going to hit the market in the coming months is NOT A GOOD THING.  There are many other factors that affect home prices, such as interest rates and unemployment rates - in these articles I have not been discussing these factors directly.  To a large extent these factors are already reflected in the shadow inventory numbers.

Northbrook

Northbrook showed a dramatic decline in shadow inventory, which is a positive indicator for this community.  There were 286 distressed properties (bank-owned and pre-foreclosures) in January, and now it is down to 218.  Over 70% of these are pre-foreclosures.

Northbrook - 12 months ending 7.26.2011	Bank-owned properties Sold	Short Sales	Total distressed property sales
Total	56	49	105
% single family homes	68%	73%	70%
% condos/townhomes	32%	27%	30%

 

 

Another positive sign for Northbrook is that the number of distressed properties that sold in the past 12 months (see chart above) is about 48% of the size of the current shadow inventory (105 divided by 218).  This is better than the North Shore average of 38%.  Things are headed in the right direction for Northbrook.  We’re not at the bottom yet with regard to pricing, but hopefully that is just around the corner. 

 

 

Please bear in mind that once prices do hit bottom, they aren't going to just pop right back up to where they were before the bubble burst.  Experts are saying that we will see small increases in real estate prices over the next several years. 

Northfield

This is a small community in the New Trier school district nestled between Winnetka, Wilmette, Glenview, and Northbrook.  During the past 12 months there were a total of 5 distressed properties sold, as shown in the chart below:

Northfield - 12 months ending 7.26.2011	Bank-owned properties Sold	Short Sales	Total distressed property sales
Total	4	1	5
% single family homes	75%	100%	80%
% condos/townhomes	25%	0%	20%

 

 

The shadow inventory in Northfield dropped from 32 to 24 over the past 6 months (8 are bank-owned properties).  Distressed properties sold in the past 12 months as percentage of shadow inventory is under 21%.

This is well below the 38% average for the North Shore, but like Kenilworth, when the numbers are this small it is difficult to gauge whether or not this is significant.  I believe that there will continue to be downward pressure on prices in Northfield until the 8 bank-owned properties are sold and the remaining pre-foreclosure properties are resolved one way or another. 

Riverwoods

Part of the Deerfield zip code, Riverwoods is another small community on the North Shore, known for its homes on large wooded lots.  Shadow inventory in July was 25, about the same as it was in January (26).  On the positive side, Riverwoods had 11 distressed properties sold during the past 12 months.  The distressed sales as a percentage of shadow inventory is 44% - this is above the North Shore average. 

Riverwoods - 12 months ending 7.26.2011	Bank-owned properties Sold	Short Sales	Total distressed property sales
Total	5	6	11
% single family homes	100%	100%	100%
% condos/townhomes	0%	0%	0%

 

 

This means that even though there were 11 distressed sales, there are still households experiencing financial difficulty because the number of distressed properties in the pipeline stayed the same.  Translation – in this wooded community, we’re not yet out of the woods on declining prices. 

Thank you so much for reading!  The next and last installment in this series will cover Skokie, Winnetka and Wilmette.  If you would like the entire analysis all in a single report, please contact me directly and I can send it to you in PFD or WORD format.

To find any property for sale in the Chicago area click here.

To look at recent sales and other sales statistics for your community click here and then click on the map to specify the community you want to see.

nsk

Nancy S. Karp

 
 
nancy@nancykarp.com

@properties | Consultant, MBA, ePro, SFR, CREN |   

love where you LIVE 

 

Market Update: Highland Park, Kenilworth, and Lake Forest

This is the 5th article in a series I am writing about the real estate market on Chicago's North Shore.  In these blog posts I talk about "shadow inventory."  These are homes that are in pre-foreclosure (the owners are 3 months or more behind on their payments) or homes that have already gone through the foreclosure process and are bank-owned.  Some of these homes may already be available for sale, but most of them are not.  They are called "shadow inventory" because although they are not for sale at this point in time, and many of them will be for sale in the coming months at discounted prices (as short sales or bank-owned properties) because of their distressed status.  When these types of properties are for sale, this causes prices decline.  So the fact that these properties are potentially going to hit the market in the coming months is NOT A GOOD THING.

Highland Park

 Shadow inventory in Highland Park increased to 121 properties from 113 during the past 6 months; 23 % of these are bank owned and 77% are in pre-foreclosure.  This isn't a huge increase, but it still isn't a good sign for this market.  

A total of 54 distressed properties were sold during the past 12 months – less than half were bank owned and the rest were short sales.  The good news for Highland Park is that the number of distressed properties sold over the past 12 months as a percentage of the current shadow inventory is 44%, which is above the North Shore average of 38%.   

Highland Park - 12 months ending 7.26.2011	Bank-owned Properties Sold	Short Sales	Total distressed property sales
Total	26	28	54
% single family homes	100%	89%	94%
% condos/townhomes	0%	11%	6%

 

 

Overall, I think that pricing recovery for Highland Park is going to be a little bit slower than for its neighboring communities to the North and South.

Kenilworth

This is a very small and exclusive area.  The shadow inventory in Kenilworth increased by 28% since January.  I know that sounds like a lot, but in reality it only “jumped” from 7 properties to 9.  (This is why you have to be careful when you hear people quoting statistics – they can be very misleading!).  There is one bank owned property and 8 pre-foreclosure properties.  Yes, believe it or not, there are 8 households living in Kenilworth that have not been paying their mortgage!

During the past 12 months there were 3 distressed properties that sold in Kenilworth – 1 bank owned property and 2 short sales.  The distressed sales are 33% of shadow inventory, which is below the North Shore average.  But again, we are talking about very small numbers in a very small community.

Kenilworth - 12 months ending 7.26.2011	Bank-owned properties Sold	Short Sales	Total distressed property sales
Total	1	2	3
% single family homes	100%	100%	100%

 

 

Prices will probably stabilize in Kenilworth before anywhere else on the North Shore.  However, just like the other communities, the presence of bank owned properties will continue to put some downward pressure on prices. With only one bank owned property right now, things aren’t too bad.

 

Lake Forest

Lake Forest had a dramatic decrease in shadow inventory since January.  It went from 107 properties to 69.  This is a very good sign for the real estate market in Lake Forest.  Interestingly, only 26 distressed properties sold in the past 12 months in Lake Forest.  Almost 70% of these were short sales.

 

Lake Forest - 12 months ending 7.26.2011	Bank-owned properties Sold	Short Sales	Total distressed property sales
Total	8	18	26
% single family homes	87%	94%	92%
% condos/townhomes	13%	6%	8%

 

 

The number of distressed sales relative to the shadow inventory is about 38%.  This is equal to the North Shore average.  I think that this benchmark is outweighed by the dramatic decline in overall shadow inventory during the past 6 months.  This community may see prices stabilize in the near future if the number of distressed properties continues to decline at this rate.

If you are interested in seeing the complete report, just contact me and I will send you document that includes all the info for the North Shore in one article.

Next post will cover Northbrook and Northfield...

Thank you for reading!!

Nancy S. Karp

 

To find any property for sale in the Chicago area, click here.