Karp Residential

The #1 Reason Not to Wait to Sell Your Home

Many industries have been devastated by the economic shutdown caused by the COVID-19 virus. Real estate is not one of them.

Mark Fleming, Chief Economist for First American, just reported:

“Since hitting a low point during the initial stages of the pandemic, the only major industry to display immunity to the economic impacts of the coronavirus is the housing market. Housing has experienced a strong V-shaped recovery and is now exceeding pre-pandemic levels.”

Buyer demand is still strong heading into the fall. ShowingTime, which tracks the average number of buyer showings on residential properties, just announced that buyer showings are up 61.9% compared to the same time last year. They went on to say:

“Normally, real estate activity begins to slow down in the late summer, but this year it peaked in July, August and into September.”

There Is One Big Challenge

Purchaser demand is so high, the market is running out of available homes for sale. Just last week, realtor.com reported:

“Since the beginning of the COVID pandemic in March, nearly 400,000 fewer homes have been listed compared to last year, leaving a gaping hole in the U.S. housing inventory.”

The National Association of Realtors (NAR) revealed that, while home sales are skyrocketing, the inventory of existing homes for sale is dropping dramatically. Below is a graph of existing inventory (September numbers are not yet available):

Homebuilders are increasing construction, but they cannot keep up with the high demand. Bill McBride, founder of the Calculated Risk blog, in discussing inventory of newly constructed houses, notes:

“The months of supply decreased to 3.3 months…This is the all-time record low months of supply.”

What does this mean for sellers?

Anyone thinking of putting their home on the market should not wait. A seller will always negotiate the best deal when demand is high and supply is limited. That’s exactly the situation in the real estate market today.

Next year, when the pandemic is hopefully behind us, there will be many more properties coming to the market. Don’t wait for that increase in competition in your neighborhood. Now is the time to sell.

Bottom Line

Let’s connect today to get your house on the market at this optimal time to sell.

Fresh Air and Fall Colors on the North Shore

Check out these picturesque places on the North Shore where you can get some exercise and fresh air and enjoy the beautiful fall colors. 

Openlands Lakeshore Preserve (Highland Park, near Highwood/Lake Forest).   A beautiful place with unique landscapes formed over the centuries by the Great Lakes and glaciers.  Starting Oct. 19^th the beach will be closed for at least three weeks, but two blufftop trails will remain open to pedestrians.  https://www.openlands.org/

Skokie Lagoons (Forest Preserves of Cook County, Glencoe/Winnetka) A prime destination for water exploration, featuring public boat access, canoe and kayak rentals, fishing, biking and hiking trails, and picnic areas. https://fpdcc.com/places/locations/skokie-lagoons/

Chicago Botanic Garden (Glencoe)  One of the world’s great living museums and conservation science centers. Pre-register for timed entry for parking; walk in or bike in for free.   https://www.chicagobotanic.org/ 

North Branch Trail System (Forest Preserves of Cook County.  Foster Ave. in Chicago to Dundee Road in Glencoe.) A premier biking route in the northern suburbs, featuring paved and unpaved trails along approximately 20 miles of the North Branch of the Chicago River.  https://fpdcc.com/places/trails/north-branch-trail-system/

Buffalo Creek (Lake County Forest Preserves, Long Grove)  A quiet place to relax with nature, including 5.5 miles of crushed-gravel trails that are open for hiking, biking, and cross country skiing. https://www.lcfpd.org/buffalo-creek/   

Prairie Wolf Slough (Lake County Forest Preserves, Deerfield)  This preserve features a 20-acre wetland, wet prairie and adjacent oak woodlands, a trail for hiking, biking and cross country skiing and a self-guided nature trail.   https://www.lcfpd.org/prairie-wolf/

Heller Nature Center  (Park District of Highland Park)   While the Heller building is closed, the trails are open for walking and running.  https://www.pdhp.org/heller-nature-center/

Green Bay Trail  (Wilmette to Highland Park)  The 9-mile trail runs parallel to Chicago’s Metra commuter rail line through the North Shore.  https://www.enjoyillinois.com/explore/listing/green-bay-trail

Middlefork Savanna (Lake County Forest Preserves, Lake Forest)  Home to a rare tallgrass savanna; a 25-acre parcel here is considered the highest quality tallgrass savanna of its kind in the nation.  The gravel trail is open for hiking, biking and cross country skiing.  https://www.lcfpd.org/middlefork-savanna/  

The Grove  (Glenview Park District)  The area’s most unique outdoor history and nature museum, where you can walk the winding nature trails.  https://www.glenviewparks.org/thegrove/

Is it Time to Move into a Single Story House?

Once the kids have left the nest, you may be wondering what to do with all of the extra space in your home. Chances are, you don’t need four bedrooms anymore, and it may be a great time to sell your house and downsize, maybe even into a single-story home. You’ve likely gained significant equity if you’ve lived in your home for a while, so making a move while demand for your current house is high could be your best step forward toward the retirement goals you set out to achieve several years ago.

The dilemma, though, is where to go next. A big concern for many homeowners who are ready to sell is finding a home to move into, given today’s lack of houses available for sale. There is, however, some good news: the number of single-family 1-story homes being built today is on the rise, improving your odds of finding the right home for your changing needs. In a recent article, The National Association of Home Builders (NAHB) explains:

“Nationwide, the share of new homes with two or more stories fell from 53% in 2018 to 52% in 2019, while the share of new homes with one story grew from 47% to 48%.”

Here’s a map showing the breakdown of newly constructed homes being built by region, and the percentage of 1-story and 2-story homes in that mix:

 

What are the benefits of buying a 1-story home?

Still not sure about buying a single-story home? An article from Home Talk covers several advantages of switching from two floors to one:

1. Energy Efficient

“It is easier to heat and cool a single-story house [than] it would be to regulate the temperatures of a multi-story house.”

Most single-story homes only need one heating or cooling unit, and they typically stay cooler than a two-story home, both of which can lead to significant savings.

2. Easier to Maintain

“Doing a general cleaning in a single story requires less effort and you will be able to see all areas that need cleaning and the areas are easily accessible.”

Cleaning and maintenance of a single-story home can take less time and effort, and better upkeep helps improve the overall value of the home.

3. Accessible for Everyone

“A single-story house can be accessed by anyone, whether they are young children or the senior citizens.”

If you’re looking for a house that provides a safe and easily accessible environment at any age, a single-story home may be optimal.

4. Good Resell Potential

“When buying a single-story house, you should consider the resale value should you think of reselling it in case of a circumstance that can happen. Look at the growth rate of that area. Due to the high demand of these types of houses it is [easy] to resell them and depending on the growth rate of an area, it increases in value significantly.”

Single-story homes have a lot of benefits and are often in higher demand. This bodes well for future resale opportunities.

Bottom Line

There are many benefits to downsizing into a one-story home. Doing so while demand for your current house is high might make it easier than ever to make a move. Let’s connect if you’re ready to purchase the single-story home you need while homes are so affordable today.

Why Selling This Fall May be Your Best Move

If you’re thinking about moving, selling your house this fall might be the way to go. Here are four highlights in the housing market that may make your decision to sell this fall an easy one.

1.  Buyers Are Actively in the Market

ShowingTime, a leading real estate showing software and market stat service provider, just reported that buyer traffic jumped 60.7% compared to this time last year. That’s a huge increase.

It’s clear that buyers are ready, willing, and able to purchase – and they’re in the market right now. In many regions of the country, multiple buyers are entering bidding wars to compete for the home they want. Take advantage of the buyer activity currently in the market so you can sell your house in the most favorable terms.

2.  There Are Not Enough Homes for Sale

In the latest Existing Home Sales Report, the National Association of Realtors (NAR) announced that there were only 1.49 million units available for sale. That number was down 18.6% from one year ago. This means in the majority of the country, there aren’t enough homes for sale to satisfy the number of buyers.

Due to the health crisis, many homeowners were reluctant to list their homes earlier this year. That will change as the economy continues to recover. The choices buyers have will increase going into the new year. Don’t wait until additional sellers come to market before you decide to make a move.

3.  The Process Is Going Quickly

Today’s ultra-competitive environment has forced buyers to do all they can to stand out from the crowd, including getting pre-approved for their mortgage financing. This makes the entire selling process much faster and simpler, as buyers know exactly what they can afford before shopping for a home. According to the latest Origination Insights Report from Ellie Mae, the time needed to close a loan is just 49 days.

4.  There May Never Be a More Important Time to Move

You’ve likely spent much of the last six months in your current home. Perhaps you now realize how small it is, and you need more space. If you’re working from home, your children are doing virtual school, or you just need more space, your current floor plan may not work for your family’s changing needs.

Homebuilders are beginning to build houses again, so you can choose the exact floor plan to match what your family needs, and you can make sure the outdoor space is what you want too.

Bottom Line

The housing market is prime for sellers right now, so let’s connect to get the process started this fall. If the timing is right for you and your family, the market is calling your name.

The Cost of a Home is Far More Important than the Price

Housing inventory is at an all-time low. There are 39% fewer homes for sale today than at this time last year, and buyer demand continues to set records. Zillow recently reported:

“Newly pending sales are up 25.5% compared to the same week last year, the highest year-over-year increase in the weekly Zillow database.”

Whenever there is a shortage in supply of an item that’s in high demand, the price of that item increases. That’s exactly what’s happening in the real estate market right now. CoreLogic’s latest Home Price Index reports that values have increased by 5.5% over the last year.

This is great news if you’re planning to sell your house; on the other hand, as either a first-time or repeat buyer, this may instead seem like troubling news. However, purchasers should realize that the price of a house is not as important as the cost. Let’s break it down.

There are several factors that influence the cost of a home. The two major ones are the price of the home and the interest rate at which a buyer can borrow the funds necessary to purchase the home.

Last week, Freddie Mac announced that the average interest rate for a 30-year fixed-rate mortgage was 2.87%. At this time last year, the rate was 3.73%. Let’s use an example to see how that difference impacts the true cost of a home.

Assume you purchased a home last year and took out a $250,000 mortgage. As mentioned above, home values have increased by 5.5% over the last year. To buy that same home this year, you would need to take out a mortgage of $263,750.

How will your monthly mortgage payment change based on today’s lower mortgage rate?

This table calculates the difference in your monthly payment:That’s a savings of $61 monthly, which adds up to $732 annually and $21,960 over the life of the loan.

Bottom Line

Even though home values have appreciated, it’s a great time to buy a home because mortgage rates are at historic lows.

Planning to Buy? Get Pre-Approved!

Before shopping for a new home, it’s important to make sure you qualify for financing, if you aren’t paying with cash.  Completing this step before you start the home-buying process will help you  determine your budget.  Once you are pre-approved for a mortgage, then you will know how much you can afford to spend and you can confidently  determine the price range for your search.

Most sellers are reluctant to show their home to someone who isn’t a serious buyer.  And now in the middle of the pandemic, that is more important than ever.  No one wants you visiting their home unless you are pre-approved for a mortgage - they don’t think you’re a serious buyer without it.  And, your real estate broker may not want to take you out to see properties if you can’t provide evidence that you are a serious qualified buyer.

So what exactly is pre-approval?  It means the lender has checked your credit and verified your income documentation  to approve a specific loan amount.  The approval usually lasts for a period of time - 60 to 90 days for example.

  

Pre-approval should take less than an hour over the phone.  Your lender will want to discuss your income, credit, employment, and financial situation.  You’ll need to provide:

.  Your two most recent paystubs

.  W2 and/or tax returns from the last 2 years

.  Bank statements

Once the process is complete, you’ll receive a pre-approval letter, which shows sellers you’re a serious and qualified buyer.  This can really help you stand out in the current competitive market.  Right now we are experiencing a shortage of homes for sale , with more buyers than sellers.  If you end up in a bidding war over your dream house, having that pre-approval letter can really make a difference.  Some sellers will ask to see a pre-approval letter before they will respond to your offer.  So if you wait to get approved until after you find the home you want, you could lose out to someone else because you are waiting for your pre-approval letter.  And getting pre-approved can help speed up the loan application process once your offer has been accepted.

In this competitive market, your pre-approval letter can be a game changer.  If you’re ready to buy and you have a lender in mind,  great!  If not, I can refer you to a trusted lender who will help to guide you through the mortgage process.

Lots of People are Moving This Year ... Here's Why

The current health crisis has really changed our lifestyles and our needs.  And now that people are spending much more time at home, what they find most important in a home has changed as well.   With this new perspective, here are some major reasons people are making moves this year.

Working from Home

Working remotely is the new norm for many, and while some of us thought it would last a few weeks or months, the reality is it may continue into 2021.  And even when things go back to normal, many people are just as happy working from home.  This means they don’t need to live close to the office anymore, or near the train, and they frequently can get more for their money if they move to the suburbs.  Which is important, because with remote work comes the need for a home office or workspace.  Working from the dining room table is usually not viable for the long term, especially if both spouses are working from home.

Virtual Schooling

Many schools are starting remotely this fall.  And kids need a dedicated learning space.  Just like parents need a quiet place to work, so do the kids need a quiet place to learn.

Outdoor Space

Fresh air is a must, and for those living in an apartment, getting outside during a pandemic can be a challenge.  Moving to a home with any type of yard provides a place to relax and entertain friends.  With the right setup your backyard can also become an extra workspace or learning space.  And if there are children at home, a big yard provides the opportunity to safely play outdoors.

Exercise

There are some concerns about the safety of returning to health clubs, and many people are looking for a way to exercise from home.  Having space for at-home workouts is a priority for some.

For many people, moving is the best option to accommodate their family’s changing needs.  Because mortgage rates are so low right now, it’s a great time to get more home for your money.  If you’ve been trying to decide if now is the time to buy a new home, please reach out – I would be happy to discuss your needs.

Sold in 6 Days!

It’s always exciting when a home sells in just a few days.  When that happens, there is usually a lot that went on before the home was listed, to show the home in the best light possible.  Preparing the home can be daunting, but Nancy Karp expertly guides home sellers through the process.

When the owner of a charming vintage 3-story house on a lovely tree-lined street in east Highland Park contacted us about selling her home, the owner thought it was all ready to go on the market.  The home featured hardwood floors throughout, the dining room was huge, with gorgeous crown moldings and beautiful built-in cabinets, the third-floor attic had been converted to a “bonus” room with skylight windows, and the yard featured perennial gardens and a gazebo.  Over the previous 5 years, the owner had been gradually doing some big projects to prepare the home for sale.  It was truly a wonderful house.  But when Nancy toured for the first time, she could see that there was still work to do to present the property in the best light possible. 

The home had so many wonderful qualities that were getting lost.  The living room looked smaller than it really was because there was just too much furniture, and the beautiful fireplace just got lost.  The walls in the living room were a lovely shade of pink  – not a color scheme that would appeal to today’s buyers.  And, Nancy noticed a couple of other locations in the house that needed some touch-up painting done. 

The sunroom also looked cluttered with too much furniture. 

And the owner had turned the 2nd and 3rd bedrooms and the bonus room into offices for her home-based business.  We wanted to help potential buyers envision how the space could be used, so Nancy explained to the owner that we would need to make some changes before the house was ready to sell.

The process of preparing to move out of a home you’ve lived in for years can be overwhelming.  This owner had been there for 38 years; she was now living alone and her family was all out of town.  She was faced with going through everything, giving away or selling what she didn’t want anymore, getting the home ready for sale, and packing up and moving – Nancy knew she just couldn’t do it alone. 

At Karp Residential, we pride ourselves in providing our clients with connections to other professionals we know and trust who can help them prepare for buying or selling a home – from attorneys to mortgage lenders to contractors and more.  The owner hired her own painter to freshen things up and change the color of the living room.  And, Nancy introduced this owner to Two More Sisters, which specializes in helping clients through home transitions.

Stacy Bloom of Two More Sisters streamlined the entire process for the owner, making it as easy as possible:

• Decluttering – an overwhelming task when you’ve been living in a home for decades
• Donating items and selling valuables.  This was especially challenging during COVID19, when many places that used to take donations were no longer doing so.
• Staging the home – setting the bedrooms up as bedrooms (not offices) and clearing out some of the furniture to really showcase this beautiful home. 
• Organizing everything for the movers.
• After the seller moved out, overseeing the final clean up – donating and selling any final pieces and preparing the home for the closing.     

While the owner was working with Two More Sisters to get the home ready, Nancy did extensive market analysis to help the owner price the home appropriately. 

So what was the end result of all this preparation?  The owner had a signed contract in just 6 days, for 97% of the asking price.  And, the owner is organized and ready for her move out of town.

If you are thinking about moving ... now, in 6 months, or anytime within the next couple of years ... please contact Nancy to help you get started in preparing your home for the best possible selling experience.

Wilmette Market Update: COVID19 Impact vs. 2019

In this uncertain and unprecedented time, I want to share some important information with you.  My goal is to address any questions or concerns you may have about the value of your home, and buying or selling in the current environment.  

 

How is COVID19 impacting the home values in Wilmette? 

I have been actively tracking local real estate markets on the North Shore, and reading/listening to everything available about the market. 

The Chicago area market, including the North Shore, was looking very strong in January and February, before we headed into the dramatically new and different normal that we are facing today.  As you can see on this chart for Wilmette, in January and February, the number of new homes for sale (listings) and homes going under contract, and closings were similar to 2019.  Then in March you can see the dramatic drop in the number of new homes for sale and homes going under contract.  Closings, didn’t drop until April – this is because the closings in March were from deals that were probably put together in January and February, before the Shelter-in-Place order from Governor Pritzker.

Starting in June, we began seeing a recovery in activity.  More new properties came on the market, and more homes went under contract compared to the same time in 2019.  In the next couple of months we will see an increase in closings as well.

Wilmette Detached Single Family Homes
2020 vs. 2019:  January 1 - July 31

	New Listings			Under Contract			Closed
	2019	2020	Change	2019	2020	Change	2019	2020	Change
January	79	77	-3%	24	32	33%	13	18	38%
February	90	86	-4%	36	36	0%	15	17	13%
March	92	58	-37%	53	23	-57%	24	29	21%
April	105	28	-73%	44	19	-57%	47	26	-45%
May	94	59	-37%	43	32	-26%	52	25	-52%
June	78	79	1%	45	56	24%	47	33	-30%
July	57	77	35%	26	60	131%	40	44	10%
Year to Date	595	464	-22.0%	271	258	-4.8%	238	192	-19.3%

Note:  The numbers in red show a clear trend now, with a big jump in number of contracts in July.  Wilmette is a small market, and we have to be careful when making conclusions based on limited data.  However, with the July data, it is very clear that the market has been steadily improving. 

 

But what about prices and home values?       

The average price for a single family detached home in Wilmette in January – June 2020 is up slightly versus 2019, per MRED LLC.  And the median price for the same time period is down slightly.  So, at this point in time, home values appear to be stable.  The limited number of new homes on the market and the incredibly low interest rates are two key factors that are helping to keep prices firm.

What are expectations going forward? 

Based on history, many experts believe that real estate values will not be dramatically affected by the recession that we are in right now.  This is because real estate is not the REASON for the recession, as it was in 2007/2008.  Experts have said that this is going to be more like the prior recessions which were not related to real estate.  In those recessions, real estate values did not decline.

This is good news for everyone currently selling, or those planning to put their homes on the market later this year.  Additionally, I believe that buyers can purchase with confidence and not be concerned that the value of their home will decline dramatically after their purchase.

Advice for Sellers.

Several of my clients that have homes on the market now have asked if they should temporarily take the home off the market. And I said, “Absolutely not!”  Here is why:

While it’s not “business as usual,” the real estate industry is still operating.  Lenders, lawyers, title companies, appraisers, inspectors are all working, albeit with different procedures and rules in place to keep everyone safe.   Closings are being done (curbside), mortgages are being done (virtually), and new homes are coming on the market.  Yes, the number of transactions declined for a bit and number of new homes coming on the market also declined.   But now we are ‘back” – there are new contracts being written every day.  If you aren’t on the market, you can’t sell your home.

For years I’ve been telling my clients that the first showing is online.  That is still true, now more than ever.  Think about this, right now there are a lot of people at home with extra time on their hands – guess what, they are looking at real estate!!!  We have seen a major increase in online home searches.  If you take your home off the market, none of these people will see it!

This is what I am doing to safely market the homes I have for sale:

• Floor plans required for all properties
• 3D tour or video tour/walk through for all properties
• Social media – I am regularly posting all of the properties on social media with videos or the 3D tours.
• If someone wants to see an occupied property in person, after they’ve seen the video, 3D tour and floor plans, then the sellers and I work together to make it happen in an environment that is safe for everyone (gloves, hand sanitizer, minimal touching of any surfaces, etc.).
• If a prospective buyer would like a live virtual tour of the property, we can accommodate that too.
• @properties provides a CORONA VIRUS SHOWING DISCLAIMER form that each prospective buyer and their brokers must sign in order to see any property that is occupied. The disclaimer basically states that the signer is aware of the risks and that they are currently symptom free and haven’t knowingly had contact with anyone that is ill.
• Of course if a property is vacant, then it can easily be shown.

I collaborate with clients and colleagues to discuss real-time solutions for specific situations.  We are all making adjustments to the ever-changing environment that we face.  The real estate industry has quickly pivoted to provide as many services as possible electronically to keep all participants safe.  This includes document signing, appraisals, mortgage applications, closings and much more.

Please reach out to me if you have any questions about the market.

This blog is based on an article that originally appeared in the August issue of Winnetka Neighbors.  The chart in the original article was updated here to include data through July 31st.

Save Energy Costs with a Community Solar Project

Go Green Highland Park (GGHP) is a grassroots organization partnering with the city and neighbors to create a clean and healthy place to live, now and for future generations.  I’m really excited about their latest project:  Community Solar.  They are teaming up with Trajectory Energy Partners and Clearway Community Solar to bring renewable energy to everyone in the ComEd service area.   I just learned about this initiative and encourage everyone in Highland Park and Highwood to consider subscribing.

Community Solar offers a meaningful way for all Highland Park residents to support clean energy and help reduce dependence on fossil fuels in Illinois.  This is a great option for people who can’t put solar on their own homes or don’t want an upfront investment, live in a condo or are renters.  By subscribing to a community solar project, you’ll help support the development of new solar energy generation in Illinois.

How Does Community Solar Work?  You’ll be connected to a Community Solar Project in your service territory.  The solar energy produced by the project will go to the local power grid.  When you subscribe, you’ll offset a portion of your own electricity use with electricity generated by the community solar project.  Your subscription to your community solar project will allow you to receive credit on your electric bill for the energy produced by that project.  You pay for those credits separately, at a 20% discount, with no upfront investment.  Here are the highlights: 

• There is no upfront cost
• With local renewable power, you’ll save money on electricity every month.
• Community Solar is open to any ComEd customer: homeowners, condo owners and renters
• You’ll be helping to create jobs in Illinois
• Your subscription will help reduce Illinois’ dependence on fossil fuels 

Trajectory Energy Partners was founded by Highland Park resident Jon Carson.  The company has generously committed to making a $75 donation to Go Green Highland Park for every subscriber who signs up through GGHP, and then GGHP will donate 10% of that to the Community Foundation of Highland Park.isare scheduled for Thursday, August 20^th at 7:00 p.m.  Learn more and register here.  If those dates don’t work for you, the webinars are recorded and you can watch on the Go Green HP website.

Community Solar is a way we can all be part of sharing in the benefits of solar energy while lowering our energy costs.  We’ll be doing something positive right now to help tackle climate change and drive renewable energy in Illinois.   

This article was originally published in the August issue of Highland Park Neighbors.