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        <title>Chicago Suburb Real Estate &amp; Area Guide</title>
        <link>http://www.cook-county-real-estate.net/blog/foreclosureshort-sale/</link>
        <description>New real estate listings, entertainment, recreation, news and things to do in Chicago and surrounding suburbs.</description>
        <item>
            <guid>http://www.cook-county-real-estate.net/blog/reviewing-2010.html</guid>
            <link>http://www.cook-county-real-estate.net/blog/reviewing-2010.html</link>
            <author>judyorr@gmail.com (Judy Orr)</author>
            <title>Reviewing 2010</title>
            <description> <![CDATA[ 
It's been an interesting year and I'm looking forward to year-end sales statistics this year more than any other.  We keep losing agents that can no longer earn a living selling real estate.  However, 2010 has been one of my best years.  It hasn't been easy and I've had to make some changes, but I've done well in a challenging market.


I Moved to a New Home


I moved to the Orland Park/Homer Glen area and sold my Oak Lawn home.  I'm glad I had my own home for sale as it helps me explain the market to my other sellers.  I sold my Oak Lawn home for less than what we paid for it in 2003.  Add the new windows, two new bathrooms, remodeled family room, new carpet, hardwood floors, interior &amp; exterior paint, etc., and we lost a lot of money.  


However, we had happy times in that home for seven years and we enjoyed the changes we made.  And we made up for it since we purchased a foreclosed Homer Glen home (with an Orland Park address) and we are making it our own.  So in our minds, our loss made up for the great deal we got.


Getting Used to Today's Decreasing Prices


It took me a while during the Seller's Market to get used to those ever increasing prices.  It was sometimes difficult setting a price because they kept increasing and we didn't want to short change our sellers.  As long as a home wasn't listed way too high over market value, the property usually sold, and quite quickly.


Now I'm amazed at how low prices are going.  It's a great market for buyers since interest rates are still quite low and prices keep going down.  When will we hit bottom?  Click the link for predictions I've read.


The problem I'm running into is having a listing that seems priced correctly "on paper" based on a Comparative Market Analysis, but there are no offers being made.  Buyers have so much to choose from, they can pick the cream of the crop.  It could be the difference of one property having granite countertops compared to another that doesn't, and if the buyer wants granite, then the property without gets bypassed.  Even if that property is a few thousand less, buyers want the house that has it done already.  This goes with any upgrade/update that is most important to that particular buyer.  


It's simple supply and demand.  Mortgage changes make it ever more difficult to qualify, leaving few buyers and too much available inventory.  There aren't enough buyers to go around.


Therefore, the homes that are selling are the best in their price range.  They're the cleanest, have the most updates and amenities and show the best in their price range.  Sellers are left with having to make updates or reducing price so their property is the best in their price range.  Simple to write down, not so easy for a seller to do or even understand.


The Tax Credit Ended in 2010


At this point in time, there is nothing similar to that tax credit.  No special financing that I am aware of.  Just ever tightening mortgage qualifications with interest rates inching up.


I am Working with More Buyers Than Ever Before


I've always considered myself as a "listing agent."  That's where I focus on listings and I don't work with many buyers.  I have been working with more buyers than marketing for listings because it's been so difficult getting listings sold.  It's not fun having to keep telling my sellers to reduce price, over and over.  


I have sold most of my listings and the ones still on the market are where the sellers aren't understanding the current market, although I keep working on them as nicely as I can.  When I do go on listing appointments, I am much more adamant about pricing the property correctly.  If a seller doesn't agree then I won't take an overpriced listing, at least not unless I get some kind of automatic price reduction paperwork signed.


If a seller doesn't price their property at market value they are simply adding more market time to their listing.  The longer the property sits on the market, the more stale that listing gets.  Many times, the sellers end up getting less than what they could have received if they had listed at the recommended price in the beginning.  I see it all the time.


Short Sales, Foreclosures and Auctions - Oh My!


A regular seller is more likely to be in competition with a distressed sale.  These kinds of sales are normally priced at a discount because the seller/bank wants a quick sale.  Sometimes, it is priced even lower to overcome damage.  As I mentioned above, we got a great deal on our new Homer Glen home, which required mostly cosmetic updates.  We were also up against 8 other buyers and we offered higher than list price to give us the best chance.  It was still a good deal.


In some areas, specific subdivisions have so many distressed sales that they are bringing the value down in the area.  If there is one regular sale and a handful or so of distressed sales priced much lower, it's difficult to get that regular property sold.  Depending on recent past sales, the regular sale might not appraise because of recent distressed sales that have recently sold and closed.  





I've written several blog posts about short sales and foreclosures.  I'm still hearing about shadow inventory and I also wrote a post about short sales and sellers.


I am seeing more and more listings going to auction.  This will be a new learning curve and from what I've studied, there are different auction services with different operating methods.  Some auctions need to be attended in person and some are online only.


It's Still a Good Market for Buyers - Not so Good for Sellers


 If you're qualified to purchase a property, you might not want to wait for that elusive bottom.  We never know we hit bottom until prices go up, so only a few lucky ones hit the timing.  We do expect interest rates to go up, possibly to 6%.  A higher interest rate can make a bigger difference than a lower price, so those rate hikes can make a difference in your affordability.


If you're a seller that needs to sell whether it is to upgrade or downgrade, you have a couple of choices.  Make your home as appealing as possible (within reason, and I give my opinion on what will give the most bank for the buck) and price it right.  Keep abreast of the changing market and be prepared to make price reductions. 


Your choice is to get your house sold (and not just up for sale) or hold onto it and rent it out.  Some sellers are making strategic walk-aways, letting their homes go into foreclosure with the plan to start over again whenever they can (when their credit recovers).  However, in states like IL, the lien holder can come after you later on, so you have to be very careful of doing a short sale, deed in lieu or foreclosure.  There could be future consequences and you might not have the chance to clean up your credit.


If you're ready to buy or sell in the southwest suburbs, give Judy Orr a call at 708-536-8200 or use the Contact Form.
 ]]> </description>
            <pubDate>Tue, 04 Jan 2011 13:51:44 -0600</pubDate>
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            <guid>http://www.cook-county-real-estate.net/blog/have-we-hit-bottom-yet.html</guid>
            <link>http://www.cook-county-real-estate.net/blog/have-we-hit-bottom-yet.html</link>
            <author>judyorr@gmail.com (Judy Orr)</author>
            <title>Have We Hit Bottom Yet?</title>
            <description> <![CDATA[ 
Have we hit the bottom of low home price values?  The optimists keep saying we should see an improvement at the end of 2011 and into 2012.  They might be somewhat correct, let's face it, they're talking a year down the road.


Today's low interest rates are tempting


Others are saying that the current low interest rates are another government ploy to keep buyers in the market.  And they might be correct, depending on how low prices drop in the future.  At today's current rates, you'd be better off with 4.5% interest rates vs. a 10% reduction at 6% based on an average home price of around $300,000.  You can try out my financing calculator to play around with rates on different price ranges. 


How low will prices go?


No one can say for sure, but some are predicting closer to 20% vs. 10%.  There are several reasons stated:




interest rates will rise, keeping many buyers out of the market unless sellers reduce


home prices are still too high, even with current price corrections - home prices are still outpacing income


there will be many more distressed sales such as foreclosures and short sales coming down the pipeline


unemployment is still too high




Will interest rates really go up in this economy?


I would love to think they will remain this low, but I do not see that happening.  I've heard statements that they will rise to around 6%.  I still think that is low; when I purchased my first home in the 1970's my interest rate was 10.5%, and we didn't blink an eye.  The price of that home was just under $20,000!  We sold it around 3 years later for the upper $40,000's.  Interest rates were still around the same.  In the early 80's (after a recession), interest rates fell to 8.5%, causing a seller's market!


Aren't foreclosures winding down a bit?


They might be down right now a slight percentage, but there are still future adjustable rate loans that are scheduled to reset.  Some mortgage holders will not refinance into a fixed rate because their rates might actually go lower and some can't refinance since their home isn't worth what they paid for it.  If interest rates go up next year then those buyers might not be able to afford the next reset.  That will keep short sales and foreclosures coming.


Should we wait to purchase?


I just purchased a home at the beginning of the year.  I am taking a loss on my resale Oak Lawn home.  I purchased a foreclosure and although we are remodeling it, I feel we got a great deal.  Even if the true value of my remodeled home falls 20%, we plan on living here for a minimum of 10 years, possibly more.


Although we feel we made a good investment, the reason we bought is because we outgrew our other home.  We needed more space.  Lucky for us, we found a home that is perfect for us and was a foreclosure that only needed cosmetic fix-ups/remodeling.  


We felt the need to move and went for it.  We are so happy in our Orland Park home.  It's tough losing money on our resale home (and that's not even taking into consideration all of the money and work we put into it) that we lived in for 7 years, but it worked out for us in the end. 


If you are currently renting and want to own a property, then with these low interest rates you should really consider purchasing now, before interest rates spike.  Keep in mind, different towns will depreciate at different rates.  There are many areas in Cook county that have already fallen by double digits.  An average drop of 20% does not mean that figure will occur in every single town.


It might be a gamble to wait


No one can predict the future, but if you're ready to buy a property, you might regret waiting.  Feel free to fill out my Automated Home Finder Form to see what's out there right now, while interest rates are so low.


  
 ]]> </description>
            <pubDate>Sun, 19 Sep 2010 13:56:38 -0500</pubDate>
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            <guid>http://www.cook-county-real-estate.net/blog/is-shadow-inventory-affecting-the-chicago-real-estate-area.html</guid>
            <link>http://www.cook-county-real-estate.net/blog/is-shadow-inventory-affecting-the-chicago-real-estate-area.html</link>
            <author>judyorr@gmail.com (Judy Orr)</author>
            <title>Is Shadow Inventory Affecting the Chicago Real Estate Area?</title>
            <description> <![CDATA[ 
What is Shadow Inventory?


Most of us will agree that "shadow inventory" comprises of properties that are bank owned that are not on the market for sale yet and can also include homes that will fall into foreclosure when loan modifications or short sales are not transacted.


Where Does the Chicago Market Stand?


I just read an article that referenced an analysis of “Shadow Inventory” published by Standard &amp; Poor's Rating Services.  The analysis did not include any mortgages backed by Fannie Mae or Freddie Mac.  I was eager to see if Chicago would be listed in the article, and it was.


The areas that were hit the hardest, such as Phoenix, Las Vegas, Detroit, San Diego, San Francisco, etc., currently have the least amount of shadow inventory.  It is deemed that the reasoning behind this is because their shadow inventories peaked back in 2007/2008, while other areas are just starting to see their inventories increase.


And yes, Chicago is now one of the areas that shows the highest amount of shadow inventories, at 44.3 months of supply.  Compare that to Phoenix which is down to 18.5 months and the Chicago area has a way to go.


Other areas with current high shadow inventories include Miami at 61.8 months supply, Seattle at 43.8 months and Washington, D.C. at 34.2 months.  Areas in between these high figures include Boston, Dallas, Los Angeles and more.


What Does Shadow Inventory Have to do With Current Active Listings?


There are several negative factors caused by shadow inventory.  The first is the fact that the homes that have already been foreclosed on are sitting vacant and boarded up.  The more of these in a particular area, the more blighted the area becomes.  


 


Foreclosures hit every price range.  Imagine being in a moderate to upper price range area and have a boarded up home in the subdivision.  It's even worse if it's on your block or right next door.  It's not for sale yet so no one can purchase it to fix it up and either sell it or move into it.  The longer it sits, the more damage can occur, making the property worth even less than the discounted foreclosure price.


Once these homes do hit the market, most of them are listed at lower than market values to make up for the neglect and any damage.  For the most part, the banks and investors now want to get rid of the property.  Again, depending on how many of these foreclosures are in a particular area, this will bring prices down for everyone.  Might sound good for buyers, but in the long run the area could be blighted for a long time.


And that's another problem.  Having these shadow inventories sitting around delays the housing market recovery.  If too many hit the market at any given time, prices continue to decline.  It is simple supply and demand, too much shadow inventory released at once to compete with the already high amount of properties for sale causes a bloat of inventory with few ready, willing and able buyers to purchase them.


Read a previous blog I wrote titled Illinois in Top Ten Foreclosure States. 


Judy Orr sells distressed and non-distressed properties.  If you're looking for an investment property to rent or sell or if you're looking for a place to call home, give Judy a call at 708-536-8200.  Feel free to do a Home Search and better yet, get listings sent automatically to your e-mail. 
 ]]> </description>
            <pubDate>Wed, 16 Jun 2010 15:38:40 -0500</pubDate>
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            <guid>http://www.cook-county-real-estate.net/blog/illinois-in-top-ten-foreclosure-states.html</guid>
            <link>http://www.cook-county-real-estate.net/blog/illinois-in-top-ten-foreclosure-states.html</link>
            <author>judyorr@gmail.com (Judy Orr)</author>
            <title>Illinois in Top Ten Foreclosure States</title>
            <description> <![CDATA[ 
I still have the feeling that sellers in the Chicago suburbs feel that the Midwest and our little market in Northern IL isn't as badly affected as some of the other states such as Florida, Arizona, Nevada (especially Las Vegas), etc.  But IL is 8th out of the top ten states regarding foreclosures and it affects supply and demand which then affects price.


 


For the first half of 2009, here are the state foreclosure stats:


1.  Nevada (1 property in every 16 is in foreclosure)


2.  Arizona (1 in 30)


3.  Florida (1 in 33 which surprises me as I thought Florida was faring worse than Arizona, although they're very close)


4.  California (1 in 34 - again a surprise as I thought California would be first)


5.  Utah (1 in 69)


6.  Georgia (1 in 70)


7.  Michigan (1 in 74 - again, I thought this would be higher based on bad news I've heard, but since this is the entire state, we're not just talking about hard hit Detroit)


8.  Illinois (1 in 76)


9.  Idaho (1 in 79)


10.  Colorado (1 in 80 - another surprise as I haven't read any bad press for Colorado) 


I've said it before, when I go out to prepare a Comparative Market Analysis in some areas the only comparable sales that have sold and closed were all foreclosures or short sales.  Unfortunately, that sets the price for that particular area.  Some sellers ask why we can't go back 12 months or farther.  It's because appraisers make the final decision (well, nowadays some underwriters are doing that much farther down in the transaction, but that hasn't happened to any of my sales yet) and we have to understand that they only go back 6 months.  In fact, in a declining market they try to go back only 3 months, but with the lack of sales that isn't always possible.


I am very busy with buyers but most of my recent closings have been foreclosure properties (investors and first-time buyers) and one of my recent transactions is handling a short sale for an Oak Lawn home for sale.  These distressed properties are in all areas and all price ranges.  I am waiting to get confirmation to show a short sale of a brand new home in Lemont that isn't 100% completed and is priced over $800,000.  If these short sales do not get accepted or fulfilled in a specific time frame, these homes will go into foreclosure.


This affects current and future sellers as it can set future market value.  Although short sales can be a good value, foreclosures are usually even better, although the property might be in worse condition because it sat longer with no care or maintenance (and some damage does occur while sitting).  When buyers can find and get financed for a great foreclosure deal, many of them opt to make offers on those homes rather than spend a higher price on a regular sale, where they might still have to put some money into it to bring the property to their satsifaction.


What happens is foreclosures are getting multiple offers while regular sales are sitting with few to no showings, and no offers.  If a seller is truly motivated to sell, they need to keep reducing price to keep up with these foreclosures.


This is great for buyers because they can now afford homes they wouldn't be able to before.  I just sold a nice home to a first-time buyer that wouldn't have been able to get such a nice home for what he paid.  I sold a home to a first-time buyer in a popular village that she could never have afforded to purchase a home in until foreclosures started appearing.  


Did these homes need work?  Yes, a little.  But the difference in those prices and the prices of regular sales made it well worth the work that needs to be done in each property.  Again, these buyers would not have been able to purchase anything as nice or in a particular area had it not been for the distressed sale.


Bottom line, and I've been repeating this for a while now, it's a bad time for sellers and if you don't absolutely have to sell (unless you're moving up) then maybe you should wait.  For how long, I have no idea.  But if you're a buyer this is a great time to buy with low prices and low interest rates.  Get off that fence because you might regret not buying down the road when things get better.


If you're ready to buy please fill out my Home Finder Form or call me at 708-536-8200.  If you have to sell give me a call.  
 ]]> </description>
            <pubDate>Fri, 17 Jul 2009 14:46:15 -0500</pubDate>
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            <guid>http://www.cook-county-real-estate.net/blog/there-are-great-deals-in-this-market.html</guid>
            <link>http://www.cook-county-real-estate.net/blog/there-are-great-deals-in-this-market.html</link>
            <author>judyorr@gmail.com (Judy Orr)</author>
            <title>There Are Great Deals In This Market</title>
            <description> <![CDATA[ 
I am seeing such great deals lately that I'm actually considering selling my home.  When we purchased our home we thought it was big enough.  But after living in it we discovered we could have used a little more space.  


We should not lose money on our home, although when figuring in the work we've done on it (remodeling bathrooms, putting in hardwood floors and some new windows), we'll be lucky to break even.  But we don't care.


The math is in our favor.  Even if we don't see good appreciation on our home (that we purchased in 2003 - just before prices started to skyrocket) we will more than make up for it with our next purchase.  In fact, I've seen foreclosed properties that are larger than our home going for less money, just because it's a foreclosure.


Aren't short sale and foreclosure properties in bad condition?


Some distressed properties have been wiped out by their owners (who have sold everything down to the copper pipes).  I'm seeing more of that in the city of Chicago, not so much in the suburbs.  


Some of these properties are filthy with the remnants of the people that were forced to leave.  In some cases, just the process of foreclosure has caused problems with a home such as pipes bursting and not being fixed, causing mold.  But all of this can be cleaned and fixed, and in many cases it is well worth the effort.


I showed a foreclosed Oak Lawn condo for sale that was in great shape.  It needed some new carpeting and a little updating which is purely cosmetic.  But it was a steal and if my buyer wasn't interested, I would have put a bid on it. 


You do have to be realistic about your offer


In every foreclosure offer I've been involved with, it has been a multiple offer situation and the listing brokerage came back to each bidder and asked for their best and final offer.  I tell my clients what the property would be worth if it wasn't a short sale (and considering they would fix it up).  We go over what similar properties have sold for and my client makes the decision on whether to increase their bid or stay put.  Most increase their bid.


In one case, we could see that the original owners purchased a property for $314,000.  It was on the market for $164,900!  My buyer had already lost out on a short sale property and put in a good bid over asking price.  They came back asking for our best and final offer.  She went even higher.  And she won the bid but still got a fantastic deal.  She wouldn't have been able to afford to live in this town otherwise.


Bidding wars


When looking at foreclosures and/or short sales, some buyers think they're going to get an even better deal than what is before them.  They think they can bid under the list price and still have a chance.  These prices are so deflated to begin with, unless the property is in such horrible shape that no one else will be interested, you can probably count on multiple offers coming in.


Many bid at asking price and still don't win because someone else realizes what a great deal it already is and bids over.  And then there are those people who simply want to win.  They get caught up in a bidding frenzy and want to make sure they get this property.  


Of course, when going into a foreclosure purchase for investment purposes, you shouldn't be tied emotionally to the property so you pay too much.  But a good agent will prevent that from happening.  


Most of the distressed properties currently on the market are priced well below market value.  Unfortunately, in some areas these properties are determining market value and are making it difficult for owners that are selling since values are plummeting because of these low priced, distressed sales.


Won't these foreclosures be gone soon?


The government is trying to make it easier for homeowners to modify their mortgages and try to prevent foreclosure, but for many it is too late.  If a seller has lost their job they cannot qualify for a loan modification.  


I've been told there will be another wave of foreclosures before things start to turn and that is why I'm thinking of going out there again and trying to find a home that fits us better.  I love my current home and have thought of building on but unfortunately it's cheaper to buy something else.


My husband and I are not afraid to remodel and fix a home up.  And if you can handle that then you could find a great deal for yourself.  You need to work with an agent that can guide you and you have to be prepared to offer more than list price.


If you'd like to work with someone who has experience in short sales and foreclosures call Judy Orr at 708-536-8200 or fill out the Home Finder Form.  You'll receive new listings straight to your e-mail without having to do any of your own searches.  That way you won't miss the great deals when they come on the market.   
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            <pubDate>Sat, 18 Apr 2009 09:08:12 -0500</pubDate>
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            <guid>http://www.cook-county-real-estate.net/blog/dont-blame-investors-for-declining-prices.html</guid>
            <link>http://www.cook-county-real-estate.net/blog/dont-blame-investors-for-declining-prices.html</link>
            <author>judyorr@gmail.com (Judy Orr)</author>
            <title>Don't Blame Investors for Declining Prices</title>
            <description> <![CDATA[ 
I rarely cite other blog posts even though I read quite a few and many of them are good.  But I usually have enough to write about so don't need to talk about other people's blog posts.  However, once in a while I find a gem that moves me.  I recently read a post about Real Estate Speculators Establishing Bottom-dollar Price for Lender-Owned Homes in Phoenix written by Greg Swann of Bloodhound Realty.  That's not even the whole post title.


Of all the good blog posts I read, why would I share one talking about the Phoneix market?  Aren't they worse off then we are?  Maybe, but I'm seeing our prices in the southwest suburbs continue to decline.  The inventory of available properties far outweighs the amount of available buyers.  And sellers here also have to start worrying about market values being established by sold and closed short sale and foreclosed properties.  We have them here, too, in amounts I've never seen in the 25 years I've been selling real estate.  


In my opinion, it isn't just bank-owned properties that are setting low prices.  It is also sellers that need to move and fortunately for them they have built up enough equity that they're not feeling the crunch. Those sellers can afford to price their properties in line with today's buyer's market and still go on with their future plans because they have enough equity.  Sellers that have owned their property for quite some time and not touched their equity don't really feel that they're "losing" money because in my opinion, the past seller's market caused unusual price increases.  Sellers that purchased many years ago, prior to the seller's market, are still seeing appreciation.  


The combination of high inventory, too few buyers to catch up with the amount of properties available and all of the properties being sold at ever lower prices because of short sales, foreclosures and sellers that are pricing their homes correctly causes prices to continue to fall.  Yes, it's happening here in the Chicago area and the suburbs.


I keep saying over and over, "Why would a seller want to keep their property on the market for months or even years?"  A property that remains on the market for such a long time becomes stagnant and buyers think something is wrong with it, not realizing that maybe the sellers have reduced $50,000 or more during the long listing time.  They don't understand that the property is sitting because it was priced too high to begin with.


A seller is much more likely to get top dollar when they first list (if priced right) than letting it languish on the market.  In most cases they end up taking even less than they would have if it was priced at market value in the beginning.


But why was it priced incorrectly?  Was it the agent's fault, the seller's fault or a little of both?  I'll write my feelings in my next post.  
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            <pubDate>Sun, 01 Jun 2008 20:46:50 -0500</pubDate>
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