Chicago Real Estate Statistics
I’m happy to announce that I’m once again an active member of the REALTOR Association NorthWest Chicagoland as registered Broker.
This highly anticipated business expansion also provides me access to the MLS in this region.
As I am focusing business in the northwest Chicago suburban area, I have decided to publish a very brief residential statistics report. The area reflected is predominantly West of Milwaukee Avenue, in an approximate 10 mile radius around the Palatine / Arlington Heights vicinity.
For the past 7 days there have been:
405 New Listings
368 Price Changes
177 Closed (Sold)
197Expired
38 Pending (Waiting to Close)
What does this indicate?
What are your geographic areas of interest?
Tuesday, November 4, 2008
Thursday, October 16, 2008
30 year loan interest rates
30 year fixed hit 6.875% yesterday.
There have been a lot of questions as to why interest rates are going up. I hope this explains it a little bit.
The public perceives rates are going down because the Fed lowered the overnight rate .50 last week, which caused the Prime Rate to drop.
That is what got all the press.
What the public does not realize is that the Fed Rates are for overnight borrowing and only really lower Prime, which if you have an equity line, it is great But it doesn’t mean anything for 1st mortgages.
As for what the news media reports for the 30 year fixed, it is often the average rate for the previous week. Rates spiked later last week, so that was not in the figures that have been reported.
What the public also does not understand is the Fed started the auctioning of bonds, i.e. borrowing, last week to cover all of these bailouts, stimulus packages etc. The auctions did not go well. Entities buying them did not bid them well, because they know that there will be so much government borrowing going forward they want higher rates from the government in order to step up and buy the bonds.
Bottom line, we are now in a period where there is a huge demand for borrowings from the US Govt, but not that much money to invest by entities that buy bonds. Simple supply and demand, if you are selling an interest rate and no one wants it, you lower the price, which causes the rate to go up.
There have been a lot of questions as to why interest rates are going up. I hope this explains it a little bit.
The public perceives rates are going down because the Fed lowered the overnight rate .50 last week, which caused the Prime Rate to drop.
That is what got all the press.
What the public does not realize is that the Fed Rates are for overnight borrowing and only really lower Prime, which if you have an equity line, it is great But it doesn’t mean anything for 1st mortgages.
As for what the news media reports for the 30 year fixed, it is often the average rate for the previous week. Rates spiked later last week, so that was not in the figures that have been reported.
What the public also does not understand is the Fed started the auctioning of bonds, i.e. borrowing, last week to cover all of these bailouts, stimulus packages etc. The auctions did not go well. Entities buying them did not bid them well, because they know that there will be so much government borrowing going forward they want higher rates from the government in order to step up and buy the bonds.
Bottom line, we are now in a period where there is a huge demand for borrowings from the US Govt, but not that much money to invest by entities that buy bonds. Simple supply and demand, if you are selling an interest rate and no one wants it, you lower the price, which causes the rate to go up.
Wednesday, September 24, 2008
Short Sales and Doc Stamps
Department of Revenue Releases Rules for Doc Stamps owed on Short Sales.
The Department of Revenue released an opinion on this issue Tuesday, Sept 23, 2008.
In essence the rule states that Documentary Stamps will be paid on the lower amount, NOT the amount plus the forgiven amount by the lender in an arm's length transaction between three parties.
The Department of Revenue stated " The amount paid by the purchaser, or paid or given by anyone on behalf of the purchaser, for an interest in Florida real property is consideration and subject to tax. However, when the lender cancels indebtedness of the seller, that cancellation is not included in determining the amount of consideration subject to tax under Section 201.02 Florida Statutes.
The Department of Revenue released an opinion on this issue Tuesday, Sept 23, 2008.
In essence the rule states that Documentary Stamps will be paid on the lower amount, NOT the amount plus the forgiven amount by the lender in an arm's length transaction between three parties.
The Department of Revenue stated " The amount paid by the purchaser, or paid or given by anyone on behalf of the purchaser, for an interest in Florida real property is consideration and subject to tax. However, when the lender cancels indebtedness of the seller, that cancellation is not included in determining the amount of consideration subject to tax under Section 201.02 Florida Statutes.
Tuesday, September 9, 2008
First time house buyer tax credit
For those who do not know, a tax credit is being offered to first time house buyers.
These links, which explaine the credit, are from the National association of Realtors.
http://www.realtor.org/GAPublic.nsf/files/chart_homebuyer_tax_credit_.pdf/$FILE/chart_homebuyer_tax_credit_.pdf
http://www.realtor.org/gapublic.nsf/files/hbtaxcreditqa2008.pdf/$FILE/hbtaxcreditqa2008.pdf
These links, which explaine the credit, are from the National association of Realtors.
http://www.realtor.org/GAPublic.nsf/files/chart_homebuyer_tax_credit_.pdf/$FILE/chart_homebuyer_tax_credit_.pdf
http://www.realtor.org/gapublic.nsf/files/hbtaxcreditqa2008.pdf/$FILE/hbtaxcreditqa2008.pdf
Monday, September 8, 2008
Mortgage Rates Declined Today
Mortgage rates have declined substantially today for the following reasons:
Investors of Mortgage Backed Securities have been reluctant to purchase FNMA and Freddie Mac securities over the past several months because of reported financial issues with both agencies.
There has always been an implied guaranty by the US Government, however foreign countries, the primary purchases of theses securities, have basically stopped purchasing because they did not feel comfortable with the "implied" guaranty for two agencies that were definitely in financial trouble.
As you know the Federal Reserve lowered their discount rate several times in the hope that mortgage rates would decline. This did not happen because investors were concerned about the credit quality and financial strength of both agencies. Therefore the spread or difference between the ten year treasury and mortgage backed securities widened to historical highs. Without this fear mortgage rates may have been up to a full point lower.
The actions by the Treasury have provided confidence in the agencies and buyers of the agency securities have stepped in dramatically today. As this is written prices have improved, it has brought interest rates below 6% today.
Please be aware there may be an increased level of volatility, ie rapid movements in rates, which typically occur when this types of dramatic changes occur in markets
Investors of Mortgage Backed Securities have been reluctant to purchase FNMA and Freddie Mac securities over the past several months because of reported financial issues with both agencies.
There has always been an implied guaranty by the US Government, however foreign countries, the primary purchases of theses securities, have basically stopped purchasing because they did not feel comfortable with the "implied" guaranty for two agencies that were definitely in financial trouble.
As you know the Federal Reserve lowered their discount rate several times in the hope that mortgage rates would decline. This did not happen because investors were concerned about the credit quality and financial strength of both agencies. Therefore the spread or difference between the ten year treasury and mortgage backed securities widened to historical highs. Without this fear mortgage rates may have been up to a full point lower.
The actions by the Treasury have provided confidence in the agencies and buyers of the agency securities have stepped in dramatically today. As this is written prices have improved, it has brought interest rates below 6% today.
Please be aware there may be an increased level of volatility, ie rapid movements in rates, which typically occur when this types of dramatic changes occur in markets
Thursday, August 28, 2008
Homeowner Hazard Insurance & Tropical Storms
This is a website you can go to if you want to check whether or not insurance companies have shut down binding due to a storm being “in the box.” On the top left side, it will indicate whether or not the insurance companies have us on a storm watch. If we are in a storm watch on the date of your closing and your buyer has not bound their insurance yet (usually it will need to be paid for prior to closing), you will have difficulty closing.
This will be important to all of us.
http://www.citizensfla.com/index.cfm
This will be important to all of us.
http://www.citizensfla.com/index.cfm
Wednesday, August 20, 2008
Rental Properties - Residential
This week I had a conversation with our residential property rental person. She is a licensed real estate agent who only handles annual residential rentals. I was surprised to hear that her property portfolio has dropped from 80 homes to about 50 homes. Rentals here have been abundant. Many residential properties were purchased for the sole purpose of investment with the grand plan of being flipped, and then, when that failed, turned into rentals. Also, homeowners who couldn’t sell their homes resorted to renting them out to subsidize mortgage payments on the home. Multiple property ownership isn’t uncommon here.
So, why the drop in inventory?
I seems home owners are giving their properties to the banks and walking away from the properties.
Does this affect you? You bet it does…
First off, If you are a renter, you may be served with a bank notice of foreclosure advising you that you must vacate your rental property. Think about this carefully. The scenario is as follows: You rent a home for a year, you pay one month rent up front, and a security deposit for damages. Mean while, the property owner, who is accepting your monies hasn’t made a mortgage payment for a few months, but he takes your rent. Seven months into your rental you get the notice of foreclosure and advisement to vacate the property. When the bank takes the property they also take title to the property. Will you ever see that security deposit or that one month in advance payment? I don’t have the answer to that. I don’t know how your rental was managed. However, I will advise this… You as a renter, or property owner, should use a reputable real estate company who specializes in property rentals. They will use a properly written lease, provide a tenant background check (always paid for by all adult renters on the lease prior to moving in), properly escrow monies, collect rents, serve notices, etc.
Does it affect the rest of us? Again, yes.
Where are those foreclosed properties going to?
They’re going to the auction block, or into the MLS as REO (bank owned) properties. They are sold cheap. Banks aren’t in the business of holding properties. And these properties all drive down all real estate price statistics through out the region.
On the up side, It’s a good time to be a buyer – A Ready, Willing, and Able buyer.
So, why the drop in inventory?
I seems home owners are giving their properties to the banks and walking away from the properties.
Does this affect you? You bet it does…
First off, If you are a renter, you may be served with a bank notice of foreclosure advising you that you must vacate your rental property. Think about this carefully. The scenario is as follows: You rent a home for a year, you pay one month rent up front, and a security deposit for damages. Mean while, the property owner, who is accepting your monies hasn’t made a mortgage payment for a few months, but he takes your rent. Seven months into your rental you get the notice of foreclosure and advisement to vacate the property. When the bank takes the property they also take title to the property. Will you ever see that security deposit or that one month in advance payment? I don’t have the answer to that. I don’t know how your rental was managed. However, I will advise this… You as a renter, or property owner, should use a reputable real estate company who specializes in property rentals. They will use a properly written lease, provide a tenant background check (always paid for by all adult renters on the lease prior to moving in), properly escrow monies, collect rents, serve notices, etc.
Does it affect the rest of us? Again, yes.
Where are those foreclosed properties going to?
They’re going to the auction block, or into the MLS as REO (bank owned) properties. They are sold cheap. Banks aren’t in the business of holding properties. And these properties all drive down all real estate price statistics through out the region.
On the up side, It’s a good time to be a buyer – A Ready, Willing, and Able buyer.
Monday, August 18, 2008
Tropical Storm Fay
Not really real estate, but what the heck.
Ok, so what do Floridians do when a big storm is on the horizon?
My wife and I have been here five years, which in my book qualifies us as Floridians. You’d definitely get an argument about that form the true natives.
I think the easiest preparation is to grab a jet to Chicago.
That not being practical, we start by letting the refrigerator contents run down. We didn’t buy one of those natural gas generators that look large enough to power up the space station. But it’s on our list… Everyone gasses up the cars before the storm. I thought this was silly at first. Then one year I saw the Palm Beach area without power for a couple of weeks. No electric, no gas pumps running. Here’s a good one. We fill up our bathtubs with water. That way, if those of us who are on a well loose electric, we can get water from the tub to put into the toilet to get it to flush. Northerners serviced by the county for water do it just because everyone else does. Now out to the garden. My wife has lots of really cute “things” in the garden. Tin frogs, metal butterflies, on metal poles, lots of plastic flamingos, you get the picture. Well, all that stuff has to go into the garage. Air born objects, you know. I spent the afternoon lightly pruning the palm trees. Not a pleasant task, but my last landscaper killed a palm from over pruning, so I do the trees myself. Of course, the pool area has to be evacuated of chairs, tables, more tin frogs on metal poles, and those relay neat large potted plants that suddenly aren’t so neat as you drag them into shelter. Other neighbors are putting their window protection devices of their choice. I have never sweat so much in my life.
One last thing to mention… This was all for tropical storm Fay, which is one day away. It may be a Cat 1 hurricane by tomorrow; it may not. If my wife wants all those tin things back in the garden after this storm do you think they'll go back there? Darn right… mama didn’t raise a fool!
Ok, so what do Floridians do when a big storm is on the horizon?
My wife and I have been here five years, which in my book qualifies us as Floridians. You’d definitely get an argument about that form the true natives.
I think the easiest preparation is to grab a jet to Chicago.
That not being practical, we start by letting the refrigerator contents run down. We didn’t buy one of those natural gas generators that look large enough to power up the space station. But it’s on our list… Everyone gasses up the cars before the storm. I thought this was silly at first. Then one year I saw the Palm Beach area without power for a couple of weeks. No electric, no gas pumps running. Here’s a good one. We fill up our bathtubs with water. That way, if those of us who are on a well loose electric, we can get water from the tub to put into the toilet to get it to flush. Northerners serviced by the county for water do it just because everyone else does. Now out to the garden. My wife has lots of really cute “things” in the garden. Tin frogs, metal butterflies, on metal poles, lots of plastic flamingos, you get the picture. Well, all that stuff has to go into the garage. Air born objects, you know. I spent the afternoon lightly pruning the palm trees. Not a pleasant task, but my last landscaper killed a palm from over pruning, so I do the trees myself. Of course, the pool area has to be evacuated of chairs, tables, more tin frogs on metal poles, and those relay neat large potted plants that suddenly aren’t so neat as you drag them into shelter. Other neighbors are putting their window protection devices of their choice. I have never sweat so much in my life.
One last thing to mention… This was all for tropical storm Fay, which is one day away. It may be a Cat 1 hurricane by tomorrow; it may not. If my wife wants all those tin things back in the garden after this storm do you think they'll go back there? Darn right… mama didn’t raise a fool!
Sunday, August 17, 2008
Homeowner Hazard Insurance and Tropical Storms
Coastal Storms and Real Estate
A word about tropical storms:
NOAA recently announced Tropical storm Fay in the Caribbean. Once this announcement was made, all homeowner property hazard insurance applications are subject to being frozen. No new policies are written until the storm passes. The weather system does not need to be classified as a hurricane for this to occur.
Insurance companies operating as they do, I would assume this business practice, in some ways, applies to all ocean coastal areas in the USA. I only have direct knowledge with Florida, USA.
As a buyer or seller, if your real estate deal has a mortgage contingency, you cannot close without the soon to be purchased property having hazard insurance. If the buyer was waiting for the insurance policy to be underwritten on closing day, and NOAA announces a tropical storm, and this tropical storm lasts through your scheduled closing date, and that insurance policy wasn’t underwritten, you will not close until NOAA lifts it’s warning.
How is this avoided?
As a buyer, during storm season, do not delay having your pending "new property" underwritten by an insurance company in advance of closing date.
As a seller, Make sure your real estate representative is on top of things and in communication with buyer or buyer’s representative.
Remember… Tropical storm / No hazard insurance / No closing.
Link http://www.noaawatch.gov/
A word about tropical storms:
NOAA recently announced Tropical storm Fay in the Caribbean. Once this announcement was made, all homeowner property hazard insurance applications are subject to being frozen. No new policies are written until the storm passes. The weather system does not need to be classified as a hurricane for this to occur.
Insurance companies operating as they do, I would assume this business practice, in some ways, applies to all ocean coastal areas in the USA. I only have direct knowledge with Florida, USA.
As a buyer or seller, if your real estate deal has a mortgage contingency, you cannot close without the soon to be purchased property having hazard insurance. If the buyer was waiting for the insurance policy to be underwritten on closing day, and NOAA announces a tropical storm, and this tropical storm lasts through your scheduled closing date, and that insurance policy wasn’t underwritten, you will not close until NOAA lifts it’s warning.
How is this avoided?
As a buyer, during storm season, do not delay having your pending "new property" underwritten by an insurance company in advance of closing date.
As a seller, Make sure your real estate representative is on top of things and in communication with buyer or buyer’s representative.
Remember… Tropical storm / No hazard insurance / No closing.
Link http://www.noaawatch.gov/
Saturday, August 16, 2008
Chicago Suburban Area Real Estate News
Palatine, IL, USA
We received a phone call yesterday asking if we were aware that Prudential bought Starck Real Estate.
Incorrect.
Starck Real Estate, corporate office in Palatine, IL, has expanded its owned offices by three.
Starck has purchased three preexisting Prudential office locations and also procured franchise rights to the Prudential name. By my count, this adds to the 11 Illinois counties that
Starck (Now Prudential Stark) holds real estate brokerage offices in.
We received a phone call yesterday asking if we were aware that Prudential bought Starck Real Estate.
Incorrect.
Starck Real Estate, corporate office in Palatine, IL, has expanded its owned offices by three.
Starck has purchased three preexisting Prudential office locations and also procured franchise rights to the Prudential name. By my count, this adds to the 11 Illinois counties that
Starck (Now Prudential Stark) holds real estate brokerage offices in.
Subscribe to:
Posts (Atom)
