Huge Real Estate Sale!

Huge markdowns! Buy now and save thousands!

That's what I want to say, anyway. I'm looking at all the post holiday frenzy with all the retailers out there clamouring for your attention (and dollars) and I'm thinkin', "Hey! Why not advertise the real estate the same way?" It's the same story, after all. Just like the retailers, there's too much inventory! Sellers are desperate for some liquid cash. And they're out there practically begging you to take their properties off their hands. Check out these extreme numbers for the third quarter in Chicago. (Percentages compared to 3rd quarter 07. These numbers don't even include the precipitous drop of the 4th quarter!)

Biggest price drops in Chicago real estate
3rd quarter, 2008

Multi units:
West Garfield Park -59%, (11 units sold,) East Garield Park -55% (15 units sold,) Forest Glen -55% (1 unit sold,) Humbolt Park -51% (28 units sold,) Hermosa -50% (10 units sold,) North Lawndale -50% (23 units sold,) Austin -43% (45 units sold,) Logan Square -41% (21 units sold,) West Ridge -40% (15 units sold,) Belmont Cragin -40% (19 units sold.)

Condos/townhomes--
Biggest price drop in Beverly -40%

Single family homes
West Garfield Park -93% and East Garfield Park -77%

(gleaned from the Chicago Association of Realtors® quarterly statistics)

Before you start imagining the end of the world and the demise of real estate and all of us living in shacks made of twigs and leaves, I want to point out that some prices have gone up. Believe it or not they've gone up significantly too:

Multi units --
Morgan Park +85% (1 unit sold,) Archer heights +33% (1 unit sold,) Near North Side +18% (2 units sold,) Norwood Park +18% ( 2 units sold,) North Park up + 18% (3 units sold,) Washington Heights +15% (1 unit sold.)

Condos/townhomes--
Hermosa had a 46% increase in average price.
Closest Runner up - Morgan Park with 33%.

Single family homes --
Washington Park's +194% on 1 unit sold.
Runners up are the Near North Side's +100%
and Douglas +49%.

Now most of these just reflect a couple of high end units in a not so high end neighborhood, but it does show that there are some positive trends. These are just slices of data. I've got numbers going back 10 years. For the big picture, contact me!

Looking at these stats is killing me. If you're one of those people who like me has been watching these prices drop and is just itching to buy, but you're hearing horror stories about financing -- They are true! Money is tough to borrow right now. If you're credit score is under the mid 700's you'll have a tough time getting conventional financing. But there are still options out there. Rent to own and owner financing are on the rise. Please, please, please be sure to get an attorney and read the fine print! There are big pitfalls you can and should avoid. The sellers will try to take advantage if they can. In this market there is no reason to sell your soul.

And things are changing fast! Every day it seems the mortgage rates change. Like just before Christmas when they dropped to an insanely low 4.5% on a 30 year fixed. The moment was ever so brief. Rates were all over the map that week. A lot of us our holding our collective breath as we wait for the Obama administration to step in and rescue us all. More change is coming for sure. We just have to be ready to take what comes and grab the opportunities we can when we can. They may be fleeting.

(To see what I mean about the insanely low rates, take a look at this chart put out by Freddie Mac for a glimpse of what mortgage rates have been over the past 30 years, http://www.freddiemac.com/pmms/pmms30.htm

As Warren Buffet says, When everyone's fearful, it's time to get greedy. Think about your future and how you're going to make yourself secure and happy down the road. You could be like Dave, who I met last summer. He bought up properties in Ukrainian Village in the eighty's. Together with his properties in other parts of the wold, he's now making enough money to spend his mornings reading the paper and sipping coffee, his winters in sunny Florida.

Here's to a prosperous New Year!

What's a Short Sale Anyway?

If you're out shopping for a home these days, you're likely to come across something called a "short sale." These homes are being offered for sale for less than the amount owed on the mortgage. Banks will accept short sales because foreclosure is expensive, risky and time consuming for them. Such sales can take a bit longer than a typical sale as the offer needs to be sent to and accepted by the bank. The loss mitigation department has to work it's way through a giant stack of these offers lately, so getting a yes or no on your offer can take a month or more.

If you've got the time and patience, this can be a great way to get a home for a great price. Quite often the person on the selling end is just as happy to have the problem of selling their home solved. Unlike foreclosure, short sales cause little damage to their credit, so you can feel good about buying the home and also unlike foreclosure, you get a chance to see inside the home before you buy. It really can be a purchase to feel good about.

If you know anyone who is worried about facing foreclosure, or is afraid that they won't be able to make their next mortgage payment, please do them a favor and tell them to contact their bank right away. They have many options if they are proactive and start the conversation before they are overdue with a payment. A knowledgeable Realtor® can be a terrific resource even if they want to keep their home. Feel free to send friends with questions my way. I'll do all I can to find the answers for them.

If you'd like to learn more, go to http://rismedia.com/wp/2007-12-18/top-three-short-sale-trends/