It Ain't All Big Hair and Cadillacs

Chicago - that t'totallin' town! According to the Chicagoist, the only cities in the US that outdrink us are Austin, San Francisco, Providence and Milwaukee. Ok - Milwaukee is not a huge surprise considering you could take one step in Brewer's Country and essentially fall into a bar.

Providence? PROVIDENCE? I guess if I lived there I'd drink too - heavily.

Austin and San Francisco are interesting. I'd take San Francisco as more of a - er - natural, kinda herbal city. Austin? College town - 'nuf said.

According to the article, "62 percent of Chicagoans had had at least one drink in the last month, 5.4 percent were regular drinkers, and 20.4 percent had consumed five or more drinks on one occasion."

Geesh - PEOPLE! What are you waiting for? A six pack includes 6 individual cans - hence the name - SIX PACK! Why would you stop at 5?

Drink up Chitownians! *hick*!

I admit my mind works a little differently than most - I like to write and talk about things that are current - so, in light of the past week’s recent events, I decided that I wanted to correlate last week’s LA earthquake, the current credit crunch and my recent trips to Costco into a meaningful discussion regarding real estate. Surprisingly, there is a high correlation.

I have a habit of sharing my addictions as many of you well know - caffiene - and yes, Costco - sad to say, I often find myself “dining-out” with the combo pizza, occasionally the chicken caesar salad, 2 hotdogs (for my dogs) and let’s face it - the 2 drinks are essentially free. Critical in today’s tough economic times.

You ask - how is this even remotely relevant? Well - after hearing the news regarding the quake, and the follow-up public service announcements locally on the radio questioning what my emergency plan is in the event of an actual emergency - have I made the necessary arrangements for 72 hours of provisions - bottled water, food, batteries etc?

I immediately thought - I need to go to Costco.

Prior to my almost twice weekly adventure - mind you there are 2 of us plus 2 dogs - I checked to see what I needed - a quick scan of the pantry revealed 36 boxes of Mac & Cheese, 24 rolls for toilet paper, 72 bottles of water, two 128 fluid oz bottles of Neutrogena handwash - fridge check - 4 gallons of milk, 36 eggs, 128 oz of mayo and 48 slices of Timberlake muenster cheese. Hmm - no batteries.

Off to Costco.

Being a Sagitarius, I am by nature an optimist, however, in light of my chosen profession, I am becoming intimately familiar with actual emergencies - the professional kind. I’ve negotiated some tough deals, fended off irrate clients - but the emergencies I am speaking of are realtor’s-life threatening. I Twittered briefly today with fellow “hound” Tom Vanderwell regarding Meredith Whitney’s interview on CNNMoney.com regarding the nature of the credit market. She has a fairly solid track record of getting her predictions right. I also recently read Crain’s Chicago Business and its article regarding the latest market statistics in Chicago - their real estate category clearly highlighted how the subprime mortgage fiasco directly affected the Chicago area.

After reading the Crain’s spread, I was unnerved regarding the following statistics:

1. Half of Illinois residents with a subprime mortgage have made a late payment
2. Nearly 80% of the 144,341 subprime mortgages in Illinois as of December, 2007 were in the six county area. Cook County represents 80,800 of the 144,341 of subprime mortgages held in Illinois or 56%.

Statistically, of the subprime mortgages held:

1. 59.6% are current on their payments
2. 10.2% are 30-59 days past due
3. 5.4% are 60-89 days past due
4. 8.0% are 90+ days past due
5. 12% are in foreclosure
6. 4.8% are REO or Real Estate Owned - they have been foreclosed and are currently bank owned.

75% of subprime mortgages issued in Illinois are adjustable rate mortgages. In Chicago and surrounding suburbs, 80% of these loans are scheduled to reset in the next two years.

These latest stats in Chicago, combined with Meredith’s comments regarding the still to continue contraction of capital available for lending due to the downgrading of mortgage backed securities, indicates to me that whatever buyers that are currently active in the market will continue to be pressed with fewer lending options. Yes - lenders are lending - but to a far fewer number of buyers.

Needless to say, the deals aren’t coming together quite as briskly - I’ve put off buying the “wants” versus the “needs” - and even though the 36 boxes of Mac & Cheese sounds like alot, I’m finding it complements the rotisserie chicken quite well. There are some that are saying that some markets are hitting bottom. Quite frankly, at the risk of sounding alarmist - I sense we are not yet into the thick of it.

Granted the recent Federal Housing Bill 3221is intended to assist in providing the necessary capital to keep the mortgage market afloat, however, until lenders work through the write-downs of the assets, i.e. the houses in various stages of foreclosure, I doubt the new Federal housing bill will truly free up money for buyers in the short term. No matter how well staged or well priced a property is, I don’t think it’s going to get any easier to sell. Dropping the seller assisted downpayments will hurt.

This begs the question - while counter intuitive to a market of historically low interest rates, will seller financing become an attractive way to sell real estate? I think for the sellers that still have equity and are in need of selling, it might be worth discussing. If the Chicago statistics are any indication, I’d say we’re in this pickle for at least a good 2 more years.

Needless to say - I sense that my life is going to get a bit more Mac & Cheesier. I’ve been praying alot harder too - I’ve been asking the Man upstairs to please send me cash buyers.

Ok - I guess I’m going to make another trip to Costco. May as well pick up some more Mac & Cheese and candles - for novenas. Does Costco sell plastic injection molders? I thought I’d pick up one of those and crank out a few Saint Joseph statues. I hear he’s been working overtime.

It was a beautiful day today so I thought I would spend some time on the construction site at The Rotunda - here is my latest video diary:

Hi All! Just wanted to post my own version of a virtual open house. Traffic today was incredible! 20 people walked through this unit. For those of you who didn't have a chance to visit this great unit, I've included a brief video of the property's highlights.

According to Crain's Market Facts 2008 report, here is the latest and greatest stats regarding Chicago. Some interesting factoids to nibble on:

By 2013, Cook County is the only county in the Chicagoland metro area to have a projected decrease in population:

2000: 5,376,741
2008: 5,392,784
2013: 5,378,813

How old is the median Chicagoan? In 2008, 34.8 years old - increasing 4% since 2000. We must like it here - I guess we're just growing old together.

Highest population growth in Chicago:

1. Near West Side (west of Halsted and south of Van Buren) from 2000 to 2008 = 71.65% increase
2. Near North Side (Halsted south of Division) from 2000 to 2008 = 65.54% increase
3. Near South Side (South of Cermak and Michigan Avenue) from 2000 to 2008 = 28.22% increase.

Highest population decrease in Chicago:

1. Near West Side - because the area may have more than one census tract, the area is also decreasing. From 2000 to 2008 = 5.7% decline Basically, they don't know if they're coming or going.
2. Washington Park - the projected site of the Olympic Village. From 2000 to 2008 = 4.1% decline.
3. Hyde Park - From 2000 to 2008 = 3.6% decline.

While this may not be a shock to most of us who live in this fair city, the cost of living in Chicago is higher than the national average, however, it is still cheaper to live in Chitown than in New York or Los Angeles - um - duh.

An interesting revelation? Where Chicagoans fall in terms of what we earn - we ranked third, not behind New York and Los Angeles, but New York(1) at $49,789 and Houston(2) at $43,174. Chicagoan's per-capita personal income came in at $41,591, y'all.

When it comes to where we spend it? Windy City residents pay a higher percentage of their mulah on entertainment, healthcare and charitable contributions. When you need to stop for cash for that dinner out? Chase has the most bank branches and ATMs in Chicago - second is Bank of America.

Puff out your chests fellow citizens on the lake - ALAS! Chicago as a city ranks third in gross domestic product in the US. The city of Chicago's economy ranks between The Netherlands and Turkey relative to global GDP ranking - our economy is larger than Turkey and Belgium! Drink all the beer you want Belgium, we're still kickin' yer ass.

When it comes to healthcare, just over 1 in 4 people in Chicago are without health care coverage. A pathetic statistic that I truly hope gets addressed under our next administration. On the bright side, if you die in Chicago - regardless of whether or not you're a male or female, it's most likely due to heart disease.

We're darn generous to those who wait on us while we dine and imbibe - Chicagoan's tip an average of 19.1% - the national average is 19%. We eat out an average of 3.2 meal per week, probably while reading "A New Earth Awakening to Your Life's Purpose" - the number one best seller in Chitown.

While all those facts are indeed facinating, let's get to the stuff that really matters, shall we?

REAL ESTATE!

The number of homes sold in the Chicago area in 2007 fell 20.6% on average - 20.1% in Cook County. The median home price - not necessarily the best indictor, remained flat in 2007. Median price in Cook County in 2006 was $255,000 increasing to $266,000 in 2007.

The median monthly cost of ownership without a mortgage in Chicago = $559 With a mortgage is $1,840. Slightly higher here in Chicago without a mortgage than Los Angeles and less than New York and LA with a mortgage.

How did the subprime mortgage fiasco affect Chicagoans?

1. Half of Illinois residents with a subprime mortgage have made a late payment
2. Nearly 80% of the 144,341 subprime mortgages in Illinois as of December, 2007 were in the six county area. Cook County represents 80,800 of the 144,341 of subprime mortgages held in Illinois or 56%.

Statistically, of the subprime mortgages held:

1. 59.6% are current on their payments
2. 10.2% are 30-59 days past due
3. 5.4% are 60-89 days past due
4. 8.0% are 90+ days past due
5. 12% are in foreclosure
6. 4.8% are REO or Real Estate Owned - they have been foreclosed and are currently bank owned.

These statistics alone clearly show that we are far from out of the housing mess in Chicagoland. 75% of subprime mortgages issued in Illinois are adjustable rate mortgages. In Chicago and surrounding suburbs, 80% of these loans are scheduled to reset in the next two years. If you have an adjustable rate mortgage, be sure to find out if you are eligible for the new FHA government backed refinance program.

While there are a number of other statistics worth mentioning, there is one that I found that might just cut both ways. Chicagoan's divorce rate is less than 50% and below the national average.

While that statistic sounds hopeful, I can't help but think that we simply prefer to live in misery? Surely I jest - um - hello?

So - how many outstanding parking tickets do you have? Well, if it's more than 2, pay up or get the boot! The Chicago SunTimes this morning had it all in black and white.

In order to close the widening $400M budget gap in Chicago, Mayor Daley's rather unpopular plan is to subject any person with more than two outstanding parking tickets or two redlight violations the distinct pleasure of having their car incapacitated with the device called the Denver Boot. History has shown that the plan has actually brought in the dough. In 2002, the city reduced the penalty from 5violations to 3 which generated $8.2M smackeroos - that ain't chump change.

City Alderman aren't finding the plan bootylicious - many are concerned that any additional financial burden on their constituents will only worsen the financial strains due to the current economic downturn.


Speaking from personal experience, getting the boot ain't no Rocky Mountain High. It is FAR cheaper to pay the tickets. If you dare to play Russian Roulette with the City's Department of Revenue, just know - according to the SunTimes article, last year, Chicago booted 58,886 vehicles. The booting rate is up slightly this year -- to 29,719 through June 30 -- thanks to vans equipped with automated license plate readers. They stalk the streets at all hours.

Come to think of it - make sure you have your new city sticker too. Um - when I got the boot, I didn't have the new sticker either - again - fun? Not so much.

Ya know - I’ve decided that I want run for Congress - my dilemma: overcoming the paradigm that one aspires to move up and not - um - down. BUT! Just think of all the fun I’d have riding the train under The Capitol - sitting in convertibles waving at my constituents in parades, playing golf with my lobbiest “buddies” - Ahhhh - what a LIFE!

Honestly, though - I think the best part would be sitting in commitees and writing legislation. Imagine sitting in a big room covered in mahogany wainscoting, sitting in a cordovan leather highback chair behind the massive, hand carved desk with my BIG brass name tag in front of me -I might even have a microphone in front of me. My voice would boom while speaking down to the little peop - er - constituents - um - not MY constituents, but constituents nonetheless.

My esteemed colleague would be standing behind me whispering where the guys were going to meet up for drinks after the hearing while the pathetic homeowner in front of me goes on and ON AND ON about how some slick mortgage broker sold him a bill of goods and now he can’t make his mortgage payment. But I feign to listen because it’s only for a few hours and then I get to ride the under ground train with my buds ‘cuz tonight I’m drinkin’ and schmoozing with da bankers!

Just think about it! I’d get to drink single malt scotch while Jimbo Biggidy Big Banker throws his arm around my shoulder, pulls me aside - walks me out on the patio at The Capital Grille, hands me a cigar and tells me that those wacky Wall Street boys - ha ha - you know the type - custom shirts and suits from Hong Kong - well they really blew it. Look at ALL that hell they’ve caused.

Jimbo likes to talk in the third person.

Tommy - Jimbo’s bank is losing money. How was Jimbo supposed to know that people weren’t going to be able to pay for all of those mortgages? I mean housing always goes up - ha ha *slap on the back* right?

I mean - if I have to write down the value of all those assets - well -um - you see Tom, Jimbo and Marge won’t be able to host that ski junket in Vail this year - and we all know how much Tommy LOVES to ski.

Dammit! There is no way in hell I am NOT going skiing in Vail this year.

So Jimbo - let’s just say I get a few of my esteemed colleagues together - write a few rules and regs - make sure my boss covers your ass. You won’t lose a penny more on those declining assets - I mean, if you have to write them down to say - 85%, will that keep Vail in the running? Let’s face it - you can always foreclose - I mean who wouldn’t want to find a bargain?

Not sure if you’ve visited TruliaVoices lately - there is an active thread currently running, at last count, 1,599 responses. I believe that is the longest running thread in Trulia’s fledgling history. The poster has since updated the question with more information qualifying the question due to the overwhelming number of responses, however, the basic question is, “Why should someone buy in this market?”

When initially posted, the question was a legitimate query into an expert’s view as to why someone in the poster’s circumstances should buy in Chicago. Personally, I had a problem with the question - should the response be a multiple choice response?

a. buy low, sell high
b. interest rates are at historically low levels
c. Jill is half as tall as Bill and 3/4 tall as Sally
d. Vicodine
e. There is insufficent data to answer to this question

I like “e” - and for the first time in almost 30 years, I can now fully appreciate the significance of that answer on the SATs. For those of you who found Vicodine to be the logical choice, may I suggest an intervention?

Ok - so I’ve been following the thread from time to time, watching it morph from being a useful discussion to - lately - a discussion regarding the existence of nuclear weapons in Israel. Almost like a game of telephone gone bad. More disturbing to me however is how the question has evolved into a rhetorical question “WHY THE HELL would someone buy in this market? What are you, an idiot?”

If you’re familiar with the TruliaVoices rating scheme, you understand that comments are rated by either a thumbs up or thumbs down. Honestly, I think there’s a conspiracy brewing. As you read the responses of the many realtors who answered the question, “There is no better time to buy!”, many of those responses were met with a burrage of thrumbs down. You can almost hear the resounding “BOO!”, “LOSER!” - you know, while you’re at, why don’t you just poke me and call me fat.

On the flipside, the number of written responses as insults were flying back and forth, discrediting realtors who provided insightful responses to a fairly ambiguous question. Again - thumbs up to the responder who really stuck it to the realtor - thunderous applause - BRAVO!

I think the collective mindset - or groupthink has become, any agent who tells a consumer to buy in this market is nothing but a realtwhore. Of course you want to tell people to buy, otherwise you won’t make your ridiculous commissions.

Well, I don’t think NAR’s national campaign blanket statement, “There’s no better time to buy! Consult your local realtor” has gained us points in the credibility deparment. A good majority of consumers aren’t convinced. Honestly, I did whince at a few responses (some with big hair) - shiney, happy people providing generic responses to a very generic question. Interest rates are low, inventory is high, it’s a buyers market! Buy! Buy! Buy! Sorry - they do kinda sound like realtwhores.

It’s a tough crowd in there, many of whom are well armed - spouting out data statistics from Standard and Poors, the Case Shiller Index, weighted averages etc. Even Fortune magazine wrote an article about the state of the market. Astonishing that Fortune’s article had higher credibility that a broker of greater than 20 years experience who has shared her thoughtful, specific responses throughout the thread. Hmmm - I thought Fortune sold magazines, not real estate? Why is the Case Shiller Index the defacto standard instead of NAR’s market stats? … because NAR’s nothing but a bunch of realtwhores.

I will say I did find a great deal of humor by reading the responses. I’ve been following the thread and have noticed a good number of real estate professionals’ responses. Many continue to dent their armor, they stood their ground - they took a few for the team, but then again, they do this for a living.

I couldn’t help but be struck by one agent’s response who up until then had been fighting the good fight, but then sheepishly admitted, oh I don’t actually use this site as a prospecting tool, I just come here from time to time and “check-in”.

Excuse me?

Let me get this straight - you fill out a profile in detail, providing all of your contact information, designate yourself as a real estate professional, actively participate in discussions, follow a thread that has grown to almost 1,600 responses, share your knowledge and expertise, but you don’t want consumers to think you’re a realtwhore - is that was you mean?

Who are you kidding? After I read that - the groupthink just took a survey: *DING*DING*DING, survey says *REALTWHORE* Suffice it to say - when a potential client now calls said agent, it is their duty to say - oh, I’m sorry, while I appreciate the fact that you enjoyed my knowledge and experience, I was not seeking any potential business - I’m afraid I can’t help you - I’m a realtor, not a realtwhore.

Some how realtors who admit they use social networking sites as prospecting tools are looked upon as less credible. How far from the truth can that be? When you establish a web presence, you’re prospecting. Consumers are using these sites in exponentially increasing numbers. While some consumers enjoy the game of discrediting the experts and the realtwhores, a greater majority are seeking sage advice. They need expertise and knowledge and they are seeking out the experts. Groupthink tells that buying and selling is a do-it-yourself job. For some that very well may be the case - some are not seeking to be converted and you know, that’s ok. Where better to draw the distinction between a realtor and a realtwhore?

Regarding my own TruliaVoices involvement, in my own professional way, I would like to address the few of you who gave me thumbs down on my incredibly insightful responses. No - for you who choose to discredit me - I will not pick up my toys and leave the sandbox. Nope - instead I want you to follow these simple directions:

Apply lips firmly to my right buttock. Pucker and release. Repeat.

Now see? It’s all in the delivery.

Ok - I have to admit it - I am finding that I have more idle time in my day - clearly my time blogging has not yet resulted in the deluge of qualified buyers and sellers that are promised by the "experts". So, as a social experiment, I have decided to blog more in the attempt to attract more buyers and sellers -

here goes...

Aside from being a self-subscribed caffiene addict, I also realize that I have become unhealthily (is that a word?) addicted to LinkedIn, Twitter, PropertyQube and Trulia - as well as additional social networking sites that serve the real estate community. Facinating! I continue to be drawn into the discussions and quite honestly, I am learning some really great stuff.

In my idle boredom, I decided to throw out my own questions because I am excited about the prospect of learning from my peers as well as possible clients.

I threw out a few questions - what sites do consumers like most when searching for property? - what's the most creative marketing you've done / come across in marketing a property?

and - what I felt was a fairly innoquious question, "What are a real estate agent's core competencies?" I wanted to hear what other agents had to share regarding their skill sets - what ultimately creates value and makes them money. Many of the responses were great. I was surprised, however, that I received so many responses that I honestly felt simply missed the mark. I received one response telling me my question was "odd".

Disclaimer: I do not know everything about buying and selling real estate and I do not profess to be the source of all information. Ok - now that I have that out of the way - people - core competencies are the value-added activities we do - many of which are intangible - that justify getting paid for what we do as real estate practioners. Cha-ching.


I am a practitioner - I continue to practice until I get really, really good at what I do. But practicing is an appropriate word, because as the landscape of the real estate environment changes, we must continue to hone our skills and knowledge. But key to all of that is - finding the intersection between our core competencies and meeting our clients needs.

I referenced the changing landscape of real estate because there are an onslaught of technology solutions hell-bent on eating our lunch. Many of these solutions are meeting the needs of the consumer because we have either failed to understand the need or have neglected to tell the consumer how/why we're valuable.

If a client wants to search for their own property - let them - or perhaps we may be able to do a better job sifting through the rift. If a client wants to do the analysis of the comps - let them - or perhaps we need to expertly assimilate the data in a way that imparts our specific knowledge of the property types, the neighborhood and the specifics regarding where the market is headed.

Sometimes experience and intuition is worth something.

If a client wants to negotiate their own contract - let them - or perhaps we should share with them the skills required to provide a win-win for both parties - so after the ink has dried, the deal still sticks.

Maybe the commission based model isn't in our best interests as real estate practitioners because it fails to articulate the real value-add of the many things we do to get the job done.

Ask yourself - what is at your core? Anyone? Buehler?

If the housing turmoil isn't enough, caffiene addicts have more to worry about - the closing of Starbucks locations. While the closings aren't necessarily unexpected, collapsing coffee coffers may be due to Starbucks departure from their discplined approach regarding the selection of locations. Starbucks was considered the master in real estate selection, grinding over demographics, traffic patterns, VPH statistics etc. Growth expectations may have gotten the best of them.

I guess we learn time and time again - stick to the fundamentals - seems they work.

From a realtor's perspective, the advent of a new Starbucks location was a telltale sign of a "hot spot" or an up and coming area - not so much anymore. Many a buyer has told me, "If I can't walk to a Starbucks, I ain't buyin' it." How's that for loyalty?

I am a self-confessed caffiene addict - I like it simple: a venti black-eye. When hearing of the 600 store closures, I was rangled - concerned that my daily routine would be seriously altered - however, I was happy to find out that Chicago and its suburbs dodge the major bullet, Chicago only 5 locales, collectively - Chicago and suburbs 24 locales.

Now - I feel for those now afflicted - let's just say I'm glad I'm not selling real estate in Florida. It's hard enough living in a state where property values are dropping 30%+ in value. Take the Starbucks location away - it may as well be worthless.

I just read the recent posting to Joel Burslem's blog, Future of Real Estate Marketing, Millions of Listing Oh My regarding the lastest statistics regarding the total number of listings now available online from the real estate search portals.

I read the numbers and I can't help but yawn. So what. So now consumers can have access to all the available properties online - there's plenty of data now available online. But is Web 2.0 solutions for real estate really all about the data?

1000Watt consulting has developed a Real Estate Web 2.0 mindshare map which classifies the players in the real estate technology space and where they play. As a real estate practitioner, I come across both buyers and sellers who are actively engaged on many of the sites on the map searching for their new home - doing the comparisons and grinding out the data. Why do I need a real estate agent when I can do my own search? I can do my own comps - all real estate agents do is look up property on the MLS and drive me around to look at houses I have already found.

Wait one cotton-pickin' minute Guggliomi! Do consumers really think real estate agents just look for property - property listings already available through many of the players on the Web 2.0 map? I think someone with the experience who does the analysis on a day to day basis has a better basis for assimilating the data personally, but that's my opinion.

Regardless, I still don't think the Web 2.0 data driven solutions are the answer. As I scour the map of players, I am struck by the scope of the playing field - and the categories. It simply hit me that there really is no comprehensive solution which is addresses the real estate landscape. No current offering provides an intuitive process approach that follows the natural progression of a real estate transaction.

While many sites such as Trulia allow users to interact and share knowledge and expertise in TruliaVoices, it is generally disjointed and lacks the context within the natural progression of the process of buying or selling real estate.

Why is this important? Because consumer still don't know what they don't know. They think the process is all about the data. Who's fault is that?

Walk Score just ranked Chicago the 4th most walkable city in the US of A. San Fran took numero uno, The Big Apple #2, and Bean Town #3.

The most walkable neighborhoods in Chitown you ask? Why they're The Loop, Near North Side and beautiful Lincoln Park. For those who like to do a walk-about in the city of big shoulders, check out City Walks: Chicago: 50 Adventures On Foot The deck is also available at Climate Home - 2462 N. Clark, 1971 N. Fremont or 1702 N. Damen.

Even for the born and bred Chicagoan, this deck of cards has recommended city walks in 50 neighborhoods throughout the city. I suggest them for dog walkers too.



The cards provide the route in a map format - the flip-side provides points of interest and historical information regarding the area - honestly, one of the best investments for learning more about the Windy City

I just added a new badge on my blog to allow viewers to click to my new profile on PropertyQube - again, a great find due to my twitter trolling. I really love the fact that I was able to syndicate my blog to PropertyQube.

There are many social networking sites that - ActiveRain for example, however, I can't syndicate my entries - i.e. post once, distribute many. I want one and only one place to blog - thank you PropertyQube.

The benefits or Twitter are endless! I found a really great blog written by Joel Burslem - a fellow Twitterer. His recent post refers to the mindscape for technology players for Web 2.0 for real estate - clearly there is no shortage of solutions in real estate - yet, as a real estate professional, I still feel that the solutions seem to be so disjointed.

As I look at the players in the social media space - and from my experience working with clients - time and time again, I am struck by the consumers lack of knowledge of the process of buying and selling - and the basic facts that consumers lack eduction in the process.

There are many tools which address opening the floodgates to the data trapped deep inside the MLS - analytical and search tools abound, however there is again a lack of general knowledge of the process of buying and selling. As I like to say, the consumer simply doesn't know what they don't know - this is the value that realtors provide, yet as a realtor I can say that we don't do the best job in educating the consumer.

I think a void that needs to be filled - and I believe it is a possible social media solution - is a collaborative environment - a wiki - where consumers gain process knowledge.

I have found my new addiction - TWITTER. As first, I wasn't sure what value it provided until I started to stalk - er...follow a few people in real estate and the social media space.

Needless to say, I am an addict. Not only do I have direct access to individuals and leaders who have tremendous mindshare in the social media space, I can TWEET with fellow colleagues about real estate, technology, my dogs - ah, the possibilities are ENDLESS!

This is more than a vehicle for marketing my clients' properties etc, it allows me to learn more about the exponential evolution of technology and its impact on my industry/business, plus I get to connect with some really smart people.

With the significant downturn in the real estate market, where will the real opportunities be?

From a seller of real estate - one who has the equity but needs to sell, perhaps the way to sell is to provide seller financing. The concept of a land contract has not been common during the times of easy money, however, it appears to be a new way for sellers to actually sell their properties. There are still qualified buyers capable of buying properties, but in light of the current credit crunch, they simply may be unable to get a mortgage.

In terms of private equity, there may be a growing market for private mortgages - not seller financing, but perhaps pools of private equity that may be able to bridge the gap.

My gut tells me that mortgage rates are going to climb and probably quickly in the near future, further squeezing out buyers - perhaps the worst is truly yet to come?

I had a light-bulb moment yesterday during a closing - yep a closing - that word has not been spoken alot lately - good news is, real estate is still selling - but I digress...

Here is some background information:

The process was second nature to me, needless to say, things come up during closings that are unforeseen - bottomline, I leave it to the legal professionals to work it out. However, my clients were uncomfortable with the nature in which documents were shuffled, stacked, signed, faxed etc with little or no explanation as to exactly what needed to be read, signed, explained etc. "Just Sign Here."


Unfortunately my buyers' attorney was not present during the closing and hence had to explain the significance of each document - what to sign and where to sign etc via the telephone ... My buyers had a less than ideal experience with the seller's attorney - she was extremely unprofessional and condescending to my clients with her terse explanation of why there was a delay from the seller's side in providing a clear and merchantible title. In addition to the mortgage, there was a lien on title which needed to be removed prior to transferring the title to my buyers.

During the laborious process of signing documents, the closer presented my client with a disclosure form, required by HUD to inform my client that that seller's attorney was an agent of the title company. As per Federal Law (RESPA) requirements, the disclosure informed them that the seller's attorney would be paid a referral fee for referring the closing to their title company.

Perhaps it would not have been an issue had there been a - hmmm - a more pleasant exchange - between my client and the seller's attorney prior to the presentation of the document. My clients questioned the validity of the referral - needless to say, they didn't feel she deserved it. My clients were not even aware of the fact that there was a financial benefit derived by the attorney simply by selecting a title company - and of course the signed document, while in full compliance, required a signature of acknowledgement that a referral was paid - somewhat after the fact.

To be clear, I don't fault attorneys in any way for deriving referral fees from title companies. I often pride myself on how I try to educate my clients thru out the process, trying to be as informative and provide as much information regarding disclosure as possible - however, it simply dawned on me that while this disclosure is relatively insignificant, it highlights the fact that consumers simply don't know what they don't know.

What even prompted this entry was the reading of article related to a study that questions the true effectiveness of RESPA, perhaps allowing the states to better regulate the settlement services.

Laws do not equate to better education or necessarily to better disclosure. Regardless of federal and state laws designed to protect consumers, I as an agent cannot minimize what is significant or insignificant as it relates to disclosing information. Consumer education regarding the purchase and sale of real estate is so critical, yet some many of us as real estate professionals fail to provide in-depth education of the process. Again, what was second nature should have been more thoroughly explained.

Perhaps the best way to leverage new technologies for real estate would be best leveraged in education regarding the PROCESS of buying and selling real estate and not on FINDING property - or maybe combine the two. Hmmm - now that sounds like an idea.

While reading this month's Illinois Realtor Magazine, I came across the following site sponsored by the Illinois Association of Realtors and its foundation, the Partnership for Homeownership. The resources for grants, assistance funds, legal assistance, HUD-approved counselors, senior services and energy assistance programs.

The interactive map allows you to select your county - you'll be provided a list of resources in the categories provided.

For those facing a potential foreclosure or currently in foreclosure, IAR's consumer site, www.YourIllinoisHome.com provides an array of resources for people currently facing foreclosure.

In light of the current real estate market conditions, the Federal and Illinois state governments and other non-profit organizations are offering assistance.

If you are in facing a foreclosure, SEEK ASSISTANCE - there are a number of organizations who can help. Most importantly, call your lender! If you are unable to make your mortgage payment, explain to your lender your situation.

US Housing and Urban Development homeowner counseling: 1-800-569-4287

Federal Housing Administration refinancing program, FHASecure

Illinois Legal Aid

Neighborhood Works America Center for Foreclosure Solutions: 1-800-995-HOPE(4673)

Our Own Home, Illnois Treasurer's Office loan and refinance program: 1-800-803-4663

Where's the good news regarding real estate? Here's some counterpoints to why you SHOULD buy and buy with confidence in Chitown - the Windy City - The City of Big Shoulders - ok, you get the picture. I just wanted to pass along the comments my colleague provided regarding why Chicago is a good bet when it comes to buying real estate:

If this city would get some New York attitude, it sure would help the situation.. If people can not make it here, they are losers.... see Wrigley Field... Chicago has no equal .. we are like the 20th largest economy.. IN THE WORLD. this city.. wake up to the gold at your feet.. the cry baby , un informed consumer needs shut up and buck up.... so pop this in their pipe to smoke..

from Wikipedia.... for memorization

Chicago has the third largest gross metropolitan product in the nation — approximately $ 442 billion according to 2007 estimates.[32] The city has also been rated as having the most balanced economy in the United States, due to its high level of diversification.[33] Chicago was named the fourth most important business center in the world in the MasterCard Worldwide Centers of Commerce Index.[34] Additionally, the Chicago metropolitan area recorded the greatest number of new or expanded corporate facilities in the United States for six of the past seven years.[35] In 2006, Chicago placed 10th on the UBS list of the world's richest cities.[36]

Chicago is a major financial center with the second largest central business district in the U.S. The city is the headquarters of the Federal Reserve Bank of Chicago (the Seventh District of the Federal Reserve). The city is also home to three major financial and futures exchanges , including the Chicago Stock Exchange , the Chicago Board Options Exchange (CBOE), and the Chicago Mercantile Exchange (the "Merc"), which includes the former Chicago Board of Trade (CBOT). Perhaps due to the influence of the Chicago school of economics , the city also has markets trading unusual contracts such as emissions (on the Chicago Climate Exchange ) and equity style indices (on the US Futures Exchange ).

In addition to the exchanges, Chicago and the surrounding areas house many major brokerage firms and insurance companies, such as Allstate and Zurich North America. The city and its surrounding metropolitan area are home to the second largest labor pool in the United States with approximately 4.25 million workers.[37] Chicago has the largest high-technology and information-technology industry employment in the United States.[38]

Manufacturing, printing , publishing , and food processing also play major roles in the city's economy. Several medical products and services companies are headquartered in the Chicago area, including Baxter International , Abbott Laboratories , and the Healthcare Financial Services division of General Electric . Moreover, the construction of the Illinois and Michigan Canal , which helped move goods from the Great Lakes south on the Mississippi River , and of the railroads in the 19th century made the city a major transportation center in the United States. In the 1840s, Chicago became a major grain port, and in the 1850s and 1860s Chicago's pork and beef industry expanded. As the major meat companies grew in Chicago many, such as Armour and Company , created global enterprises. Though the meatpacking industry currently plays a lesser role in the city's economy,Chicago continues to be a major transportation and distribution center. Early in the 20th Century, Chicago was part of the automobile revolution, hosting the brass era car builder Bugmobile , which was founded there in 1907.[39]

Chicago is also a major convention destination. The city's main convention center is McCormick Place . With its four interconnected buildings, it is the third largest convention center in the world. Chicago also ranks third in the U.S. (behind Las Vegas and Orlando ) in number of conventions hosted annually.[40] In addition, Chicago is home to eleven Fortune 500 companies, while the metropolitan area hosts an additional 21 Fortune 500 companies.[41] The state of Illinois is home to 66 Fortune 1000 companies.[42] Chicago also hosts 12 Fortune Global 500 companies and 17 Financial Times 500 companies. The city claims one Dow 30 company as well as aerospace giant Boeing , which moved its headquarters from Seattle to the Chicago Loop in 2001.

I've come across 2 websites that provide a list of foreclosures. The first list is for properties in Cook as well as additional counties in northern Illinois:

http://cook.il-foreclosure.com/

The site allows you to purchase the actual foreclosure documents which have been filed. It also lists the auction service, location, time and date of the actual property auction.

The second site is a national list of real-time filings in 35 states for forclosures which have been filed, www.foreclosurepoint.com. The site provides real-time listings, including property type, address and estimated value via Zestimates where available, and date of filing. Owners contact information is available for a fee if you subscribe to the site.

While foreclosures are becoming more and more common, I thought I would pass along the following article regarding purchasing foreclosed properties at auction.

Ever try to communicate with a 16 year old? My son - a super kid mind you - is 16 years old. Keeping in touch with Dad isn't his highest priority. So, in the interest of communicating, I decided the best way to at least make contact was Facebook. Why speak to anyone when you have Facebook, right?

Ok - so I reached out to my son - as a Friend and sent an email - now I realize at 16 Dad's aren't friends, they're Dads, but in Facebook ya gotta go with the flow - just checking in with him - just wanted him to know that I was still alive.
I didn't expect much of a response, maybe a "hey", or a "s'up?" Nope - I got, "um - dad, aren't you too old to use this site?" Personally, I was amazed I got a 10 word response - was I offended? YES!

While I wanted to reponse - "Dude, don't diss me bro" I took the far more mature approach and said..er..texted, "son, when I was your age, I played a video game called PONG - it was a black screen with a single cursor and I liked it - I liked it just fine!" Too old - TOO OLD?? Okay - I'm still waiting for a response. In the interim, however, I decided to look up my high school classmates - GEESHHHH! Do they look...old. Never mind.

Sorry - I like the song - and after reading the recent comments by Richard F. Gaylord, 2008 NAR President regarding the recent proposed settlement in the case of the United States of America v. National Association of REALTORS, it somehow has new meaning for me.

The lawsuit addressed the rules for sharing data on the internet via a VOW or virtual office website. NAR established rules that gave brokers who operate VOW's control over whether their listings could appear on the websites of other MLS participants.

Richard's comments struck me as odd. The settlement was a win for both REALTORS and consumers. Is it really a win for consumers? His arguement states that the settlement affirms the rights of consumers. The settlement allows consumers to opt out of having their detailed listing information displayed online. "If sellers choose to be online, they can ask that blogging, automated valuations, and false information about their property on an MLS participant's VOW be removed."

How is it a win for consumers to have their information withheld from potential buyers?

Ok - so I've decided that I want to take my blog in a new direction. While I currently work at a full-service brokerage, I have been intrigued with the possibility of building a new business model - one that is consumer-centric not agent-centric - hence, my new name - real estate Ain't All Big Hair and Cadillacs, best spoken in a slow Texas drawl.

I know the name is silly - maybe stupid, but my intent is entirely serious. I read alot about the real estate industry and I am really trying to be vigilant about learning more about the new and exciting tools, applications and companies that are out to change the way real estate is bought and sold.

I recently read one article quoting an industry veteran's response to the question, "What do you see happening in the real estate market in 2008?" One of his responses was, "Technology will speed change and facilitate more consumer-driven solutions and alternatives for buying and selling homes."
Considering I used to develop marketing strategies for service companies, I thought - hmmm - why can't I develop consumer-driven solutions and alternatives for buying and selling homes? Ok - so I've decided that I am going to develop consumer-driven solutions and alternatives for buying and selling homes but I need consumers' input.

Kevin Seney's interview was perhaps a light bulb moment, but so were my discussions with Redfin, the recent Department of Justice's settlement with the National Association of Realtors regarding internet-based real estate brokerages
, NAR's proposed project of building a national MLS database etc, etc. Needless to say, consumers want to be in control regarding the process and feel that the current business model - I call it agent-centric business model - does not promote transparency.

I believe the traditional "agent-centric" business model of how real estate is bought and sold is evolving exponentially - ie the rise of companies such as Zillow, Redfin, Trulia etc. Consumers have more access to data that allows them to locate their ideal property and better tools to determine the value of properties. Neither Redfin and Zillow have complete solutions - Redfin's technology model is based on the reduction of the cost of the traditional real estate transaction by providing rebates to consumers. They view themselves as a technology company in the real estate business. Zillow's sophisticated Zestimates help provide a technology solution to what most would consider an agent's key role, but often times it still requires the knowledge of an experience agent to completely interpret the data. Trulia is social networking with some valuation and property search capability.

While there are other solutions gaining traction, the three I mentioned have take the information traditionally locked up in local MLS' and provide real data solutions to consumers and consumers are eating it up and demanding more - but what is the more?

While consumers have more data, they may not necessarily have the experience to best assimilate the information. In the current environment, almost 80% of consumers who are searching for a new home are using the internet to search for their ideal property. However, not all consumers have the knowledge of local customs and experience to negotiate the best price and terms to purchase their property.

Many need education not only about the buying and selling process, but the financing part, the legal part, the actual market conditions part, the title insurance and title data part, the escrow management part, the property tax part, the transfer fees part etc. Surely there are enormous opportunities in and around any of the issues I've stated - or perhaps a total solution that encompasses all of those "parts", a collaborative real estate environment - sounds sort of consulting-ish.

What kind of solutions and alternatives do consumers want to in order facilitate the process of buying and selling a home? What is critical to making the process work for you? Buehler?

Yep - it's true - The long anticipated project The Rotunda is well under construction at 2741/3 N Sheffield in Lincoln Park - and is slated to delivery in late October, 2008.

The project is an intimate 8 unit elevator building - six 2 bed / 2 bath simplexes all 1,570 sq ft. The additional 2 units are townhomes - one 3 bed / 3.5 bath (2,331 sq ft) and one 4 bed / 3.5 bath (2,896 sq ft). Prices are $499,000, $509,000 & $575,000 for the simplexes - $725,000 for the 3 bed townhome and $750,000 for the 4 bed townhome. All included 1 car garage space.

Click on the title and go to the project webpage for more details.

Ok, ok, ok - so you want to make money in real estate but you don't want to buy - er - real estate. Hmm - I think I understand your dilemma. Everywhere you read someone comments that waiting to buy - or actually buying real estate - is like catching a falling knife. Ouch! But people in real estate keep saying to buy - there's no better time to buy!

Honestly - I'm still on the fence regarding whether or not now is the perfect time to buy. For some properties in some neighborhoods, I agree - there are well priced properties. Not all properties are created equal, however, so I don't believe it is ideal for everyone to buy. If you do buy, make sure you buy smart. Foreclosures and short sales may represent a fairly high percentage of sales in the near term, but not all represent the best deal. Some sellers who are not in financial distress have priced their properties to sell and may be better deals.
Ok - so you still want to make money in real estate, but you still don't want to buy real estate. I think most would people respond by saying - Um - have you taken your meds? I - however - would respond - of course you do! Let's make money in real estate without actually buying real estate.

Ok - I am not Carlton Sheets, nor do I play him on TV. There are ways to actually make money in real estate without outright purchasing a property. Needless to say, this is a tough market in a majority of cities currently. In light of the flood of foreclosures, there are many people in dire financial straights, unable to meet their monthly mortgage obligation, hence forcing a short sale or foreclosure. The deluge of foreclosures is having a significant impact not only on real estate values, it is also putting a strain on local governments in terms of unpaid property tax revenues. Not only are people having difficultly paying their mortgages, in many cases, their property taxes are also in arrears.

This presents an interesting opportunity. While unpaid real estate taxes is not a new phenomenon, the magnitude of unpaid tax bills will have an impact on local government - some bills may go unpaid for a longer than normal period. In order for local governments to generate revenue from unpaid tax bills, state laws allow local entities to sell unpaid taxes at auction.

http://thomasjhall.com/links.php?url=http://www.cookcountytreasurer.com/default.aspx
So - you want to make money in real estate, but you don't want to actually buy real estate? Hmmm - how 'bout buying someone's outstanding tax bill? While this may not make you rich, it may allow you to generate some income while not being fully exposed to the issues related to the purchase of a foreclosure.

Each year the county has an auction for all outstanding tax bills where any qualified individual can bid on the balance due on the available properties with delinquencies. You bid on a rate of return you wish to be paid on the balance of the outstanding tax bill - to be paid as interest. If you win the auction, you pay the outstanding balance. When the property owner pays off the balance, you are paid interest on the balance plus the outstanding balance.

Understand that the owner of the property will in all probability pay the outstanding balance due - if so, you will be paid the balance due plus interest. Here are the details:

http://thomasjhall.com/links.php?url=http://www.cookcountytreasurer.com/default.aspx

Again, this is not a get rich quick investment opportunity - it represents a way to potential make a better than market return on your money in real estate without a full exposure to holding a property that may continue to decline in value.

While still a low probability, you still could actually end up with the property by simply paying for only a portion of an outstanding tax bill. If the balance of any outstanding tax bill is unpaid for a period of 3 years, you can obtain the property as default. Again, a large majority of property owners pay their outstanding balances off, however, in light of the current flood of foreclosures, there may be a slightly greater possibility of actually obtaining a property by simply paying the back taxes.

So - it's not your meds - you actually can make money in real estate without having to actually buy it.

Often times I've seen the Case-Shiller index quoted as an unbiased benchmark regarding the housing market in the US. I read an interesting article written by Blanche Evans, editor of Realty Times, questioning whether the index is truly unbiased. I don't abdicate that the housing market isn't in decline, I am merely adding this info as a balance to the claims that only NAR is biased.

There is a large discrepancy between the Office of Federal Housing Enterprise Oversight, NAR and Case-Shiller percentage declines - the article raises some very interesting questions.

Robert Shiller a Yale economist and Karl Case a professor of economics at Wellesley are the co-creators of the index. It was launched to provide information originally to hedge funds but has now become the defacto index used by many investors and analysts as the "best gage" for real estate values.

What Blanche writes is interesting - the index is licensed exclusively to Macromarkets LLC for "developing, structuring and trading financial instruments". This is very interesting - Macromarkets' products is the Housing Futures and Options index. According to Blanche's article, this index forms the basis for "directly investing in and hedging US housing on the Chicago Mercantile Exchange, where futures and options on the index are traded.

According to Lawrence Yun, NAR's chief economist., when a CME hedge is made, revenues flow to Macromarkets LLC - people hedge when prices are viewed to be volatile.

The icing on the cake - Shiller is founder and chief economist of Macromarkets LLC.

Could it be construed as a conflict of interest? OFHEO and NAR do not have relationships with hedge funds.

I often read and post to a question and answer forum on Trulia - a great site for people interested in real estate, whether you're searching for property or if you simply want to learn more about the process, real estate issues etc.

One question that has generated an enormous amount of interest, postings etc. is "Why Should Someone Buy in this Market?" It's a good question - one that I believe is better answered from a client advocacy perspective. Many of the individuals who have posted are real estate professionals - others are active buyers and sellers in their specific marketplaces.

What I have found is that there is a general tone or sense of distrust of the real estate community from many buyers and sellers - often blatant, rarely subtle. Real estate agents/brokers cannot be unbiased in their responses due to their vested interest in selling real estate - if buyers don't buy / sellers don't sell, agents don't get paid. Hence the dilemma in answering the question, if the market is in decline, why should someone buy?

State real estate license law requires that when acting as an agent I have a fiduciary responsibility to my client. In providing sound council, I must keep my client's best interest forefront in my mind. Regardless of what the law states, buyers and sellers aren't always convinced that their agent isn't necessarily focused on their commission.

The fact remains, some agents consider the cooperating commission in the MLS prior to showing particular properties to a client - even if they know the property may be a perfect fit - if the co-op commission is less than ideal, it may simply not be shown. It happens.

I recently attended an office meeting where the discussion focused heavily on the current state of the market - and even more specifically, how to handle short sales. As we discussed the process of negotiating a potential offer with a lender, the discussion turned to fact that in some cases, banks may not agree to compensation in a short sale, i.e. the cooperating commission that may have been stated in the MLS prior to the presentation of an offer may not be honored. The question was raised - "If there is a chance I won't get paid, why would I want to sell a short sale?"

I think it was a fair question, but again, one that is answered from a client advocacy perspective. If a client asks his/her agent to write an offer for a short sale, the agent should write the offer. Client advocacy is at the center of what we do as agents. We have a responsibility to understand the needs of our clients; We are obligated to work in our client's best interests.

The key to being a client advocate however is to ensure that our clients understand that we are not altruistic. Agents are compensated due to the value of the knowledge and services they provide. Some clients don't need the guidance and knowledge of an experienced agent - that's okay. Not every potential buyer has the same level of risk tolerance regarding an investment. To some buyers and/or sellers, the current market conditions may create ideal circumstances for them based upon their own investment objectives. Advising a potential client to buy in today's market may be based upon their client's own objectives, hence fulfilling our role as an advocate - our compensation should reflect our knowledge and experience to identify the best alternatives for an investment.

All is not doom and gloow - take a look at the article. While the market continues to be in the buyers' favor, values remain strong.


FOR IMMEDIATE RELEASE: February 13, 2008
Contact: Mary Schaefer, Ann Londrigan
217/529-2600


4Q07 Illinois Median Price Moves in a Modest Range;
Buyer’s Market Continues in Early 2008

SPRINGFIELD, IL – Illinois median prices closed 2007 in a moderate range, while slower sales activity may be boosted in the months ahead by the federal economic stimulus package that includes important housing provisions recently passed by Congress awaiting President Bush’s signature. According to the Illinois Association of REALTORS (IAR) fourth quarter 2007 report, the Chicago Primary Metropolitan Statistical Area (PMSA) median home sale price was $248,000, up 1.2 percent from $245,000 in 4Q06. Statewide, the median sale price in the fourth quarter was $191,000, down 4.5 percent from $199,900 in 4Q06. The median is a typical market price where half the homes sold for more, half sold for less.

Illinois home sales (which include single-family homes and condominiums) totaled 27,176 in the fourth quarter, down 22.9 percent from 35,254 home sales in the same period a year ago. For the year, total sales were down 16.8 percent with 139,803 homes sold compared to 168,038 sales in 2006. The statewide median home sales price was $201,250 in 2007, down 1.1 percent from $203,500 in 2006.

“Housing provisions included in the economic stimulus package passed by Congress include temporarily increasing loan limits for FHA, Fannie Mae and Freddie Mac and will help to bolster housing market activity by infusing much needed funding into these mortgage options and thus making the dream of homeownership more attainable for homebuyers,” said REALTOR Kay Wirth, president of the Illinois Association of REALTORS. “Homebuyers sitting on the fence now should be looking at the large inventory of homes available and getting their finances in order to make a move while interest rates remain at record lows. Overall, the Illinois economy is performing very well compared to the rest of the Midwest in terms of job activity.”

The 4Q07 interest rate for 30-year, fixed-rate mortgages averaged 6.27 percent in the North Central Region, according to the Federal Home Loan Mortgage Corporation. It was down from 6.58 percent in the third quarter and also down from 6.29 percent a year ago in 4Q06.

Sales and price information is generated from a survey of Multiple Listing Service sales reported by 35 participating Illinois REALTOR local boards and associations. The Chicago PMSA, as defined by the U.S. Census Bureau, includes the counties of Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will.

In the Chicago PMSA total home sales (single-family and condominiums) were down 28 percent in the fourth quarter to 17,364, compared to 24,120 home sales in 4Q06. For the year, total home sales in the Chicago PMSA reached 92,656, down 20.5 percent from 116,527 sales reported in 2006. The Chicago PMSA median home sale price for 2007 was $254,000, up 2.4 percent from $248,000 in 2006.

“The uncertainty in the national housing market has penetrated into the Illinois economy although the volatility is more muted than for other parts of the country, especially the major metropolitan areas and states like Florida,” said Dr. Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory (REAL) of the University of Illinois. “In terms of prices, the Springfield MSA looks to be stellar during the first quarter of 2008 with other metropolitan areas of the state experiencing the effects of uncertainty at the national level.”

Adds Hewings: “Most metropolitan statistical areas in the state can expect to see the usual rebound in sales in March.”

A sample of counties in the Chicago PMSA with increases in the median home sale price in the fourth quarter compared to the same period a year ago include Cook, up 4.0 percent to $260,000; Kane, up 0.4 percent to $229,990; and Lake, up 1.8 percent to $252,000.

A sample of counties around the state where the median home sale price increased in the fourth quarter include Sangamon, up 16.2 percent to $115,000; Peoria, up 6.9 percent to $112,250; Champaign, up 1.9 percent to $147,627; Jo Daviess, up 5.4 percent to $160,450; McLean, up 1.5 percent to $149,150; Rock Island, up 5.0 percent to $95,000; and Tazewell, up 9.9 percent to $128,000.

“Some areas weathered the fourth quarter well despite the climate of mortgage tightening, lower consumer confidence due to economic concerns and the expected seasonal slowdown,” said Wirth, a broker with Re/Max Unlimited Northwest in Crystal Lake.

“Other downstate areas that saw sales increases in the fourth quarter include Sangamon County (Springfield), Macon County, (Decatur), Iroquois and Kankakee counties and Jackson County (Carbondale),” said Wirth.

In the latest forecast from the National Association of REALTORS, chief economist Lawrence Yun said sales activity is expected to remain soft through the first half of the year despite a generational low in mortgage interest rates. “Household formation was only half of what it should have been last year given the demographics of a growing population and sustained job growth, so there clearly is a pent-up demand from buyers who are on the sidelines,” said Yun.
4Q07 Condominiums

Fourth quarter condo sales across the state were down 28.6 percent to 7,962 condos sold compared to 11,157 in 2006; 43,476 sales were reported for the year, down 17.6 percent from 2006. The median price for a condominium in Illinois in the fourth quarter of 2007 was $225,000, up 5.9 percent from $212,500 a year ago. The median price for a condominium in Illinois for the entire year of 2007 was $223,000, up 4.1 percent from $214,200 a year ago.

In the Chicago PMSA, condo sales were down 28.4 percent to 7,614 units sold during the fourth quarter of 2007, compared to 10,632 in the same period of 2006. The fourth quarter condo median price in the Chicago PMSA was $230,000, up 6.0 percent from $217,000 in the fourth quarter of 2006. For the year, Chicago PMSA condo sales were down 17.4 percent to 41,703 units sold during 2007, compared to 50,488 sales 2006. The year-end Chicagoland condo median price was $228,000, up 4.2 percent from $218,893 in 2006.

The Illinois Association of REALTORS is a voluntary trade association whose 60,000 members are engaged in all facets of the real estate industry. In addition to serving the professional needs of its members, the Illinois Association of REALTORS works to protect the rights of private property owners in the state by recommending and promoting legislation that safeguards and advances the interest of real property ownership.

Saw this article on the Illinoic Association of Realtors website and I thought it might be of interest.

Turning the dream of homeownership into a reality can be both exciting and daunting at the same time. Many renters don’t realize they have the means to purchase their own home or the benefits of homeownership as compared to renting. Whether it’s building equity or getting tax advantages, owning a home can be a great investment for your future. For the majority of Americans, their home is their largest financial asset and a major player in their investment portfolio.

Building financial equity is one of the greatest advantages of owning a home. According to the National Association of REALTORS® (NAR), during the past three decades, home values have increased an average of 6.6 percent per year. If you compare this rate to that of stocks or bonds, you are investing in something with a much steadier rate of return.

NAR estimates that on average, the value of a home nearly doubles every ten years. As a homeowner you earn appreciation on your purchase price, something you cannot earn as a renter. In Illinois, the median home price has increased more than $40,000 since 2002. This value, paired with low interest rates and plentiful inventory makes now the perfect time to transition from renter to owner.

In addition to equity, homeownership has tax advantages that can help you save a great deal of money, something that renters cannot enjoy. According to the Federal Reserve Survey of Consumer Finances, the average homeowner today has 36 times the net worth of the average renter. By taking advantage of federal income tax deductions on property taxes and mortgage interest, you can save thousands annually.

Here are some other advantages to buying a home:

Control over your property
Freedom to decorate and landscape how you like
Fixed mortgage payments
Pride and comfort in owning your own home
Housing security

Renters are the ideal clients for sellers because their offers are not dependent on selling their own home first. The Illinois Association of REALTORS Partnership for HomeOwnership has a number of mortgage and downpayment assistance programs created specifically for first-time homebuyers.

And owning a home has intangible benefits too. Owning a home adds value to communities and gives you a setting to enjoy your lifestyle with the ones you care about.

Copyright, all rights reserved, Illinois Association of REALTORS®
REALTOR® is a registered trademark of the National Association of REALTORS®