Chicago real estate sale prices down? You can still come out ahead

Sellers in today’s Chicago real estate market are understandably concerned that sales prices of home in Chicago neighborhoods such as Lincoln Park, Wicker Park, Logan Square and Roscoe Village are either dropping or holding steady. They’d prefer, of course, to see their homes continually appreciating in value.

No sellers are happy to learn that they could have sold their Chicago condo or single-family home for more money two years ago than they can now.

But maybe sellers are looking at this the wrong way. Yes, they may have to sell their homes for less money today. But what about the home they will purchase after they sell? They’ll be able to buy that one for less money, too. So, while they won’t make as much on their sale, they won’t have to spend as much on their purchase.

Another point: Sellers who have lived in their homes for at least five years have undoubtedly seen it appreciate in value significantly during this time, even with the current slowdown in the market.

It was unreasonable to expect Chicago real estate to continue appreciating in double digits every year. This slowdown was inevitable. The best real estate agents prepared for it, and are ready to help their clients negotiate successfully through this challenging market.

The importance of personal service

We all know that the Chicago real estate market has changed. It’s taking longer for homes to sell even in the hottest of Chicago neighborhoods; places like Lincoln Park, Bucktown, Wicker Park and Lakeview.

At the same time, those selling Chicago condos, townhouses or single-family homes have to be extra careful to price their residences properly. Price them too high, even slightly, and the buyers won’t come.

It’s not impossible for a seller to do well in today’s Chicago real estate market. They just need help … from a skilled and attentive Realtor®.

That last part – attentive – is important. It’s easy to sometimes get lost in the shuffle when you’re working with a real estate agent. Realtors® are busy people. And when you’re working with a large real estate brokerage, sometimes you feel like you’re invisible. Phone calls go unanswered. E-mail messages are ignored. You hear nothing from your agent for days, maybe weeks.

That’s why I feel that in today’s challenging real estate market, it makes more sense than ever for sellers to work with a smaller real estate brokerage. Boutique firms, as we’re known, have fewer agents. But we often have some of the most dedicated ones. And because we’re smaller, we can concentrate fully on each of our clients.

You may wonder if firms such as mine, Eldorrado Chicago Real Estate, can provide the same marketing power as do some of the industry’s largest companies. The answer? Yes.

We place home listings on the Multiple Listing Service, just like the bigger companies do. Atually, we also post on Zillow, Craigslist, YouTube and other sites that many larger brokerages don’t have time to do. We advertise on the Internet and are known as leaders and early adopters of the latest technologies and advancements.

We do everything that the bigger companies do. We’re just doing it for a smaller number of clients. This, of course, means that each of our clients receives personalized service.

So if you’re preparing to sell your Chicago condo or single-family home, think about going with a boutique agency. You’ll be happy you did.

The Chicago real estate buyer-seller battle. Can we avoid it?

Sunday’s Chicago Tribune had an interesting cover story focusing on the seemingly endless battle between those selling a home and those buying one.

The story brought home an unfortunate point for me: I never think it’s a good idea when Chicago real estate buyers and sellers view each other as enemies. I prefer a different approach: Buyers and sellers should be looking for compromises, ways in which to get a transaction done that will benefit everybody.

In today’s Chicago real estate market, it’s common knowledge that buyers have the upper hand. It’s taking longer for properties to sell. There is more inventory in Chicago neighborhoods like Logan Square, Old Town, Uptown, Ravenswood, Garfield Park and Portage Park. All this means that buyers have the advantage when it comes to negotiating sales price and other details in the real estate transaction.

This doesn’t mean, though, that buyers can rip-off sellers. If the seller is working with a skilled real estate agent, the Realtor® should never let this happen.

I’ve never viewed the real estate transaction as a battle. I’ve viewed it more as a negotiation, a civil one. Both parties are supposed to work out the details calmly and politely. There is always room for compromise. Move-in dates can be changed. Home repairs can be taken care of. Prices can be lowered. Most Chicago real estate transactions I handle now include at least some of these compromises.

Don’t buy into the hype. This is not the time for buyers to squeeze everything they can out of sellers. It’s the time, as always, for compromise. The best real estate deals are the ones when everyone leaves the closing table with smiles on their faces.

Not all Chicago mortgage loan officers are villains

I work daily with several Chicago mortgage loan officers. And I can say that our city is blessed to have such talented, hard-working mortgage professionals working here.

I bring this up, because mortgage loan officers, not only in Chicago but across the country, have gotten a bad reputation as foreclosures have risen. Many blame mortgage professionals for persuading homebuyers to take out loans that they couldn’t afford.

It’s true, of course, that some Chicago mortgage professionals acted irresponsibly during the days of the housing boom, signing up borrowers for adjustable rate mortgages with initial interest rates that were artificially low. When the rates adjusted to more realistic ones, these homeowners found they could no longer make their monthly mortgage payments.

But the vast majority of lending professionals did not do this. The Chicago mortgage loan officers, with whom I work, act as financial advisors. They take into account a borrower’s income status and credit history before recommending a mortgage loan that makes the most sense for them.

Remember, a home is still the biggest investment that most people will ever make. And despite our current housing slump, residential real estate is still the safest way for people to grow wealth. A skilled, trustworthy mortgage loan professional can help you achieve this goal.

For those who want proof that Chicago mortgage loan officers aren’t all heartless villains, log onto BusinessWeeek Online, http://www.businessweek.com/. Once there, search for “Jose Pletz.” Pletz is featured prominently in a story by BusinessWeek reporter Maggie Gilmour about former mortgage professionals, who lost their jobs during the current housing slump, who have gone to work for housing-counseling agencies. In this case, Pletz is now working for Chicago’s very own Neighborhood Housing Services, a counseling agency that works to keep people facing foreclosure from losing their homes.

It’s in many ways a heartwarming tale. It’s also proof that the vast majority of Chicago mortgage loan professionals are goodhearted, hardworking people interested in helping people reach their dreams of owning a Chicago condo or single-family home.

Stability in the housing slump? The highest of the high-end

Chicago is no slouch when it comes to million-dollar-plus properties. Just do a quick search on Eldorrado.com and you’ll see: Chicago real estate boasts some pretty pricey properties.

And that’s good news, because the very high-end of the Chicago real estate market is still attracting buyers, even during our current real estate slump.

It makes sense, of course: The wealthiest of buyers, those who can afford $3 million mansions in Lincoln Park or $6 million condos on Chicago’s New East Side, are the least impacted by the housing slowdown. They move when they want to. Not when they have to.

If you are one of the lucky few who are in the market for a million-dollar-plus property, don’t hesitate to buy. Real estate is still a great investment. Housing prices here have slowed, certainly, during the real estate slump. But they haven’t come close to crashing. In fact, in most city neighborhoods, housing prices have not only held steady during the worst of the slump, but have actually continued to appreciate.

This is good news for the rest of the housing industry. As the high-end properties retain their value, they help keep the market strong for more moderately priced homes.

So, yes, in this case, the rich getting richer truly helps our economy and the Chicago real estate market.

Should you invest in foreclosed Chicago real estate?

By now, you’ve probably heard the news: The number of foreclosures in the country has reached an all-time high.

That’s undeniably bad news, and a reminder of how painful the residential real estate slump has been for many homeowners.

Chicago real estate and the state haven’t been immune. RealtyTrac, a provider of foreclosure data, reported that Illinois saw 7,807 homes fall into foreclosure in January of this year, the most recent period that the company had data for.

As the number of foreclosures rises, some of my clients have been asking whether this is a good time to invest in one of these homes. My answer? Yes. If you’re fully aware of what investing in a foreclosed Chicago condo or single-family home truly entails.

Purchasing a foreclosed home isn’t an easy task. You have to jump through several hoops that you don’t encounter when making a more traditional Chicago real estate transaction. You also might find yourself with a home in a serious disrepair, so be prepared to make some renovations once you purchase that foreclosed home. Also be ready to spend some money on attorney fees. You have to be doubly careful when purchasing a foreclosed home that there are no legal entanglements involved. You don’t want to purchase a home only to find some legal discrepancy that can find you on the hook for unpaid taxes.

My best advice? If you are interested in investing in foreclosed properties, talk first with a savvy real estate professional. I’ve worked for many years with foreclosed properties. I know the possible pitfalls and the potential rewards. Both are great.
So invest cautiously. If you make the right moves, a foreclosed property can certainly become a wise investment.

Living in Downtown Chicago: A good real estate choice

You never know where you’re going to find the most interesting stories about residential real estate. For instance, the Atlantic, the monthly high-brow magazine filled with lengthy, in-depth feature stories, recently published a story about the future of far-flung suburbs.

And that future didn’t look good. That’s another reason why I’m glad to live here and sell Chicago real estate.

Let’s back up a bit: The story, writer Christopher Leinberger, highlighted the fate of a new-construction subdivision located outside Charlotte, NC. Unfortunately, 81 of the 132 homes in the subdivision had fallen into foreclosure. Vandals had defaced many of the now-vacant homes. Homeless people had begun to move in.

The suburb – filled with typical suburban new-construction homes – had become an unlikely slum.

The story pointed out that part of the blame for this falls on the subprime-lending crisis. Many homeowners in the subdivision simply could no longer afford their homes after their mortgage payments had risen. But the writer also says that suburbs located far from major cities are experiencing an even longer-term problem: The market for them is shrinking.

That’s because more people are deciding to live in cities such as Chicago. Look at what Mayor Daley has done for our downtown. He’s helped bring in new theaters, restaurants and shops. Downtown Chicago, which had been losing luster for years, is once again the hip place to be. This has a ripple effect: The Chicago neighborhoods sprouting off from downtown, the South Loop, West Loop, Uptown, Ravenswood, Lincoln Park, Logan Square, Old Town and so many others, are booming, too.

The Atlantic story predicts that in the not-so-distant future, we’ll see a large surplus of suburban homes just waiting for buyers. And the people who live in these houses, located a long commute from any major city, will be the buyers who can’t afford anything else.
I’ve always been a fan of urban living. And no city does urban living as well as Chicago. If you’re looking to buy a Chicago real estate, check out the offerings in downtown and its nearby neighborhoods. You’ll be surprised at what you find. And your property will almost certainly increase in value.