September 16, 2009
In August, our Chicago-area agents presented 30% more offers on homes for sale than they did in July. With more bids, there’s increased competition and homes go under contract quicker. Mark Reitman, one of the top buyers’ agents in the Chicago area, is seeing well-priced homes sell quickly on the North Shore:
Right now, homes that are priced right aren’t staying on the market very long. A lot of sellers need to sell and have priced their homes accordingly. We’re seeing homes on the North Shore go under contract in less than a week. One of my clients was ready to bid on three different homes in the $600,000 range, but all went under contract before we could submit our offer.
Price Gap Has Narrowed
This increase in buyer activity has a lot to do with low mortgage interest rates and the $8,000 federal tax credit. Mark points out another reason: there’s less of a gap between what sellers think their homes are worth and what buyers are willing to pay:
- Sellers: Have much better understanding of market values and they’re pricing homes better
- Buyers: Are learning the market is no longer dropping like a rock and they aren’t going to get a nice house with a low ball offer
3 Tips For Buyers
Mark has three tips for buyers:
- Determine your maximum price: Know how high you can go before you bid so you don’t have to figure this out during negotiations
- Know what’s for sale: Be ready to make an offer as soon as you see something you like
- Lead with your best offer: Show sellers that you’re a serious buyer from the start
For more numbers, download the spreadsheet with the data on what happened in August.
Where are you seeing homes with multiple offers?
September 15, 2009
Our Chicago-area agents had another fantastic month in August!
Of the 4,400+ buyers’ agents who closed a deal in August, Greg ranks 5th and Mark ranks 12th:
*We’re in the process of building Cindy’s profile page.
When you work with Redfin, you’ll be working with some of the best agents in the region. Our agents know what’s going on in the market right now because they spend all of their time serving clients: touring homes, writing offers and closing deals.
We pulled these numbers from MRED, the database for real estate transactions and listings in Illinois, and ranked agents who represented home-buyers of single-family homes and condominiums in August based first on number of deals, then by total dollar amount.
Our Clients Love Our Service
We survey every client and track every transaction in a central customer database. For the surveys we received in August from our clients in the Chicago area:
- 16 clients responded to our customer-satisfaction survey and posted a review online, down from 20 in July.
- 15 of those clients, or 94%, would recommend Redfin to a friend, down from 95% in July.
We ask customers to rate the likelihood that they would recommend Redfin to a friend on a 0-to-10 scale. Customers who rated 6 or higher count as people who would recommend Redfin to a friend.
September 8, 2009
The federal government is offering first-time home-buyers a tax credit of 10% of a home’s sales price up to $8,000. To qualify, you must close on a home by November 30th; if you close on December 1st, you’re out of luck.
If you’re a first-time buyer in the Chicago area, you have a little over three weeks left to find a home, make an offer and negotiate terms if you hope to close in time to get the $8,000 tax credit.
Close By November 13th
In a normal month, about 20% of closings slip from the last week of a month to the next. This number will almost certainly be higher in November due to the expected rush of buyers trying to get the tax credit and because November 30th falls on the Monday after Thanksgiving.
If you’re hoping to get the tax credit, you want to make sure you’ve closed before the week of Thanksgiving because it’s not a full work week:
- Thursday, November 26th: Turkey day. A day to give thanks and watch the Detroit Lions go for six Thanksgiving Day losses in a row.
- Friday , November 27th: Cook & DuPage county offices are closed.
- Saturday & Sunday, November 28th & 29th: The banks aren’t open so you can’t close.
- Monday, November 30th: The last day to close and qualify for the first-time buyer tax credit. It’s going to be a goat rodeo.
To give yourself the best chance of getting the tax credit, plan on closing by November 13th. If you run into any problems during closing, you’ll have more than a week to work things out and still qualify for the tax credit.
Get An Offer Accepted By October 3rd
Right now, it’s taking our Chicago-area clients an average of 41 days to close once they reach initial agreement on terms. This means if you want to close by November 13th, you need to get an offer accepted by October 3rd. That’s 25 days away.
For more information, check out the Home Buyer Tax Credit FAQ from the IRS and get all the details about the tax credit from the agency giving the credit. Also, check out the report that this program may be extended.
Find A Home You Like
Don’t rush into a purchase. Make sure you’re buying because you’ve found a home you want to live in, not because you want the $8,000. You don’t want to end up in the wrong house in the wrong neighborhood with the wrong commute just for a few thousand dollars.
September 2, 2009
I apologize for the tardiness of this post. Unfortunately I did not receive the data until almost the end of the month.
Let’s check in on our stats once again and find out where buyers are currently getting the biggest discounts off asking price. If you are a potential buyer, this will help you to know which neighborhoods may be softer in terms of sale price discounts off list price, and help you know where to look for potential bargains.
In the charts below, we have taken all sales data from last month in the greater Chicago area and sorted it by city. We calculated the overall difference between the sale price and the list price. Note that this reflects the final list price, after all price drops in the listing. Any areas with fewer than ten sales are excluded from the top and bottom ten rankings, but interested readers may download the full data summary in Excel format (xls).
Here are the top ten areas with the largest overall discount:
The overall discount rate dropped slightly from June to July, moving from 6.4% to 6.2%.
Here are the ten areas with the smallest discounts:
In the 118 areas we ranked, the median discount was 6.15%.
Is the area you’re shopping not on either the top 10 or bottom 10? No problem, just download the full rankings in Excel format and hit the “FullSummary” sheet.
Of the 6,180 sales we tracked in the 1-month period, 3,082 (nearly half!) homes sold for 5% or more off the asking price, while 412 homes sold for 5% or more above the asking price.
August 25, 2009
It’s time for our monthly check-in of the S&P/Case-Shiller Home Price Indices (HPI). For the full source data behind this post, plus seasonally adjusted and tiered price data, hit the S&P/Case-Shiller website. For an explanation of how the Case-Shiller data is calculated, check out their methodology pdf. Also remember that the data released on the last Tuesday of a given month is for the period two months prior (i.e. – June data is released in August).
Here are the basic Case-Shiller stats for the Chicago area* as of June:
June 2009
Month to Month: Up 1.1% (raw)
Month to Month Up 0.7% (seasonally adjusted)
Year to Year: Down 16.7%
Change from Peak: Down 25.9% in 33 months
Sixteen of the twenty metro areas tracked by Case-Shiller saw an increase in their respective seasonally-adjusted HPIs between May and June. Only Las Vegas, Detroit, Seattle, and Charlotte still saw seasonally-adjusted drops month-to-month.
After falling at a very consistent pace from October to March, Chicago’s HPI was flat for a month and is now increasing at a consistent pace, though definitely not as fast as it was falling before.
Here’s a chart of Case-Shiller HPIs for all the markets that Redfin serves:
Here’s our peak decline chart, in which we line up the peak Case-Shiller HPI value for each of Redfin’s markets, so we can see how long each market has been declining, and how much it has dropped from the peak.
It’s quite noticeable in both of the above charts that almost every city we’re tracking seems to have taken a sudden upward turn with the most recent few months of data. Despite the fact that there was a nearly two year spread in when the various markets hit their peak (Boston in September 2005, Seattle in July 2007), nearly every market appears to have turned a sharp corner to the positive after “bottoming” in March or April.
A commenter on my Seattle site made an astute observation about this phenomenon this morning:
Since it is still essentially true that “real estate is local”, what could cause every city to suddenly and simultaneously reach an equilibrium point where prices reversed course?
Answer: it just so happens that the home buyers’ tax credit was enacted with the American Reinvestment act (stimulus package) effective February 17, 2009. March 2009 was the first full month that American home buyers had the tax credit as an incentive. It changed their behavior and made them buy homes. It also expires on December 1, 2009 unless it is extended.
Once again, government policy is impacting asset valuations. Either we’re seeing a lasting nationwide housing bottom marked by an extraordinarily well-timed tax incentive, or a new “bubblet.” Case Shiller won’t tell us which until 2010.
It remains to be seen whether the NAR’s lobbying efforts to get the $8,000 tax credit extended beyond November will be successful. And even if they do convince Congress to extend it, the effect may be largely diminished. The program may have already pulled forward as many sales as it can during its spring and summer run.
*[Case-Shiller defines Chicago as the entire Chicago-Naperville-Joliet, IL Metropolitan Division, which includes all of the following counties: Cook IL, DeKalb IL, Du Page IL, Grundy IL, Kane IL, Kendal IL, McHenry IL, and Will IL.]
August 25, 2009
Greg Whelan, who’s in the top 1.25% of buyers’ agents, is seeing a lot of buyer activity in communities close to the lake.
Right now, a lot of buyers are focusing on condos in Lakeview, Lincoln Park and South Loop. What’s interesting is that buyer’s aren’t clustering in certain price ranges: I’ve worked on deals ranging from $190,000 – $750,000.
Less Room To Negotiate
Greg has also seen is that sellers are much more in tune with the market than they were a few months ago:
Earlier in the year, sellers didn’t or wouldn’t recognize the conditions of the market, but no more. Sellers now have a better understanding of the market, and as a result, more homes are priced closer to market value. Most homes are selling within 94% to 97% of list price, except in the South Loop where many new construction condos sell parking separately, driving sales prices to 103% of list. Six months ago, buyers could pull recent apples-to-apples comparable past sales and expect to pay less, now buyers should expect to pay at or even above the most recent comp prices.
What are you seeing the communities near the lake?
August 21, 2009
Let’s take at look at some July numbers for single-family houses and condos in the Chicago area and see how they compare to last year.
Cook County
- 57,120 properties were for sale, down from 68,197 in July 2008
- 10,546 new listings came on the market, down from 12,451 in July 2008
- 4,232 properties sold, up from 4,159 in July 2008
- The median sales price was $205,000, down from $268,000 in July 2008
DuPage County
- 11,749 properties were for sale, down from 13,331 in July 2008
- 2,058 new listings came on the market, down from 2,335 in July 2008
- 891 properties sold, down from 899 in July 2008
- The median sales price was $245,000, down from $280,000 in July 2008
Lake County
- 10,218 properties were for sale, down from 11,374 in July 2008
- 1,649 new listings came on the market, down from 1,876 in July 2008
- 688 properties sold, up from 645 in July 2008
- The median sales price was $205,250, down from $265,000 in July 2008
We pulled these numbers from MRED.
Dig Deeper Into the Trends
These numbers are for county-level trends. To see what’s happening in your neighborhood, check out our stats & trends pages.
This is our first monthly report on the inventory trends in the Chicago area. What numbers would you like to see in our August wrap-up?
August 20, 2009
July was another great month for our Chicago-area agents. Greg Whelan and Mark Reitman are in the top 1.25% of agents who represented home-buyers in Cook, DuPage and Lake Counties in July. Greg worked on five deals that closed totaling $1,746,000 and Mark closed four deals worth $1,323,000.
When you work with Redfin, you’ll be working with some of the best agents in the Chicago area. Our Chicago agents know what’s going on in the market right now because they spend all of their time serving clients: touring homes, writing offers and closing deals.
We pulled these numbers from MRED, the database for real estate transactions and listings in Illinois, and ranked agents who represented home-buyers of single-family homes and condominiums in July based first on number of deals, then by total dollar amount.
Greg and Mark were even busier than those numbers suggest. Many new constructions are not listed in the MRED and sometimes deals get closed out in MRED without naming the buyers’ agent. Based on our own records, Greg closed eight deals in July worth a total of $2,964,000 and Mark closed seven deals worth a total of $3,299,900.
It’s Been A Busy Summer
June and July were busy months in the Chicago area; our clients toured 1,275 homes and our agents presented 50 offers on homes for sale. Our Chicago team really hit it out of the park and thrilled our clients with fantastic service. To keep up with the demand we promoted Patrick Lusk.
Patrick stepped up and was an all-star in July. He did whatever needed to be done to make sure our clients were happy: he led tours, hosted inspections and negotiated terms and closed his first deal as a Redfin agent. Way to go Patrick!
Our Clients Love Our Service
We survey every client and track every transaction in a central customer database. For the surveys we received in July from our clients in the Chicago area:
- 20 clients responded to our customer-satisfaction survey and posted a review online, up from 11 in June.
- 19 of those clients, or 95%, would recommend Redfin to a friend, up from 91% in June.
In these surveys, Redfin asks customers to rate the likelihood that they would recommend Redfin to a friend on a 0-to-10 scale. Customers who rated 6 or higher count as people who would recommend Redfin to a friend.
We’re also thrilled that two of our clients gave us five-star reviews on Yelp in July. Check out what annette f. and Jeremy L. said about working with Redfin. You can also read more about Annette’s experiences as first-time home-buyer and her tips for shopping for a mortgage.
For more numbers, download the spreadsheet with the data on what happened in July.
July 29, 2009
Annette and her husband Ben just closed on a condo in Chicago’s Fulton-River district with Redfin. We were delighted to see that they left us a five star review on Yelp, and wanted to learn a little more about their experience buying a home for the first time.
Annette and Ben in their new home
Annette and Ben’s Story
After seeing Redfin featured on 60 minutes a couple of years ago, we were excited to see the expansion into Chicago last year. We spent hours searching for homes on Redfin, racked up a huge favorites list and got updates from listing alerts. We first attended around five open houses on our own before touring about 10 condos with Redfin field agent Dario Medina. We loved his neutral, no BS approach and always had enough time to look at each home. Once we were ready to make an offer, Redfin lead agent Mark Reitman stepped in and helped us every step of the way.
Research FHA Financing and Condos
When it was time to get a loan, we decided to go the FHA route. This limited our options a bit in terms of which condos we were eligible to buy in the Chicago area; but with the current economic situation, that seems to be changing and more condo buildings are trying to get FHA-approved. Many Homeowner’s Associations that govern condo buildings aren’t approved to accept buyers with FHA financing. Luckily, our favorite condo was FHA-approved.
Redfin agent Mark Reitman explains that “some homeowners associations have a “right of first refusal” in their bylaws that grants them the right to deny a prospective buyer and purchase the unit themselves. This law violates the Fair Housing Act established by the Department of Housing and Urban Development, the government agency overseeing the Federal Housing Administration that insures FHA loans.”
Shop Around For Loans
We used Bankrate to monitor rate changes and got pre-approved early in our search. In hindsight, we probably should’ve shopped around a bit more for lower rates. We just went with the lender that pre-approved us. But if rates continue to drop, our lender has given us the option to re-finance no sooner than 30 days after closing at minimal cost to us. This may be something to ask your lender about if rates drop after you close and if you are also using an FHA loan.
Annette, Ben and the Chicago skyline
We got to move in the day we closed and the Redfin refund was icing on the cake. We love our first home and are enjoying our fantastic new view of the Chicago skyline and the Chicago river. We’re grateful for Redfin’s help, and plan on using them again in the future.
July 28, 2009
It’s time for our monthly check-in of the S&P/Case-Shiller Home Price Indices (HPI). For the full source data behind this post, plus seasonally adjusted and tiered price data, hit the S&P/Case-Shiller website. For an explanation of how the Case-Shiller data is calculated, check out their methodology pdf. Also remember that the data released on the last Tuesday of a given month is for the period two months prior (i.e. – May data is released in July).
Before we dig into the data, I’d like to make a brief mention of an excellent post over at the economics website Calculated Risk: A Few Comments on Housing Reports. Quoting from his post:
…the Case-Shiller report today really bothered me. To be more accurate, the reporting on the Case-Shiller report bothers me. As I mentioned earlier today, there is a strong seasonal component to house prices, and although the seasonally adjusted Case-Shiller index was down (Case-Shiller was reported as up by the media) – I don’t think the seasonal factor accurately captures the recent swings in the NSA data.
Keep in mind that the Case-Shiller data that most of the media (including this blog) are reporting on is usually the raw index data. As CR mentioned, the housing market is a very seasonal beast, so it’s difficult to draw any meaningful conclusions from month-to-month changes, unless they are far outside the norm for that time of year. This is why we consistently report the year-to-year change in our summary.
Now that we’ve got that out of the way, here are the basic Case-Shiller stats for the Chicago area* as of May:
May 2009
Month to Month: Up 1.1% (raw)
Month to Month Up 0.5% (seasonally adjusted)
Year to Year: Down 17.5%
Change from Peak: Down 26.6% in 32 months
The following chart shows the Chicago area HPI scaled such that the September 2006 peak is 100% on the y-axis. Data on the x-axis is scaled to display the last time (pre-peak) the Chicago area HPI was at or lower than it was in the latest data (August 2002).
(All of the charts below are based on the non-seasonally-adjusted Case-Shiller HPI data.)
The uptick this year is definitely a variation from last year when prices just flattened through the spring and summer.
Here’s a chart of Case-Shiller HPIs for all the markets that Redfin serves, so you can compare Chicago’s performance to other areas across the country:
And here’s our final chart, in which we line up the peak Case-Shiller HPI value for each of Redfin’s markets, so we can see how long each market has been declining, and how much it has dropped from the peak.
It’s also worth keeping in mind that in addition to being from a usually-strong time of year, these numbers represent home sales that closed during the frenzy of interest rates in the fours and the debut of the $8,000 first-time homebuyer tax credit. In my opinion, we won’t really know if home price declines are mostly over until we see the data from October / November. And that advice is worth exactly what you paid for it ;^)
*[Case-Shiller defines Chicago as the entire Chicago-Naperville-Joliet, IL Metropolitan Division, which includes all of the following counties: Cook IL, DeKalb IL, Du Page IL, Grundy IL, Kane IL, Kendal IL, McHenry IL, and Will IL.]
