Market Conditions: December 2015 Sales Basically Flat Year Over Year as Inventory Remains Low

State Street at Christmas 2011

The Illinois Association of Realtors is out with December 2015 sales data.

The city of Chicago saw a 0.4 percent year-over-year home sales increase in December 2015 with 2,029 sales, up from 2,020 in December 2014. The year-end 2015 home sales totaled 27,439, up 7.8 percent from 25,461 home sales in 2014.

The median price of a home in the city of Chicago in December 2015 was $242,500, up 6.4 percent compared to December 2014 when it was $228,000. The year-end 2015 median price reached $262,000, up 6.9 percent from $245,000 in 2014.

I’m surprised it wasn’t up more because December 2014 was a little soft. Additionally, the weather was so much better this year.

We have sales data going back 11 years.

  • December 2004: 3,719 sales and median price of $267,000
  • December 2005: 2,847 sales and median price of $283,000
  • December 2006: 2,241 sales and median price of $279,000
  • December 2007: 1,629 sales and median price of $287,000
  • December 2008: 1,263 sales and median price of $235,000
  • December 2009: 1,820 sales and median price of $208,000 (34% short/REO sales)
  • December 2010: 1,475 sales and median price of $166,000 (43% short/REO sales)
  • December 2011: 1,536 sales and median price of $156,000 (44% short/REO sales)
  • December 2012: 1806 sales and median price of $185,000 (39.7% short/REO sales- according to Gary Lucido’s data)
  • December 2013: 2137 sales and median price of $210,000
  • December 2014: 2020 sales and median price of $228,000
  • December 2015: 2029 sales and median price of $242,000

“The Chicago market continues to post strong price gains, reflecting consumer interest in being in a vibrant city and a continuing shortage of available homes from which to choose,” said Dan Wagner, president of the Chicago Association of REALTORS® and senior vice president for government relations for The Inland Real Estate Group. “All indicators are that the momentum we saw in 2015 will bridge over into the new year.”

“The housing market in December behaved in a similar way to its historical pattern,” said Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory at the University of Illinois. “Activity in both prices and sales was modest but increases were recorded for month-over-month and compared to the same month last year.  Consumer sentiment remains positive towards housing purchases with inventory levels perhaps posing problems in some submarkets.”

According to Crain’s, Chicago inventory started January at its lowest level in 9 years, or basically since they started keeping track of inventory.

As of the middle of January, inventory levels remained at 9 year lows.

We’re not yet in the spring selling/buying season. That doesn’t start until February. There’s plenty of time for sellers to begin listing.

Mortgage rates have fallen to 3 month lows and the job market remains strong.

Will the Chicago market be able to post year over year gains in 2016 after 2015’s very strong showing? Or will low inventory hamper sales?

Illinois home prices, prices higher in December; Strong gains seen in 2015 [Illinois Association of Realtors, Press Release, January 22, 2016]

80 Responses to “Market Conditions: December 2015 Sales Basically Flat Year Over Year as Inventory Remains Low”

  1. For the week ending January 9, which is the latest data available to me without having to pull my own, listings of SFHs were up 24.4% over last year. But that’s a single data point.

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  2. Oh…but condo listings were basically flat to last year.

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  3. On the topic of inventory, quick question for the Chatterati:

    We’re going to list our house. We only need to stay in it through May. It will show much better in mid-May/early June, when leaves are back in the trees, flowers are blooming, etc. (it’s sort of near a busy street and gas station, facts that are more apparent during the winter). So my assumption has been that we should wait. That said, there’s very little inventory – nothing really to compete with our place has been on the market for months (there wasn’t much in Jan of 2014 and 2015 either, but there’s less now). So do we get out ahead of the spring sellers and list in the next few weeks?

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  4. Look at my contract activity graph here: http://www.chicagonow.com/getting-real/2016/01/chicago-real-estate-market-update-december-treaded-water/

    Contract activity peaks in March – May. Last year June had a decent showing. If you want a contract in March it would be good to be on the market in February – especially given how low inventory is. But then you have to weigh that against the foliage considerations.

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  5. list it march 1st IMO

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  6. List it now. The buyer of your crib will probably possess the wherewithal to imagine its appearance in “mid-May/early June, when leaves are back in the trees, flowers are blooming, etc.”

    If the facts are friendly, why get in the way of your own trade?

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  7. Here’s the price chart for upper-tier Chicago real estate adjusted for seasonality:

    https://research.stlouisfed.org/fred2/series/CHXRHTSA

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  8. Here’s the same data NOT adjusted for seasonality, so it’s got a little more variance:

    https://research.stlouisfed.org/fred2/series/CHXRHTNSA

    Since the small difference between them can be measured, you should factor it into your list price and get going.

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  9. “upper-tier Chicago real estate”

    Meaning: single family homes that sold for over $302k.

    So, not so instructive on CC-type properties.

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  10. @anonny, the closer you can wait until May to list the better. You don’t know what might happen in-between now and then. It takes the better part of 2 months to close after you go under contract so assume worse case scenario even though you will price it right.

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  11. anonny, I would list it in early june – after you have moved out. Have it staged. Yes, it will cost you extra for the mortgage/tax and staging, but I bet you will get that money back (and more) in a higher price and faster sale.

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  12. Sometimes I do wonder, is this all a repeat of 2008? Commodity prices deflated, then the stock market deflated and then housing deflated. 2008-2011 was a serious recession. So serious that academics termed it The Great Recession. Revenues at a lot of stores like Subway, 7-11, liquor stores, small grocery stores, gas station inside sales were down by 35% to 60%.

    Please don’t ask me if I own a Dunkin Donuts or a 7-11. I don’t. I just state the above because I have a lot of family members who are in those businesses.

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  13. No worries Nimesh

    Should The Donald get elected everything will be GREAT again.
    Should Hillary get elected “what does it matter” if we have a recession?
    Carson will just lull us all into a four year nap and we won’t even notice.
    Cruz will be tied up in court and too busy to shut everything down.
    And if Sanders is voted into office, ok, well, hmmmm, …..I just don’t know.

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  14. “So do we get out ahead of the spring sellers and list in the next few weeks?”

    Any “new” listing (one that wasn’t on the market at some point last year) that is being listed right now is going under contract almost immediately if it has decent pictures and is decently priced. Literally- immediately.

    If you’re fine with moving out by March, then you should list now. Because it’s unlikely you’ll find a buyer that wants to put off closing until April or May.

    Otherwise, you should wait until March or April to list.

    Yes, there will be more competition come the spring, but unless mortgage rates really spike higher, demand should still be strong. Buyers are already looking.

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  15. Speaking of staging, this is a good article in the NYT on the power of a little bit of paint, removing clutter and making it look magazine ready.

    Maybe I’ll do a couple of posts next week on properties that need staging badly. Just because it’s a hot market, doesn’t mean that buyers will ignore the crappy furniture and horrible photos. They won’t. Even in NYC.

    This apartment was on the market for 6 months, with price reductions, before they called in the stagers.

    http://www.nytimes.com/2016/01/24/realestate/home-staging-new-york.html?action=click&pgtype=Homepage&version=Moth-Visible&moduleDetail=inside-nyt-region-4&module=inside-nyt-region&region=inside-nyt-region&WT.nav=inside-nyt-region

    The couple took the place off the market that December, and at Ms. Kahn’s behest, sent for the home stager Nahila Chianale, the owner of NCC Luxe in New York.

    To Ms. Chianale, the home’s décor was too eclectic, “like Victoriana meets ’80s meets Ikea,” she said.

    She instructed the couple to empty the apartment, except for one small bench that she deemed attractive. Then, for about $26,000, she had the kitchen cabinets, shelving, doors and door frames painted white, and moved in an entire home’s worth of contemporary furniture, including shapely clear acrylic dining chairs and a white pedestal table, an Italian linen sofa and a chrome-and-glass coffee table placed atop a cowhide rug.

    When Ms. Kahn relisted the staged property last April for $1.495 million, “the place was mobbed,” at the first open house, Ms. Sarro said.

    A bidding war ensued, and the apartment soon went into contract for $1.8 million, before closing in July.

    “I can’t believe how it worked out,” Ms. Sarro said. “I still shake my head.”

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  16. I’ve always had a rule that we aren’t to discuss the interior décor of the properties listed on Crib Chatter because the paint can be changed and the furniture won’t be there when you move in.

    BUT- if you still have a futon in the living room and no bed frame for the bed in the master bedroom and you’re selling a $500,000 property, it DOES become an issue in the selling process.

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  17. Here’s more from that NYT article on the costs of staging (at least in Manhattan.)

    Here in Chicago, as I look at hundreds of real estate listings a week, the advice I would give sellers is really just paint the place. And curtains are everything. Curtains can make a home look luxurious for very little money.

    “Since Mr. Pinkerton started staging New York homes 13 years ago, “staging has almost doubled in cost,” he said. “A small staging for me used to be $4,000 or $5,000. Now, the smallest ones will run about $10,000.”

    Staging a two- or three-bedroom apartment can cost about $20,000 to $30,000, not including the cost of moving and storing existing furniture. Staging a much larger apartment, or a townhouse, can cost $100,000 or more.

    For sellers who aren’t ready to make such an investment, but are willing to do work themselves, some stagers also offer consultations and provide written recommendations for a much smaller fee.”

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  18. I’m seeing comments out of sequence again. Is it just me?

    We can usually get an average size condo – living room, dining area, one bedroom staged for 3 months for $2000 – 3000. And by staged I mean they bring furniture into an empty property.

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  19. They’re not out of sequence because it allows me to “reply” to a specific comment. So when I replied to anonny’s comment late, it put it in the middle of the comments thread instead of at the end of the thread.

    This comment should be at the end of the thread because I’m not replying to anyone specifically. I think only I can do that – as the administrator.

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  20. “And by staged I mean they bring furniture into an empty property.”

    That’s just furniture though, right? You’re not painting and doing all of that stuff.

    A lot of it is paint these days.

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  21. Also, in some of the examples in the article, they are ripping out the old carpets and putting in new hardwood floors, staining floors and having to store all of the old furniture somewhere. All of that adds onto the cost.

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  22. “That’s just furniture though, right? You’re not painting and doing all of that stuff.”

    Correct. I only recommend painting if the colors are terrible and/ or the condition of the paint is bad.

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  23. Call it what you want but…..

    Staging = bringing in props
    Remodeling = everything else

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  24. Regarding that NYT staging story…I’d be hesitant to attribute all of that difference in demand and pricing to the staging. How much did prices go up in the course of almost one year in that market?

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  25. I think putting your place on the market soon won’t hurt. All my current buyers are looking to buy and close before June 1st. This is very common – most buyers have their leases ending in the end of May-June, they prefer to have overlapping time, to get some work done in the new home before they move in (usually new paint and floors). Most leases end in the end of Spring – early Summer, these tenants, planning to buy, start looking at least 6 months ahead of time, to know the inventory and not to miss the right property. They are flexible on closing dates, this works great for flexible sellers.
    I would suggest to use this current time wisely – to invite your broker to assess the unit, identify all”red flag” areas, that could spook buyers and need to be taken care of: settlement cracks, caulking, regrouting, touch ups; get it fixed. After that, bring a great interior designer/stager, the one that could work with your existing furnishings and add small staging stuff where necessary. I always bring my interior designer/stager on my listings, unless there are renters there who would not want their stuff to be touched. It really transforms the place and helps to sell fast and for more money. Costs me 4 hoursx$95/hour. When it is all done,get good cleaners, to make it shine – windows, floors, appliances, kitchen and bathrooms – makes huge difference. It takes 2-3 weeks at least to put home in a great showing condition. By the time you are done, spring market will be in full blossom:).

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  26. My 2 cents as a Realtor in Chicago: Buyers are ALL OVER THE PLACE when it comes to when they want to move. I put a place under contract today for a guy whose lease runs through September. He’s planning to move in Feb because the place is vacant (and staged!) but he could have waited.I’m currently (taking a break from) working on an offer for a gal whose lease runs til July 1. Same situation. The key is, these 2 buyers, who are NOT DESPERATE to move, somehow found their special place the first time we went out. That doesn’t happen very often. The market is crazy hot with buyers right now. When calling to schedule showings I keep getting the response “we’ve had so many requests we’re doing an open house from x-y, if you can’t make it send your buyers. That urgency is catching like wildfire. If I had a place to sell I’d make it look as much like a magazine photo as possible and get it on the market NOW while there’s almost no competition. You can put pix of your summer look in the listing photos, and on the wall by the windows they’d look out to take in the lovely views, or in a flyer you hand out. EVERYONE will have green and buds and flowers then – show them what a gorgeous future they can buy even though it’s gray and dirty and cold out there right now.

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  27. Re: Staging

    “Staging a two- or three-bedroom apartment can cost about $20,000 to $30,000, not including the cost of moving and storing existing furniture. Staging a much larger apartment, or a townhouse, can cost $100,000 or more.”

    So, when you sell you end up owning 2 units’ worth of furniture?? Is the furniture purchased?? What happens to it?

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  28. “So, when you sell you end up owning 2 units’ worth of furniture?? Is the furniture purchased?? What happens to it?”

    No. It is borrowed. A lot of the cost in the NYT article comes from tearing out bad carpets and putting in new hardwood floors and painting kitchen cabinets/walls.

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  29. “They’re not out of sequence because it allows me to “reply” to a specific comment. ”

    It’s your sandbox, so whatever BUT:

    you do realize that anyone who has read the comments before you ‘reply’ is most likely missing you additions, right?

    Like I say, whatever works for you, but they will largely get lost in the shuffle, if not at the end.

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  30. “They’re not out of sequence because it allows me to “reply” to a specific comment. So when I replied to anonny’s comment late, it put it in the middle of the comments thread instead of at the end of the thread.”

    This is a bad idea.

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  31. sonnies: “list it march 1st IMO”

    We’ve decided to list on Feb 18. As much as I’d love to wait until spring, there just seems to be a more compelling argument for listing when there’s less (almost zero) competition. Fingers crossed that we don’t have to keep it showing-ready beyond that first weekend.

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  32. best of luck!

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  33. ^^^ Good. I obviously agree with your decision to list now. But hoping you won’t have to keep it showroom-ready beyond the first weekend is probably asking too much.

    Price matters, so don’t ask for the moon. Research the comps. Be able to make the case for the price you’re asking, hope for the best, then move on—to the million other things you’ve got to attend to.

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  34. fyi, the Wall Street Journal wrote up a company called OpenDoor that wants to be the Carmax of house traders:

    “OpenDoor appeals to people who need to move quickly. After a seller fills out an online form, it performs a quick market analysis and makes an offer. If accepted, the company sends an inspector to verify the home’s condition. The company may request repairs at the expense of the seller, who can still back out of the deal. The seller selects the closing date and receives cash for the house. OpenDoor says it charges 7% to 12% in fees.

    “OpenDoor had bought and sold just over 200 homes. It paid an average $230,000, reselling them within 90 days for an average of $245,000.

    “OpenDoor made an average estimated profit of between $10,000 and $15,000 on these homes, when including the roughly 9% in fees it earns from the seller, and subtracting costs to resell the home such as renovation costs and broker commissions…

    “OpenDoor recently began operating in Dallas and is also targeting Las Vegas, Denver and Portland, Ore., while staying away from pricey cities like San Francisco.

    “[One man] sold his house in August for $290,161, according to property records. OpenDoor pocketed an 8.5% fee, paying him roughly $265,000, he said. [The seller] estimates he would have paid 6% of the sales price to brokers anyway had he sold the house himself.

    “OpenDoor flipped the house a month later for $300,000, but likely collected closer to $285,000 after factoring in various selling costs, according to property records and the company.

    “[The seller] said he could have made more money selling his house himself. But the convenience of setting the closing date while not dealing with open houses or buyer mortgage approvals made the cost worth it.

    http://www.wsj.com/articles/startup-pays-cash-to-buy-homes-flip-them-1453423774

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  35. The OpenDoor thing sounds interesting. I toyed with the idea of doing a FSBO, or even using Redfin, but instead went the traditional route (in particular, we opted for the Jennifer Ames-like route, i.e., really nice listings, one of the more prominent offices and brokers in our area, our place is on the low end of her typical listings, etc.).

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  36. “We’ve decided to list on Feb 18. As much as I’d love to wait until spring, there just seems to be a more compelling argument for listing when there’s less (almost zero) competition.”

    How do you know what the competition will be like feb 18?

    What did j ames lite (did s/he even go to a good ivy) tell you to do?

    How does your list price compare to what you expect to get?

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  37. Can’t know what things will be like two weeks from now. We would have listed this Thurs (just met with the broker over this past weekend) to get things going this weekend, but we’ve got family staying with us for 5 nights next weekend. So we’ll use the next couple of weeks to make some minor repairs, get the pictures done, etc. We expect to get pretty close to list price. We bought it about 22 months ago, and plan to list for about 25% more than what we paid (though we borrowed roughly half of that increase and put it into the place, so after accounting for paying off that debt, it’s more like a 12% increase over what we paid.

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  38. Good luck, look forward to the listing!

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  39. This OpenDoor thing sounds terrible. If they are doing some rehab then I guess they are adding some value in between but there is a reason they are not just buying homes that are listed. They are obviously buying these homes below market value. How is that a good deal for the seller? Yeah, I know…they can sell quickly. But I have to believe they can sell almost as quickly for a higher price and for much lower fees.

    I’ve dealt with these cash buyers before and I will tell you that they are real interested about 10% below market value.

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  40. https://www.washingtonpost.com/news/wonk/wp/2016/01/29/the-unique-power-of-poverty-to-turn-young-boys-into-jobless-men/?sdfsdf

    It’s more important for a little boy groove than a little girl groove to live in Hinsdale than the near west side next to autozone.

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  41. “We bought it about 22 months ago, and plan to list for about 25% more than what we paid (though we borrowed roughly half of that increase and put it into the place, so after accounting for paying off that debt, it’s more like a 12% increase over what we paid.”

    And this is in the Chicago suburbs? Wow. We’re not even talking about Silicon Valley here. This is what I’ve been saying. This is the hottest market EVER. The gains are much bigger than what we saw in some of the bubble years. It’s crazy what is going on out there. As I said before, the $400,000 2/2 from 2005 is quaint now compared to the prices that are being asked for: $450,000 to $600,000 for that 2/2 now.

    Congrats annony. I hope it all works out as planned.

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  42. “the $400,000 2/2 from 2005 is quaint now compared to the prices that are being asked for: $450,000 to $600,000 for that 2/2 now.”

    A new 2/2 will go for those higher prices but not the 2/2s from 2005. Plenty of those people are still at a loss and in the Green Zone. I looked through some closings the last time we discussed this.

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  43. “A new 2/2 will go for those higher prices but not the 2/2s from 2005. Plenty of those people are still at a loss and in the Green Zone. I looked through some closings the last time we discussed this.”

    My god. Wake up! Look at nearly anything in Lakeview, Lincoln Park, Streeterville, River North. The 1-bedrooms are now selling at $400,000. And some of them are 20 years old!

    Even sellers in Admiral’s Pointe, the least luxury building in all of River North, are trying to sell for over $450,000 now.

    Here you go: https://www.redfin.com/IL/Chicago/645-N-Kingsbury-St-60654/unit-002102/home/22767595

    And here’s it’s sales history:

    Sold in 2003 for $346,000 (included the parking)
    Sold in 2012 for $335,000 (included the parking)
    Currently listed for $458,000 (including the parking)

    There are very few properties even listed in all of River North right now (at all price points). Most are going under contract within days.

    Ba ha ha ha!

    This is happening ALL OVER THE GREENZONE now. If you aren’t making money off your purchase in the last 15 years then you clearly chose very, very poorly in your location/building.

    If you want a 2/2 you’d better be prepared to pay $450,000- $550,000. If you want new- then you’d better step up your game. Those are going for $550,000 to $800,000.

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  44. This is going to be an exercise in frustration as you will dismiss every shred of evidence I present using the “special circumstance” disqualifier – e.g. it’s west of _____, it was built ________, that’s one of those________, it’s right next to_________, it’s too far from ________, it’s probably__________

    Nevertheless, here are the examples of what I am talking about:
    http://lucidrealty.com/homes-for-sale/Chicago_Lake_View/condos_townhomes/3010-N-SHEFFIELD-AVE-unit-2S/ yeah, it’s a short sale. Originally bought for $522K and just sold for $400K. Yeah, short sales still happen in Lake View.

    I’m going to post these examples separately so that I don’t trigger a spam filter.

    And I’m not saying that everything went down in Lake View, just that it’s not boom times for plenty of sellers.

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  45. http://lucidrealty.com/homes-for-sale/Chicago_Lake_View/condos_townhomes/3725-N-Sheffield-AVE-unit-B2N/

    Bought for $522K in April 2007 and just sold for $400K.

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  46. http://lucidrealty.com/homes-for-sale/Chicago_Lake_View/condos_townhomes/3306-N-Clifton-AVE-unit-2N/

    Bought for $425K in August 2006 and just sold for $400K

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  47. Classic permabear meltdown by Sabrina.

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  48. These are not hard to find. I’m just going through the sales around 400K, sequentially, until I find ones that are losers. I don’t have to go through very many and it’s hardly scientific but maybe half are winners, 1/4 are losers, and 1/4 are kinda flat. And the sad thing is that these sellers that are losing are hearing how the market is so hot and they can’t figure out why they are losing in a hot market. It’s probably the fact that new or updated carries a nice premium.

    Here is a flat one: http://lucidrealty.com/homes-for-sale/Chicago_Lake_View/condos_townhomes/1147-W-WOLFRAM-ST-unit-3/

    Bought for $405k in June 2009 and just sold for $402.5K. And that has to actually be down from the peak.

    I rest my case.

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  49. sabrina still can’t comprehend the difference between asking price and sold price which is what is leading to her misunderstanding of where prices are at

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  50. “And this is in the Chicago suburbs? Wow.”

    No, it’s not.

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  51. “dismiss every shred of evidence I present using the “special circumstance” disqualifier”

    AKA the Stevo Heitman rules. Every single property that doesn’t support the hypothesis is excludable for some reason.

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  52. “And this is in the Chicago suburbs? Wow. We’re not even talking about Silicon Valley here.”

    Not the Chicago burbs. From what I can tell, while it is indeed hot in the prime city hoods, the Chicago burbs, even the nicest ones, are fairly buyer friendly right now, and as the boomers continue to move either into the city or to warmer climates, it’s only going to get more buyer friendly in the burbs.

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  53. “new or updated carries a premium”

    True, and we don’t have much new YET. It’s coming in the neighborhoods where 3 and 6 flats are popping up, but in the City. In spite of all the cranes on the horizon – it’s nothing but apartment building after apartment building.

    As for updated – if it’s in a good location, in good condition, and priced well, it’s sold.

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  54. Gary’s examples:

    3010-N-SHEFFIELD-AVE: That whole strip was full of fraud; ’07 original prices weren’t real prices. Compare to the first post-crash sale in the strip, which was closer to real value–up huge!!

    3725-N-Sheffield-AVE: Same thing, except not in the strip of fraud, just a single building.

    3306-N-Clifton-AVE: 400 and 425 are basically the same thing.

    1147-W-WOLFRAM-ST: You’re grasping at straws Gary–that’s the same price. (nevermind the 10% aggregate inflation over those 6 years)

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  55. I said Wolfram was flat. My point is that not everyone is making tons of money like Sabrina said and that you do not have to pay a minimum of $450k to get a 2/2.

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  56. “My point is that not everyone is making tons of money like Sabrina said”

    I was proposing objections to your list.

    I (generally) agree with you on the point.

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  57. “AKA the Stevo Heitman rules. Every single property that doesn’t support the hypothesis is excludable for some reason.”

    his other rule was that a good buy could only be determined retrospectively. A good buy sold for a higher price and a bad buy sold for a lower price; and that could only be determined after the sale had occurred years after the original buy.

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  58. “his other rule was that a good buy could only be determined retrospectively.”

    I think of that as a corollary to the rule–it meant that a place that would otherwise be impossible to distinguish from a “good” property (that is, a renovated or new SFH on a nice sidestreet in LP) would be excluded as having been purchased by a fool, if it sold for less.

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  59. Gary – the sarcasm is going over your head.

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  60. “Every single property that doesn’t support the hypothesis is excludable for some reason.”

    But then what is the hypothesis?

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  61. “But then what is the hypothesis?”

    Stevo’s? That “good” LP property will NEVER go down in value.

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  62. “Classic permabear meltdown by Sabrina.”

    I haven’t been bearish for awhile so I don’t know why you’re calling it a meltdown.

    I’m SUPER bullish on the US economy. Everyone I talk to in Chicago is getting pay raises. They have multiple job offers. They’re getting special perks by their employers because they’re scared they’re going to leave. This is all super bullish. And gasoline is staying really low which means more money to spend. The housing market has exploded. I’m expecting this to be the hottest spring yet- hotter than even 2013.

    In the GZ you can basically ask whatever you want and you’ll get it. Even for a dump. Most things are under contract within a week of being on the market. Super low inventory means maximum prices.

    It is crazy out there.

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  63. “I haven’t been bearish for awhile so I don’t know why you’re calling it a meltdown.”

    Define “awhile”….

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  64. “Define “awhile”….”

    We talked about this 2 months ago- in the same posts where you pasted my comments about the Fed raising. I don’t remember what I said then. 6 months? So this is now 8 months? I don’t know. I’m sure you can find my prior comments. You were all into it because that meant you were definitely bearish now- you know the “do the opposite of Sabrina” spiel you say every single time.

    That’s when you said housing prices would fall in 2016 because we were going into recession.

    The economy is WAY too hot right now and rates are staying low. Those rates will allow people to buy the housing that is now at record high prices.

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  65. I don’t think the fed will raise rates again until december if at all, inflation is practically nonexistant with this negative feedback loop going on right now.

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  66. It all reminds me of bizarro HD, when he was about to sign, and while under contract to buy (and for a while after??).

    So, Sabrina, where are you buying? Long Grove? Naperville?

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  67. Sabrina you are so super bullish on the U.S. economy. So is the print media and magazine articles. This may be a contrarian indicator. So far into this year it seems like the ghosts of 2008 are slowly coming back.

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  68. “the ghosts of 2008 are slowly coming back”

    What do you consider the ‘ghosts of 2008’??

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  69. “What do you consider the ‘ghosts of 2008’??”

    The redefault of every HAMP loan ever given

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  70. “The redefault of every HAMP loan ever given”

    that’s fair.

    But, as of 9/30/15, there were 567,618 outstanding HAMP mortgages, 78.1% of which were (then) current. So we’re talking about 443k mortgages–I beleive that that is a smaller number than here were NINJa OARMs in California alone in 2008. So it’s just not really a systemic risk.

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  71. HOPE NOW: Mortgage Servicers Completed 768,000 Loan
    Modifications for Homeowners in 2013
    Total Loan Mods Since 2007 at 6.84 Million

    http://www.hopenow.com/press_release/files/HN2013Full%20Data_FINAL.pdf
    (warning, annoying file format!)

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  72. “HOPE NOW”

    That’s not HAMP.

    It’s like first citing the AIG bailout and then using data about GM/Chrysler.

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  73. I meant HOPE NOW rather than HAMP, jesus H christ, or loan mods in general, cut me a fricken break.

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  74. “I meant HOPE NOW rather than HAMP”

    You use that in court?

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  75. I’ve been sick with the stomach flu 3 out of the last 3 days, and I’m posting here because i can barely concentrate on getting my real work done, and I shouldn’t even be in the office right now, but there’s work to be done unfortunately, so cut me some slack ok

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  76. A lot of those HAMP / Hope Now or whatever you want to call them will still default. Most were so far underwater and so on the edge financially that they’ll never payoff the debt. Modifications mostly just extended the terms, but never really address the underlying problem.

    I had a painter ask me to look at his modification offer once. He bought the home for like $350 in Berwyn IIRC. Appraisal at the time was like 175k. He owed $350k. Bank cut the mortgage down to like $250k and then re amortized it over another 30 years.

    Who knows when he will be able to sell at a high enough price to cover the mortgage balance. Most of these borrowers are not the type that can write a check at close. All it takes is one life event where the guy can’t make the payment anymore or just decides he needs to move.

    I felt like the smartest people were those who walked in 06-08. Most would have fully recovered credit wise by now.

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  77. “so cut me some slack ok”

    ok. but you’re usually pretty precise with those acronyms, so I took it at face value. ok?

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  78. “Who knows when he will be able to sell at a high enough price to cover the mortgage balance. Most of these borrowers are not the type that can write a check at close. All it takes is one life event where the guy can’t make the payment anymore or just decides he needs to move.”

    Sure, but if the payment is still in the ballpark of rent now, and if there is a spurt of inflation sometime, then it can turn out ok over a longer term.

    For anyone wanting/needing to move soon(ish–less than 10 years), yeah, its a total anchor.

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  79. Something came up yesterday so I couldn’t get to a new post.

    There will be something on Friday.

    But in the meantime, the 10 year is crashing so this means everyone can re-fi again (stimulus!) and renters will want to buy.

    Refi applications were up 9.2% last week while purchase apps were up 25% year over year.

    Last spring was pretty hot, so it looks like this season is setting up for an even hotter market. With inventory so low, that means soaring prices, bidding wars etc.

    With unemployment at 4.9%, this spring is setting up for the perfect market conditions for a booming housing market

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  80. “But in the meantime, the 10 year is crashing”

    vs

    “With unemployment at 4.9%, this spring is setting up for the perfect market conditions for a booming housing market”

    Any idea why these 2 statements might not go well together?

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