Market Conditions: Sales Up 7.5% YOY in Chicago in October As Median Price Soars

Finally, the Illinois Association of Realtors is out with the October sales data.

From the Illinois Association of Realtors:

The city of Chicago saw a 7.5 percent year-over-year home sales increase in October 2013 with 2,231 sales, up from 2,076 in October 2012.

The city of Chicago continues to see a steady market increase in median home pricing to $218,500 in October 2013 versus $175,000 in October 2012, a 24.9 percent increase, year over year.

Here’s the October data going all the way back to 1997 (thanks to G):

October Chicago sfh/condo/th sales and median
1997 1,731 $129,900
1998 1,855 $138,000
1999 1,978 $159,500
2000 2,106 $174,710
2001 2,177 $200,000
2002 2,503 $215,000
2003 2,996 $236,000
2004 2,651 $241,000
2005 2,846 $268,500
2006 2,630 $278,000
2007 2,007 $285,000
2008 1,564 $261,000
2009 2,068 $215,000
2010 1,225 $183,000
2011 1,324 $162,000 (44% short/REO sales)
2012 2,009 $175,000
2013: 2,231 $218,500

“Lower inventory options continue to raise pricing in the city as motivated, qualified buyers look to make their move as lower interest rates afford more value for their investment,” said Matt Farrell, president of the Chicago Association of REALTORS® and managing partner of Urban Real Estate.

“As the market continues to correct itself, buyers will appreciate increased value on their long-term investment. Absorption of distressed properties being rehabbed and resold will also continue to add value to the communities they are in,” Farrell added.

Chicago mirrored what was happening in other big metro areas in October (and nationally as well) as sales were up year over year but slowed compared to the gains in the spring and summer.

The expert the IAR uses every month blamed the slowdown on the government shutdown.

“While the partial government shutdown has certainly had a profound negative effect on the housing market’s continuing recovery, sales and prices are forecast to return to more robust growth rates over the next three months,” noted Geoffrey J.D. Hewings, Director of the Regional Economics Applications Laboratory of the University of Illinois.

“The declines in consumer sentiment suggest that a longer-term resolution to the government fiscal tensions would provide conditions that would significantly help the housing market.”

While, the National Association of Realtors’ in-house economist blamed affordability.

Lawrence Yun, NAR chief economist, said a flattening trend is expected. “The erosion in buying power is dampening home sales,” he said. “Moreover, low inventory is holding back sales while at the same time pushing up home prices in most of the country. More new home construction is needed to help relieve the inventory pressure and moderate price gains.”

The FOMC said in its October meeting minutes that the taper on bond buying will likely be happening at the next several meetings. The bond market reacted immediately by pushing up yields on the 10-year.

If mortgage rates start to rise again, what does that mean for sales over the next few months?

Can there be both rising home prices AND rising mortgage rates?

Illinois home sales increase 3.7 percent, median prices rise 13.8 percent in October [Illinois Association of Realtors, Press Release, November 20, 2013]

October Existing-Home Sales Cool but Low Inventory Drives Prices [National Association of Realtors, Press Release, November 20, 2013]

Market Conditions: Are the Downtown Apartment Rent Increases Over?

Almost a bigger story than the recovery in the real estate market has been rising apartment rents in Chicago and the construction of thousands of new luxury rental apartments in the GreenZone.

Crain’s reports that occupancy rates and rental rates in Class A buildings appear to be softening just as 5,000 more apartments are due to hit the market over the next two years.

From Crain’s:

The overall downtown apartment occupancy rate dropped to 92.6 percent in the third quarter, down from 95.3 percent a year earlier and the lowest rate since the end of 2009, according to a report by Appraisal Research Counselors, a Chicago-based consulting firm.

Landlords used to having the upper hand over tenants are seeing that leverage slip away, at least at the high end. Net rents at Class A downtown apartment buildings fell to $2.53 a square foot in the third quarter, down 1.9 percent from a year earlier, according to the report. It was the first year-over-year rent decline in nearly four years.

“The market fundamentals are not supporting the level of supply that’s coming online, and the situation appears to be getting more out of balance as opposed to getting back into balance,” Appraisal Research Vice President Ron DeVries says.

A key demand measure, absorption—the change in the number of occupied apartments—fell to 901 units in the past four quarters in downtown Chicago, down from 1,198 in the prior 12 months and the lowest level since 2005.

Strangely, if you’re not a brand new building, apparently the bloom is off the rose even if the building was considered the top of the luxury chain just a few years ago.

But older buildings are losing tenants to their newer, sexier competitors. Exhibit A is Aqua, the 82-story East Loop high-rise with 474 apartments. It’s hardly frumpy: The building is only four years old and its wavy design has won over architecture critics.

But Aqua’s occupancy dropped to 86.3 percent in the third quarter, from 98.1 percent a year earlier and the lowest level since the building was leased up, according to Appraisal Research. The building is about 90 percent occupied now, says David Carlins, president of Chicago-based Magellan Development Group LLC, which developed the tower and owns a stake in it.

Aqua faces competition from a 515-unit tower called Coast that Magellan recently built just a couple of blocks away, and two high-rises in Streeterville, but Mr. Carlins says he isn’t concerned.

“Everything affects us to some degree, but it hasn’t been a draining of the building,” he says.

If he’s nervous about anything, it’s the potential for some landlords to overreact to the supply surge by offering rent concessions to fill up their buildings, forcing everyone to follow.

“We’re cautiously optimistic that they will keep their heads about them,” he says.

Class B rental buildings, meanwhile, are still seeing rental price holding. They were actually up 3.2% in the third quarter to $2.27 a square foot.

The article seems to indicate that many landlords are waiting for employees of Google’s Motorola Mobility unit, which is moving to Chicago next year, to occupy a bunch of apartments but how many employees will that be (who don’t already have a family and a single family home in the suburbs)?

Are they overbuilding luxury apartment rentals?

And if they do- does that mean good things for the condo market? (i.e.- will landlords simply convert them into condos since that market is still hot?)

Have high rise apartment rents peaked? [Crain’s Chicago Business, Alby Gallun, November 18, 2013]

The Townhouse As the New Starter Home in Lakeview: 2820 N. Greenview

This 3-bedroom corner townhouse at 2820 N. Greenview in Lakeview came on the market in October 2013.

We’ve chattered about this complex of townhouses at the corner of Wolfram and Greenview several times over the years.

Most of the others we’ve chattered about were smaller 2-bedroom properties. But a 3-bedroom automatically puts you in “starter home replacement” territory.

The “affordable” 3-bedroom Lincoln Park and Lakeview townhouses are the most prized.

Two of the three bedrooms are on the second floor with the third in the lower level. The two bedrooms are also ensuite.

The kitchen has maple cabinets, stainless steel appliances and granite counter tops.

It has a lower level family room and a generous 3.5 baths.

There’s garage parking but only a small outdoor space.

Someone wrote me about this townhouse a few weeks ago and said it would sell quickly as the agent was arranging all the showings on one day but 3 weeks later it’s still available. (So what happened?)

It’s also listed just $7400 above the 2009 purchase price.

Are townhouses in Lakeview a “good” buy?

Several of the owners didn’t exactly make a killing.

Amanda McMillan at @Properties has the listing. See the pictures here.

Unit #A: 3 bedrooms, 3.5 baths, no square footage listed, garage
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  • Sold in August 2000 for $360,000
  • Sold in May 2004 for $480,000
  • Sold in March 2009 for $532,500
  • Currently listed at $539,900
  • Assessments of $150 a month
  • Taxes of $7333
  • Central Air
  • Bedroom #1: 18×15 (second floor)
  • Bedroom #2: 15×10 (second floor)
  • Bedroom #3: 11×10 (lower level)

[/unordered_list]

Selling For What You Paid Nearly 10 Years Ago in Lincoln Park: A 2/2 at 600 W. Drummond

This 2-bedroom at 600 W. Drummond in Lincoln Park has been on the market since October 2013.

This complex was built in 2003.

At 1274 square feet, it has hardwood floors in the living/dining room.

The kitchen has maple cabinets, granite counter tops and stainless steel appliances.

It has the features buyers look for including washer/dryer in the unit, central air and garage parking.

The balcony faces east, over Clark.

Originally listed at $425,000 WITH the parking included, it recently stripped out the parking and “reduced” to $399,999 with the parking $25,000 (although the listing description hasn’t really been updated to reflect that.)

Unit #307, directly below it and with the same square footage, is also on the market listed at $425,000.

This unit was last purchased in March 2004, or over 9 years ago, for $399,500 with the parking.

It basically has seen NO appreciation in nearly 10 years.

As Roma said, you have to live somewhere.

But with incomes stagnant and mortgage rates off their all-time lows, is zero appreciation the new norm for 1 and 2-bedroom condos in Lincoln Park?

Juliana Yeager at @Properties has the listing. See the pictures here.

Unit #407: 2 bedrooms, 2 baths, 1247 square feet
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  • Sold in March 2004 for $399,500 (included the parking)
  • Originally listed in October 2013 for $425,000 (included the parking)
  • Reduced (sort of)
  • Currently listed at $399,999 (parking is now $25,000 extra)
  • Assessments of $423 a month (includes cable)
  • Taxes of $5918
  • Central Air
  • Washer/Dryer in the unit
  • Bedroom #1: 16×12
  • Bedroom #2: 15×10

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Crib Chatter Is On Hiatus

Crib Chatter was going to go on hiatus as of November 1 but with the market so slow there’s no time like the present.

I have major projects going on in November so this is a good time to take a break.

I will still be posting periodically, mostly on market conditions, including monthly sales, until inventory picks up.

The site will remain operational, including the forums.

Happy house hunting everyone!

 

Trying to Re-Sell a 2/2 in 235 W. Van Buren in the Loop

This 2-bedroom at 235 W. Van Buren in the Loop has been on the market since September 2013.

This building gained some infamy during the real estate bust because it was completed just as the bust was picking up steam and it has still yet to sell out all of its units.

With little other new construction condos on the market in the Loop, it has been slowly selling its remaining units.

However, those who bought a few years ago are now also competition for buyers.

This 2-bedroom is 1034 square feet and has north views.

The listing says it has had $40,000 in upgrades including a double oven and a custom glass room divider for the second bedroom.

The kitchen has stainless steel appliances and granite counter tops.

There are hardwood floors throughout.

It has central air and washer/dryer in the unit.

It doesn’t look like the unit has parking, however. But there IS parking in the building.

Originally listed at $345,000, it has reduced $25,000 to $320,000.

That is still $50,000 over the 2010 purchase price.

Will it get the premium?

What’s the future for this building once it’s finally done selling units?

Katharine Dolan at Jameson Sotheby’s has the listing. See the pictures here.

Unit #1616: 2 bedrooms, 2 baths, 1034 square feet
[unordered_list style=”bullet”]

  • Sold in September 2010 for $270,000
  • Originally listed in September 2013 for $345,000
  • Reduced
  • Currently listed at $320,000
  • Assessments of $336 a month (includes a/c, doorman)
  • Taxes of $4583
  • Central Air
  • Washer/Dryer in the unit
  • No parking
  • Bedroom #1: 12×10
  • Bedroom #2: 12×10

[/unordered_list]

Is Significant Appreciation Over in Lincoln Park? 628 W. Wrightwood

This 2-bedroom in 628 W. Wrightwood in Lincoln Park came on the market in September 2013.

This is an elevator 5-story building so you don’t have to worry about carrying groceries or kids up a bunch of stairs.

At 1400 square feet, it has hardwood floors and crown molding.

The kitchen has granite counter tops and stainless steel appliances.

The baths are marble.

There’s garage parking and a community roof top deck.

It has central air and washer/dryer in the unit.

The unit was just reduced $9,000 and is now listed $7,000 under the 2008 purchase price.

It’s also listed just $15,000 above the 2002 purchase price.

That’s 11 years with almost no appreciation (or maybe negative appreciation depending on what it sells for.)

Even as many people still equate Lincoln Park with one of the “best” neighborhoods- for real estate- it appears to be lagging other neighborhoods in appreciation.

If you have a time horizon of less than 5 years, should you stay away from buying in Lincoln Park?

Christopher Mundy at @Properties has the listing. See the pictures here.

Unit #3W: 2 bedrooms, 2 baths, 1400 square feet, den
[unordered_list style=”bullet”]

  • Sold in June 1998 for $379,000
  • Sold in August 2002 for $500,000
  • Sold in May 2008 for $522,000
  • Originally listed in September 2013 for $524,000
  • Reduced
  • Currently listed for $515,000
  • Assessments of $320 a month
  • Taxes of $6749
  • Central Air
  • Washer/Dryer in the unit
  • Garage Parking included
  • Bedroom #1: 18×13
  • Bedroom #2: 13×11
  • Den: 11×8
  • Laundry room: 10×5

[/unordered_list]

Should You Rent the 2/2 or Should You Buy It? 2754 N. Hampden in Lincoln Park

This 2-bedroom at 2754 N. Hampden Court in Lincoln Park just came on the market.

It’s a complete rehab and has most of the features buyers look for.

The kitchen has dark cabinets, stainless steel appliances and a tile backsplash.

There’s crown molding and dark wood floors in the main living area.

It’s a split floor plan with the bedrooms on opposite sides of the unit.

Parking is included and there’s a washer/dryer in the unit.

There’s no central air but there is wall air conditioning.

This building is a full-service building with a doorman, an exercise room and a rooftop pool.

I used the mortgage calculator on Baird & Warner’s website with a 20% down payment on the asking price (or $75,980) with a 4% 30-year rate.

Monthly payment is: $2625

Should you buy it or rent it?

Karen Pence at @Properties has the listing. See the pictures here.

Unit #1603: 2 bedrooms, 2 baths, 1300 square feet
[unordered_list style=”bullet”]

  • Sold in May 2013 for $212,500 (was this one unit combined with another for a 2/2?)
  • Currently listed for $379,900 (parking included)
  • Assessments of $603 a month (includes pool, doorman, cable)
  • Taxes of $5905
  • No central air- wall units only
  • Washer/Dryer in the unit
  • Bedroom #1: 14×12
  • Bedroom #2: 12×11

[/unordered_list]

Market Conditions: Chicago September Home Sales Were the Best in 7 Years

The Illinois Association of Realtors is out with the September 2013 home sales.

Both sales and prices continued to rise.

The city of Chicago saw a 23.4 percent year-over-year home sales increase in September 2013 with 2,352 sales, up from 1,906 in September 2012. 

The median price of a home in the city of Chicago in September 2013 was $231,000 up 22.6 percent compared to September 2012 when it was $188,400. Chicago condo median prices continued to see double-digit gains, posting a 18.7 percent jump to $273,000. Average time on market in the city was 50 days, down 30.6 percent compared to 72 days in September 2012.

September sales for the last 7 years:
[unordered_list style=”bullet”]

  • 2007: 2172 sales
  • 2008: 1816 sales
  • 2009: 1918 sales
  • 2010: 1403 sales
  • 2011: 1498 sales
  • 2012: 1845 sales
  • 2013: 2352 sales

[/unordered_list]
Median prices for the last 7 years:
[unordered_list style=”bullet”]

  • 2007: $267,750
  • 2008: $268,600
  • 2009: $225,000
  • 2010: $180,000
  • 2011: $190,000
  • 2012: $188,900
  • 2013: $231,000

[/unordered_list]
Thanks to G we also have a longer history of the September condo/townhouse sales. While prices were up year over year, it still trails the Great Recession year of 2008 though it is now beating the second Great Recession year of 2009.

The  higher median price is also probably due to fewer distress sales.

Year/Sales/Median

1996 757 $127,000
1997 959 $142,900
1998 1,158 $158,950
1999 1,195 $180,000
2000 1,255 $219,900
2001 1,249 $223,000
2002 1,621 $245,000
2003 2,114 $255,500
2004 1,960 $269,450
2005 2,344 $276,538
2006 2,006 $285,000
2007 1,650 $310,200
2008 1,188 $311,750
2009 1,159 $270,000
2010 820 $240,000
2011 863 $234,600
2012 1130 (don’t have median price data)
2013 I don’t have the number of condo sales but median price was $273,000

“The city of Chicago saw a 25.4 percent year-to-date home sales increase through September 2013 over the same nine month period in 2012, to 20,904 units sold, over last year’s 16,674,” said REALTOR® Matt Farrell, managing partner at Urban Real Estate and president of the Chicago Association of REALTORS®. “The surge we’ve seen is likely due to an increased feeling of stability in the housing market, as well as the return of jumbo loan options for buyers. Chicago remains among the most affordable urban markets for families looking to make a world-class city their home, and still offers attractive housing options for those in the first-time buyer or move-up marketplace.”

“The partial government shutdown has dampened the housing market’s continuing recovery,” noted Geoffrey J.D. Hewings, Director of the Regional Economics Applications Laboratory of the University of Illinois.  “However, both sales and prices are forecast to continue at a much faster rate than a year ago and continued completion rates for foreclosures promise a return to a more normal market situation within 6 to 12 months.”

These are solid numbers at a time when interest rates were rising.

With inventory still low, why aren’t more developers building more new product?

Illinois housing gains extend into fall; Sales up 19.8 percent, median prices rise 12.9 percent in September [Illinois Association of Realtors, Press Release, October 21, 2013]

Luxury Loft Week: Multi-Level Brick and Timber With a Rooftop Deck in Streeterville: 540 N. Lake Shore Drive

This 2-bedroom loft at 540 N. Lake Shore Drive in Streeterville has been on and off the market since 2009.

At 2520 square feet, it has the features loft buyers love including nearly every wall done in exposed brick and tall timber ceilings.

The loft has a loft of its own on the second floor which also leads to the private rooftop deck, although it doesn’t appear there are lake views from it.

The kitchen has maple cabinets, stainless steel appliances and stone counters.

The loft has central air but no in-unit washer/dryer.

There’s also no deeded parking with the unit but there is rental in the building.

This loft was listed as high as $1.09 million in 2009.

When it came back on the market this August, it was listed at $839,000.

It has since reduced $40,000 to $799,000.

Is this loft now priced to sell?

Amy Settich at Coldwell Banker has the listing. See the pictures here.

Unit #718-719: 2 bedrooms, 2 baths, 2520 square feet
[unordered_list style=”bullet”]

  • Sold in July 1998 for $175,000 (this looks like it could be a combined unit of some sort so I’m not sure if the PIN includes just one of the units or not)
  • Sold in August 2000 for $230,000
  • Was listed in 2009 for $1,099,900
  • Withdrawn in 2010
  • Re-listed in August 2013 for $839,000
  • Reduced
  • Currently listed at $799,000
  • Assessments of $1176 a month
  • Taxes of $7978
  • Central Air
  • No washer/dryer in the unit
  • Rental parking for $205-$245 a month
  • Bedroom #1: 16×22
  • Bedroom #2: 21×22

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