My Favorite Virtual Tours

These are some places that my team and I have listed for sale. Take a look at these beautiful homes using a 360 degree virtual tour...very cool stuff!

Beautiful 5BR/5.5BA Custom Built Home

HUGE 3BR Restored Vintage Condo In Lakeview

Another Enormous and Beautiful Home 6BR/5.5BA (potential short sale!)

Mark-to-Market

What determines the market value of property? Think about what the term market value means... Market value is the highest amount that someone in an open market is willing to pay for something.

That's why today's real estate market is very tough for sellers. Many fail to realize that market value is not determined by how much was originally paid for the property, or by how much the property's value "should have" increased since you bought it. A property's market value is equal only to what the market is willing to pay for the property NOW. This is dependent on a number of factors, specifically factors related to the economy. When unemployment is increasing, credit (lending) is tightening, the dollar's value is falling, people are losing equity in other investments, and cost of living is still rising... the market value of a given property will decrease. Why? Because in a market like that, people have less buying power and tighter budgets. Unfortunately this is the case today.

The best way to determine the market value of your property is to get as many potential buyers in for showings as possible. The more people that see it, the more opportunities you have to receive offers.

Of course, before you get showings on your property you have to decide on a listing price. Sounds like a catch-22, right? Not really. Your realtor should be familiar enough with the market to know what properties similar to yours have been selling for in recent months. This is why it is very important you sit down with your realtor and have them do a comparable market analysis (CMA) for you before listing your property for sale.

I'd rather have a seller price their property lower and leave minimal negotiation room, than price the property too high (to leave room for negotiation) and not get any showings. With as much housing inventory as there is right now, people do not have the time to see everything. So they'll start from the lowest priced properties and work their way up. Don't let your property be the last on the list for viewing!

I'd also rather see a seller get 5 low offers that they have to turn down and finally get one good offer, than not get any offers at all because the property was priced too high to attract showings.

My point? Price your property reasonably and you may even end up with a better offer than if you'd priced it too high!

How Long Should It Last?

If you've been home-shopping recently, you may have heard comments such as "the roof is 8 years old"... but for some buyers this doesn't mean much. Is that old? Is that new? How long should a roof be expected to last anyway? Well, the National Association of Homebuilders (NAHB) has some answers for you.

The NAHB did a survey to determine the average life expectancy of a number of household items and appliances. Of course these are just average expectancies, and some other factors play a major role in how long something will last, such as quality of installation, frequency of use, and standard of maintenance.

Here are some common household components and their life expectancies (in years):

Dishwashers - 9 yrs
Washing Machine - 10 yrs
Dryer - 13 yrs
Electric Water Heater - 11 yrs
Gas Water Heater - 10 yrs
Refrigerators - 13 yrs
Microwave - 9 yrs
Electric Range/Stove - 13 yrs
Gas Range/Stove - 15 yrs
Electric Furnace - 15 yrs
Gas Furnace - 18 yrs
Brick Masonry - 100+ yrs
Stucco Siding - 50 to 100 yrs
Cultured Marble Counter - 20 yrs
Natural Stone Counter - lifetime
Wooden Decks - 20 yrs
Fiberglass, Steel, or Wood Doors - lifetime
Screen Door - 40 yrs
Vinyl Door - 20 yrs
French Door - 30 to 50 yrs
Copper Electrical Wiring - lifetime
Whirlpool Tubs - 20 to 50 yrs
Carpet - 8 to 10 yrs
Concrete Flooring - 50+ yrs
Marble Flooring - 100+ yrs
Slate Flooring - 100 yrs
Tile Flooring - 20 yrs
Laminate Flooring - 15 to 25 yrs
Linoleum Flooring - 25 yrs
Vinyl Flooring - 50 yrs
Wood Flooring - Lifetime
Engineered Wood Flooring - 50yrs
Exterior & Interior Paint - 15+ yrs
Asphalt or Modified Bitumen Roof - 20 yrs
Coal & Tar or Wood Roof - 30 yrs
Slate Roof - 50 yrs
Clay/Concrete Roof - lifetime

Believe it or not, these are only a selection of what I find to be most useful for buyers to know... if you want the complete list, do not hesitate to contact me!

MONTHLY MARKET STATS - APR 08

In the month of April, we saw an almost across-the-board increase in market supply, in what I believe to be a correction to the sudden supply drop of the previous month. A number of buyers were hit hard in April as mortgage restrictions tightened again, decreasing demand for homes. My prediction is that May will yield an overall stabilization in market supply, with the exception of the Near South where supply will significantly drop from this month. I attribute much of the Near South Side's increase in market supply to several developments that listed a number of units for sale in April, including 1555 S Wabash and 1211 S Prairie.

Based on currently available home inventory and units which sold & closed in the month of April, below you'll see the current amount of housing supply in various Chicago neighborhoods. Next to each neighborhood, I am indicating whether the supply has increased or decreased from MArch. The information I'm including is based on attached housing (condos/town homes). If you'd like another type of information, please contact me and I'd be happy to help.

North Center = 7 months (decrease)

Loop = 7 months (increase)

Lakeview = 8.5 months (increase)

Logan Square = 8.5 months (decrease)

West Town = 10 months (no change)

Uptown = 10 months (increase)

Lincoln Park = 11 months (increase)

Lincoln Square = 14 months (increase)

CHICAGO ENTIRE MARKET = 14.5 months (increase)

Near West = 15 months (increase)

Near North = 15 months (increase)

Near South = 23.5 months (increase)

Invest Creatively

You know it's a buyer's market. You think it's a great time to invest in real estate because you know that prices are low and are bound to turn around at some point. But you don't have enough cash. Or you're not sure the rent you'd receive would cover the mortgage. But you know the appreciation over time would be worth investing now. If you're interested in investing in real estate for the long-term but aren't sure how to fund it, consider an often-overlooked asset that can be used for investing in property. Your retirement fund.

Since 1974, the IRS has permitted individuals to self-direct their Individual Retirement Accounts (IRAs). The majority of the population will open a brokerage account and buy some equity shares (stock) in a company they think will be a winner. They'll buy shares of a mutual fund or invest in the money market. Or they'll invest their 401K in a few of a handful of funds offered by their company. And the more conservative investor will choose notes and bonds. But a retirement account allows you to invest in ANYTHING that is held for investment purposes. So why limit your investments to financial securities? It is unbelievable to me that only 3-4% of existing IRAs are invested in alternative assets!

Before I go further, let me clarify to avoid any confusion. Please understand that what I am talking about is different from BORROWING from your IRA in order to purchase a home. I'm referring to actually investing your IRA funds in a piece of real estate which is to be held as an investment only. You don't borrow from the IRA and pay it back; you are directly investing the IRA funds into the property itself, rather than a stock, bond, or other similar security.

There are a number of restrictions on investing your IRA in real estate, however if you find a great opportunity, it is well worth speaking with a qualified person on whether this can be done or not. You'll need to speak with several professionals, including an attorney, CPA, financial advisor, custodian, and of course a realtor to help you find the property and deal with processing the transaction. But it can be done!

Your options span from a rental property in Malibu, a strip mall in Arizona, vacant land in Montana, pre-construction in Chicago, a fixer-upper elsewhere, or even a hog farm in Iowa. Anything goes. The basic rules require that the property must be held for investment purposes only - that is, you and/or your family cannot live in it or gain any benefit other than the cash flow (which flows back into your IRA) and appreciation it provides.

Next time you open your retirement account statement and cringe at the dwindling numbers due to today's economy, think about what other options you have as far as investing in a tangible asset that will provide long-term appreciation.

Contact me for more info.

Monthly Market Stats - Mar 08

Based on currently available home inventory and units which closed in the month of March, below you'll see the current amount of housing supply in various Chicago neighborhoods. Note the significant decrease in overall market supply from February. Next to each neighborhood, I am indicating whether the supply has increased or decreased from February. The information I'm including is based on attached housing (condos/town homes). If you'd like another type of information, please contact me and I'd be happy to help.

Loop = 4 month supply on market (decrease)

Lakeview (includes Wrigleyville, Southport Corridor, Boystown) = 7 mo (decrease)

Lincoln Square = 7.5 mo (decrease)

North Center = 8 mo (decrease)

Lincoln Park (includes Depaul area) = 8 mo (decrease)

Uptown = 9 mo (decrease)

Near South (includes South Loop, Printer's Row) = 9.5 mo (decrease)

West Town (includes Wicker Park, Ukrainian Village, Humboldt Park) = 10 mo (increase)

Logan Square (includes Bucktown) = 11.5 mo (decrease)

CHICAGO ENTIRE MARKET = 11.5 mo (decrease)

Near West (includes West Loop, Medical District, Tri-Taylor) = 11.5 month (decrease)

Near North (includes Gold Coast, River North, Streeterville, River West, Old Town) = 12 mo (increase)

As you can see, all but two neighborhoods decreased in amount of supply for March. Before you dust off your high school economics book, I'll just tell you what this means:

1) You won't see price drastic reductions as frequently as you have seen the past year

2) There are less options for buyers

3) There is less competition for sellers

4) If you're a buyer waiting for prices to "hit rock bottom"... you already missed it. Start your search now before the supply shrinks even more.

Read Me, I'm Irish

Well... it's that time of year again. In Chicago things start to get a little crazy in March. It's that time of year when we're almost over that last bump in the rollercoaster ride we call winter... spring break is just around the corner and once in a while we get a glimpse of the sun again. We are teased by a day here or there above 50 degrees, to be followed by snowfall the day after. Basketball season takes a very serious turn as March Madness begins, and most importantly we begin a 2 week celebration for a one day holiday... St. Patrick's Day.

One thing you cannot miss if you live in, around, near, or even far from Chicago is the annual South Side Irish Parade. Unfortunately - and I hate to say it - I am missing it this year. Since my job requires me to usually be working on Sundays, I unfortunately can't partake in this year's green-clad, bagpipe-playing, luck-'o-the-irish vibed, all day drink-a-thon. But I have been before so I can assure you it's well worth your while, even if you're not Irish.

You'll find the parade in Chicago's historic Beverly neighborhood. If you're going for a family outing and will be attending with the little ones, stick to the east side of the street. Head west and you're in for a rowdy ride.

The Beverly area is a unique icon in the City's landscape due to its large lot sizes, numerous single family homes, neighborhood feel, rolling hills, and of course its abundance of Irish pubs. The strong Irish-American population and heritage in the area is what has drawn the country's largest neighborhood parade.

Well, I hope you made it to the parade today, and if so, I imagine you won't be reading this post anytime today. If you're like me and were unable to go, I suggest you polish up your blarney stone and get ready to make up for all you missed next weekend when you celebrate St. Paddy's with a night (and day) on the town.

[The first photo is of my Uncle Ed Kane of the Emerald Society in the 2007 South Side Irish Parade, of course taken from the west side of the street :-) ]

MONTHLY MARKET STATS - FEB 08

Based on currently available home inventory and units which closed in the month of February, below you'll see the current amount of housing supply in various Chicago neighborhoods. I'll continue to update this each month so you can see the market dynamics. The information I'm including is based on attached housing (condos/townhomes) . If you'd like another type of information, please contact me and I'd be happy to help.

Loop = 9 month supply on market

West Town (includes Wicker Park, Ukranian Village, Humboldt Park) = 9 mo

Near North (includes Gold Coast, River North, Streeterville, River West, Old Town) = 10 mo

Lakeview (includes Wrigleyville, Southport Corridor, Boystown) = 10.5 mo

Uptown = 12 mo

Near West (includes West Loop, Medical District, Tri-Taylor) = 12 month

Logan Square (includes Bucktown) = 13 mo

Lincoln Square = 13 mo

CHICAGO ENTIRE MARKET = 13 mo

Near South (includes South Loop, Printer's Row) = 14 mo

North Center = 15 mo

Lincoln Park (includes Depaul area) = 16 mo

What the market supply means: at the current rate at which homes are closing sale, it will take X months for all of the homes currently on the market to be sold & closed. This is an indicator of the current DEMAND for attached housing in these neighborhoods. You can compare these statistics to future months to help you understand how demand is changing over time.

For information on the boundarylines of each of these neighborhoods, good old Wikipedia should help: http://en.wikipedia.org/wiki/Chicago_neighborhoods

The Real Estate Papparazzi #3

At least not everyone is hesitant to invest in the real estate market today. The most saavy investors realize that the "buy low, sell high" adage applies right now to the housing market. Anyone who is waiting for "prices to hit rock bottom" already missed it.

Shares of the S&P Homebuilders Sector Spider (XHB), an ETF of the largest public residential homebuilders has risen 7% this year! In a year when house prices are down about 4% for the Chicago area and much more in other parts of the country, a 7% increase in real-estate derived investments is a serious sign of what's to come!

Just Listed! Edgewater Neighborhood!

SUNNY, SPACIOUS & BEAUTIFUL 2 bed/1 bath near the lake and beach for $195,000! Click HERE for more info!

Please Refer to...

My line of business is heavily reliant on referrals. So for my post today I am going to refer you to someone else's blog post that I think will be interesting to anyone curious about the real estate market's affect on the availability of financing.

http://www.themortgagereports.com/2008/02/how-the-declini.html

Transfer Taxes for Transportation

If you live in Chicago, you're sure to be familiar with the hotly debated CTA funding issue. The City has threatened to raise fares and cut bus routes if they don't get the additional funding they need. So on Feb 6, next week, the Chicago City Council will be voting whether to raise the city's real estate transfer taxes in order to fill the transportation funding gap.

The vote is for a 40% increase in the real estate transfer tax. This would mean that buyers of real estate would pay $10.50 in taxes per $1,000 of each real estate transaction, compared to the $7.50 that they currently pay. For a $200,000 real estate purchase, this would increase the transfer tax by $600 to $2100!

Why would we increase real estate taxes by 40% in order to fund transportation? The tax will actually be funding CTA pensions and retiree health care plans. The tax won't add a single additional bus or train line or pay for upgrades or maintenance. The market is already struggling to come up with enough buyers to absorb the supply of housing... why make it even more difficult?

Visit http://wrongtax.com/ to voice your opinion on this issue or contact your alderman.

The Real Estate Paparazzi #1

Today's blog post is going to be the first of a group of posts titled "The Real Estate Paparazzi". Real estate is in the news so often these days that we almost seem to know what's going on in the market at all hours of the day, similar to how the paparazzi allow us to keep tabs on the daily lives of almost any celebrity we wish. I'd like to cover these topics and point out anything relevant to the Chicago market, as well as break them down into organized explanations. If you read any of today's headlines, you're sure to have noticed that they were chock-full of articles about how the housing market has plunged and has hit record lows and so-on. This was due to reports released by a few sources:

1) The Census Bureau report showed that 68.7% of all occupied homes were occupied by homeowners (versus renters). Last year, the number was 69.8%. This was the largest one-year drop on record. Not-so-good news for those unable to obtain a mortgage and are stuck renting, but not-so-bad news for landlords.

2) The SP/Case Schiller Index reported that this was the 11th consecutive month of negative annual home price returns nationally. This data is through Nov 2007. However, of the 20 major metropolitan areas surveyed, Chicago posted the 7th best annual return of -3.9%. Leading the pack was Charlotte who experienced a positive 2.9% annual return. Most hard-hit were Miami (-15.1%), San Diego (-13.4%), and Vegas (-13.2%).

3) Realtytrac, a real estate website which I subscribe to, reported that total foreclosure filings in 2007 increased by 75%. I just closed a bank owned foreclosure property last week which I got for my buyers at 18% below list price PLUS a $10,000 closing credit to them. If you're thinking about purchasing real estate right now for any reason, foreclosures might be the place for you to start looking. I have access to foreclosure listings; contact me so I can find you a great buy.

Is Now The Time To Buy?

I've gotten this concern very frequently from hesitant buyers. "I don't want to buy now because I'm afraid prices will drop even more in the coming months." Here are two things to consider:

1. Real estate is a long-term investment. If you plan to buy a place and then sell it in a year, then yes, you should be concerned about where prices are heading soon. However, if you are like most buyers and expect to hold onto your property for 3-5 or more years, there are sure to be natural ups and downs to the value of your property anyway. There is nothing you can do about that and you'll NEVER know when the price is at its absolute lowest. Waiting for prices to drop and drop and drop could potentially leave you in a situation where prices suddenly skyrocket, and where does that leave you?

2. Home prices are not the only thing to consider. Mortgage rates change just like home prices change. What if you KNEW that home prices will drop in 6 months? Well, then you might wait 6 months to buy your home. But what if you also KNEW that mortgage rates would rise in 6 months? Then what would you do? For instance, a P&I payment on a mortgage for a $300,000 home at 5.5% interest would be $1703/month. However, if the price of the home FALLS 3% but at the same time, mortgage rates go up 0.5 percentage points to 6%, your monthly P&I payment would be $1744. So, you'd actually be paying MORE per month for a home that cost less.

View this blog from a respected mortgage industry leader for more insight to the mortgage market and where rates might be headed. And this article from NAR will help you understand how the real estate market is predicted to fare this year.

10 Reasons to List Your Home During the Holidays

1. People who look for a home during the holidays are more serious buyers!

2. Inventory drops during the holiday season, meaning less competition for your home.

3. Houses show better when decorated for the holidays!

4. Buyers are more emotional during the holidays and more likely to pay asking price.

5. Buyers have more time to house-hunt during the holidays!

6. Some people must buy before year-end for tax purposes.

7. Many people start new jobs in January... those new to the area will be house-hunting before they start.

8. You can be on the market and still have the option to restrict showings during the days you are celebrating at home.

9. You can sell now at a better price and provide for a delayed closing or extended occupancy until early next year.

10. By selling now, you have the opportunity to be a non-contingent buyer during the spring when there are more houses on the market for you to choose from!

Ideal for Investors!

For anyone who has ever considered living or investing in the South Loop, I have a great deal for you. The Hanover Companies has created a very innovative program for real estate investors who want to purchase property in an area for use or sale at a later date who don't want to worry about finding and managing a renter. Their solution works for all parties involved. Here's how it works:

The Hanover Companies finds condo developers who are in financial trouble - those who need to SELL their condo units QUICKLY or else sink into even muddier waters. Hanover then strikes a deal with the developer to buy a bulk number of their condo units at a hugely discounted price. Hanover then turns around and sells to investors like you or I at going market rates. The incentive to you, however is such:

-Hanover will guarantee to rent your unit for TWO YEARS at a rental amount which generally covers your mortgage.

-Hanover PAYS YOUR PROPERTY TAXES

-Hanover PAYS YOUR ASSESSMENTS

-Hanover PAYS YOUR UTILITY BILLS (gas, water, sewer, cable)

-Hanover PAYS YOUR LEASING & MANAGEMENT FEES

-Hanover PAYS YOUR CLOSING COSTS

-Hanover gives you a TWO YEAR home warranty. For instance, say the furnace dies - it's covered. The ice maker in the freezer goes bezerk - it's covered. Etc. No worries to you.

This program is available in MANY developments throughout the country - Florida, Arizona, Vegas, Minnesota, and now CHICAGO! The Chicago development is called Vision on State at 1255 S State Street (State and Roosevelt), the heart of the South Loop and just steps away from public transportation and right next to a grocery store. There are 1 & 2 bedroom units available between $290,000 - $410,000. Parking is also available separately. These units are brand new (just finished in June), with granite counter tops, hard wood floors, balconies, washer/dryer hookups, and GREAT VIEWS. The building features a fitness room, business center, dog run, high speed internet access, and 24 hour doorman. There is availability up to the 19th floor. If you have any interest in the Chicago units, or others nationwide, contact me. Don't forget what an investment this might be if Chicago gets the 2016 Olympics where many of the events will be hosted VERY close to this location! See a picture from one of the units below.

Contact me for more information or to schedule a viewing of the available units!

OK, so a few questions you may ask:

Q: Do I have to use one of Hanover's lenders to qualify for this program? A: NO! You can use the lender of your choice. However, Hanover does have lenders you can work with if you like - you can get financing up to 90% with them.

Q: How do I know if the rental amount will cover my mortgage? A: The rental amount paid to you monthly = 8% of your purchase price divided by 12. This is USUALLY enough to cover your mortgage. Check with your lender to be sure.

Q: What happens after the 2 year program is over? A: From the start, the condo you purchase is yours. Hanover is only the tenant and does not have any ownership rights. After the 2 years is over, you can work with the current renter to continue renting the unit, you can use the unit yourself, or you can sell the unit. It's YOURS... do whatever you like with it.

Q: Can I get out of the program at any point? A: YES, however you must give Hanover 3 months advance notice for lease cancellation; some minor stipulations apply.

Q: They really pay my property taxes and assessments? A: YES. Taxes are paid at 1.5% of purchase price and assesments are paid. Simple as that.

Q: Are prices on the condos negotiable? A: Given that these are competitive going-market rates, the prices set by Hanover are not negotiable if you want to be a part of this program. Contact me if you'd like to see comparable properties in the market.

Q: What if I want to buy one of the condos but I don't want to participate in the 2 year program? A: You can still purchase through Hanover for 12% cash back at closing, should you choose not to take part of the rental program. Or, you can submit an offer to the developer. Contact me for more information.