1120 East 50th: List: $1.25M. Sold: $1.25M. Terms: Cash Broker: Local
4900 South Greenwood: List: $1.5M. Sold: $1.1M. Terms: Conventional Broker: Not Local
4739 South Dorchester: List: $568K Sold: $515K Terms: Conventional Broker: Not Local
Please note. The property that sold at list was listed by a local broker. Both other properties, which sold well below list, were sold by brokers who don't typically do business in Kenwood. This contradicts the some of the assertions in this thread.
I have not revisited this question for some time, seeing as it was beginning to serve as an anonymous indictment of the local real estate community. The local community, both residents and Brokers are generally good, ethical people. The University of Chicago and its incoming residents have been welcomed by the Hyde Park and Kenwood residents and businesses for over a century.
Property always sells for what someone is willing to pay for it. It really is that simple. Realtors are bound by ethics and agency law. If I am representing a buyer, I am serving the interest of that individual. Same goes for when I represent a seller.
Name, It seems you may have an issue with an individual or company. I would suggest bringing any ethical disputes to the Chicago Association of Realtors. The entirety of the Kenwood community is not conspiring to deceive the Greater Chicago Community.
I absolutely agree that a realistic pricing strategy is essential to getting properties sold in the current market conditions.
Also, 100% agreed that this market does not follow the all the traditional rules. Kenwood and Hyde Park have a complicated micro-economy. They are subject to market forces that simply don't exist in other markets. I could go on for a long time on this one, but brevity is a desirable trait, and my value as an agent is somewhat intertwined with my experiences over the years.
I also agree that it is incumbent on the buyer to make the final decision as to what they want to pay. An agent that simply ask "what's it worth to you?" when pricing is not diligently assisting his or her client. It is one of my responsibilities to provide the necessary information and context that forms a basis for their decisions.
Whether representing the seller, or the buyer, my clients and myself always pour over the comparables to make an informed decision in regards to the offering.
As a agent that takes great pride in my fiduciary responsibility, it's my charge to represent the interest of my client as diligently as I can. With buyers and sellers getting further apart on terms over the past couple years, it is even more important to "dig in" to ensure diligent representation and the best outcome for my clients. That said, and I hope you've gathered this from some of my other commentary on Trulia, it is also important to make sure that my client has a very accurate snapshot of pricing, competition and other market factors and indicators at the moment of crafting an offer and a listing. Ultimately, the offering is up to the client. It is up to me to choose to represent the business or move on. In a very emotionally charged real estate environment, I have been a fortunate agent in that the vast majority of my clients have been very pragmatic and straightforward.
I'll look into the List Price/Sale Price ratios and see how they stack up in other conditions. My experience has been that the gap has expanded in recent months, but was much closer, and sometimes reversed (where the SP was higher than the LP), in the past.
Thanks again for the feedback.
Feel free to contact me anytime.
The data I presented represents all of the single family closings for the past three months. It is a limited amount of data (the market is very sluggish) and this tells me that it's a great time to be a buyer. I wish you and name a great hunt for the perfect property.
It is always easy to pick out a few listings to make any argument. I don't see how that one closing at list price in your example disproves Name's main argument (and if I remember correctly, this home had a contract well before the meltdown in early August). The home in question (I have seen it) was indeed nice, and had quite a few updates, but had some outdated bathrooms and no parking (which, to me, is a must in Kenwood). There is also 1136 E. 48, I believe, that sold last summer at close to asking listed by the same local company (Some expansion, with a new gorgeous kitchen and a new detached garage, otherwise outdated, but IMO still overpriced relative to its last purchase just two or three years earlier - almost 50% increase). I never saw the S. Geenwood home, but from the listing, it seemed that - major - renovation was required. The S. Dorchester listing surely was hurt by a foreclosure in that same complex that sold for $440,000 a few months earlier (though, unlike the foreclosure, it was in top-notch shape, but with one less parking spot - I saw both listings). None of this disproves what Name is arguing.
Again, what do a few listings prove? How about the huge townhome on 4940 S Lake Shore Dr. that was finally sold last summer at 900k (below 2006 price) after being listed for well over a year (and starting out at a list price at over 1.3 initially, if I remember correctly)? Or the TH at 5330 S. South Shore that was initially listed at 1.1 million, and is now under contract close to its purchase price in 2001 in the mid 700ks (contract date after the market crash)? Both nice homes, actually, and listings by that same company. Would those sellers have been better off to start at less crazy list prices? Ex post, most certainly. Ex ante, who knows - I guess they could always have lucked out and gotten a clueless new faculty member.
I have followed the market in HP/Kenwood very closely for the past 2 years; as I have stated before, I am puzzled by the market dynamics here relative to Gold Coast, LP,... (the only explanation I could find was the presence of the university, and its out of town buyers - given the bubbles on the East and West coast, they might have considered even the overpriced homes here a bargain; that will change now that the bubbles in those areas are largely in the process of bursting, if they have not already). It is interesting to hear that you think there is nothing unusual about the market here relative to the rest of Chicago. Nevertheless, Name's postings resonated with me and my impressions of the market. I have even started to expand my search elsewhere, to get more bang for my buck.
Name's last point may well change the market dynamics here fundamentally. Just take a look at Crain's report a day or so ago about the University Hospitals contracting it's workforce by 10%, including senior management. Fewer buyers, more sellers...Maybe Name and I will be able to get a bargain after all in a few more months.
PS: There are disagreements within the HP community about whether that community is indeed welcoming to the University. There is a whole blog about that and similar issues at hydeparkprogress.
I warned them before hand that the Hyde Park/Kenwood market is different. It's not new construction so the houses would be in a condition that they were not accustomed to. What I wasn't prepared for as an agent who has been selling full-time throughout the Chicago area, is the market time. I agree with you, there is a problem when houses sit on the market for 700+ days! That says to me that there should be a price reduction, an incentive, something to get it moving. It also says that the sellers aren't that motivated. We visited a few houses that were on the market, testing the waters, because the owners have purchased a new construction unit at Soltice on the Park. They have their house on the market now because they're conditioned to think that it takes 2 years to sell. That's alarming.
I definately think the market leaders in HP and Kenwood have done their clients a disservice. There are two real estate firms that control the single family inventory in those areas and you see the same names on all of the listings. It baffles me that people are willing to show their home for 2 years and wait for that once in a lifetime buyer.
It will interesting to see what the "Obama effect" is on the Kenwood housing market. Surely more buyers will take a look. My fear is that they will be disappointed if todays owners don't take the initiative to update their homes. My hope is that new buyers will enter the market and improve the homes so that the value is derived from investing in the property rather than counting on luck.
Keep watching the market. I have a feeling that market will see something wonderful things happening in the near future.
thank you for your response. I have always enjoyed your comments. However, this has happened for years- and not just in this down turn. I can site case after case. Another trick that influences the selling for "89%" of price is that many, and I do mean many of these homes started out years ago 4 and 5 at 200 and 300K more than the final list price and then the final sale price. This is not easily picked up since they take it off the market and then put it back on a month later as a new listing. Not all realtors will let you know that. This market does not follow "traditional real estate rules". Buyers need to be aware of that. Certain companies have reputations for notorious overpricing. It is madness.
I hope realtors and sellers and buyers will educate themselves and do their own research. An educated buyer, seller and realtor will help improve the housing market as a whole and get things moving again. Please, Buyers, don't rely on the common question from realtors in these area "... what do you think it is worth?". Ask the selling agent for comps and ask your agent for ALL comps and go by and look at the houses. Get your realtor to pull the data for you. Ask for it. Demand it! It is your money.
Do your homework so you do not over pay and do your homework so your house will actually SELL and do you homework as a realtor to TRUTHFULLY present the data.
All I ask is that people/sellers and buyers look at the property and see if you have a bathroom that is unusable and plumbing/ electrical, roof, furnace, kitchen, windows, painting, rotten porches and just plain weird things in houses and price it right. Buyers really care about this stuff. It is a new market. The banks aren't lending to banks. Lets help get things rolling by pricing homes right and get the buyers homes again.
Humm... 37% drop on average in home prices. One of the worst in stats. Don't over pay!! Look at taxes and that will give you an idea of truer value for price. Taxes are high in chicag- usually around 1.2 to 1.3 % on older home- almost 2% on newer home. THIS REALLY helps to figure out what a home is worth. Don't you think the tax man would get more if he could?
For starters, the city doesn't have tax records. Tax valuations are at the county level (Cook County).
Cook County tax valuations are a very poor index of value. They're not designed to, and don't reflect market values. They're adjusted every 3 years.
LOW BALL LOW BALL- LOOK at the city's tax records for what they think "Fair market value " should be.
That will give you a true unbiased basis of what the value should really be around.
Sorry if you are a realtor here and suffering Christopher, or anywhere else for that matter.
To Hahaâ€™s statement with regard to pricing â€œAgain, what do a few listings prove?â€ Iâ€™d argue that a few listings prove nothing and that all listings prove a price trend. We all know that statistics (and select listings) can be made to bolster any argument that weâ€™d like to make. The reality is that the average of all single family homes sold in both Hyde Park and Kenwood over the last year sold for 90.76% of their list price. Not dissimilar from other similar neighborhoods in Chicago.
While Haha and Name you may not see the value in the Hyde Park Kenwood market (at least as it is expressed in the prices of the available housing in these areas), many people do. While I may not see the value in the proximity to my neighbors in a neighborhood like Lincoln Park, many people do. I donâ€™t understand why The Hamptons are at the price point that they are relative to other ocean side communities on the rest of the East Coast, but the reality is the prices there are high (some would consider unreasonably so). But it should be obvious to all why a Hamptons seller would want to protect their currently established price points.
Buyers and sellers set market prices- no one else. Name states in the original question of the post that homes in the area â€œsell at 70-89% of list price.â€ If thatâ€™s correct and 70-89% of the list price is not palatable to you as a price for most of the properties in this market (although Iâ€™d argue that the higher discounts are only on the very highest price points in the market), then why torture yourself over the local sellers apparent disconnect with reality?
If you believe your assertions and the local market is not responding to your â€œlowâ€ offers, then maybe you should consider a different neighborhood that might be more receptive or responsive to your offers. If those homes are not as attractive to you as the homes in Hyde Park Kenwood, then maybe you should consider adjusting your offers on Hyde Park Kenwood properties upward slightly to secure the home that you most desire.
At the end of the day, the question of how much is a home worth to you is the key question here. Name- your original question suggests what Iâ€™d assume to be your answer to that question with regard to the pricing of Hyde Park Kenwood properties. In this particular market (particularly if you are not selling a property right now), you are in the midst of an incredible buyerâ€™s market. Good luck with your property search. There should be plenty of incredible buying opportunities to consider.
Broker Associate, Sudler Sotheby's International Realty
As a 19 year resident of Hyde Park Kenwood, youâ€™ll find no one as upset as me that I still cannot buy a pair of socks or thermal underwear in the neighborhood. On the amenities/restaurants/shopping questions, Lincoln Park has Hyde Park Kenwood blown out of the water without question.
When it comes to zoning, lot sizes, Historical significance/Vintage features, and to a lesser degree parking (more true in Kenwood than Hyde Park), then Hyde Park Kenwood wins handily.
You could not pay me enough to deal with the relative congestion of a Lincoln Park/Wrigleyville and the subsequently higher levels of activity (i.e. crowded sidewalks and streets, drunken revelry post Cubs games) relative to Hyde Park Kenwood. Obviously there are a huge number of people who disagree with my assessment and thus create a significant demand (and thus price increase over Hyde Park Kenwood) for properties in Lakeview, Lincoln Park and like neighborhoods.
For example Brownstone Development created a development of 6-7 homes on the East side of Drexel Avenue on the 4700 block a few years ago. The Drexel Avenue homes were all brick and priced starting at about 630K. On Addison Street the same company built the exact same homes at the same time except the Addison homes were frame instead of brick. The prices on the Addison Street homes started at 1.2 million.
Itâ€™s very unlikely that I would ever pay twice the price for the exact same property based on its location. I completely understand that one area can offer significantly more â€œvalueâ€ to some buyers over other areas due to amenities, perceived safety, school performance, etcetera.
By contrast I have a very positive price reaction to having a home on an RS-1 zoned lot with a minimum lot square footage of 6,250 as opposed a standard Chicago lots 3,125 (much more typical in Lincoln Park). Itâ€™s a lot easier to have privacy when your neighbors are twice as far away from you as on typical Chicago lots rather than when they are right next to you separated by a knee wall on your roof deck or a 6â€™ security fence on the ground (as is much more typical of some of the LP rowhomes that Haha mentions).
What one buyer values (i.e. Art Deco, Tudor, Miesian modern, privacy, secure parking, the ability to walk to many restaurants, etc.) might be completely irrelevant to another buyer. All buyers value properties very differently. Value (and thus price) is a relative proposition not an absolute.
This gets to the question of a home being worth â€œwhat someone will pay for it.â€ While Realtors probably too often lean on that concept with questions like â€œwhat do you think itâ€™s worth,â€ as long as that question is backed up by solid homework/research into area pricing- then there is no problem. Only absent the research and work to investigate whether or not a buyerâ€™s offer is made in an appropriate range, does this â€œwhat do you think itâ€™s worthâ€ question become problematic.
Many buyers in this range of price points tend to pay cash for their purchases (or at least pay cash for a significant portion of the purchase price). This is important for a few reasons. Assuming that a buyer puts down an 80% down payment of a million dollar purchase price then the buyer would only be taking out a loan for $200,000.00. In this scenario the bank assumes that if they would ever have to foreclose on the property and resell it, then the bank would only lose money if the million dollar property had devalued beyond their risk level of $200,000.00. Why would the bank not say yes to that loan?
There is much less risk to the bank in scenarios such as these and thus there is much less pressure on the appraisal. In the cases of all cash transactions rather than being an evaluation which could derail a loan in process the appraisal becomes simply a reference document for the buyer (or an evaluation which could potentially reopen a price negotiation). However when dealing with a cash transaction, it is often harder to counsel caution to a buyer and we all know what happens to fools and their money eventually. Everyone on this thread appears to be doing enough homework to avoid being uninformed about this particular market.
Broker Associate, Sudler Sotheby's International Realty
â€œThe market in Chicago has dropped 8% in December alone. Your realtor won't tell you that.â€
â€œOne trick too that I have discovered is "leaving out" properties that sold for much less in comps that should have been included. A nasty trick for the uninformed buyer.â€
â€œWhen are the realtors and homeowners in Hyde Park and Kenwood going to get real?â€
â€œWonder if the local realtor is worried if their carefully constructed house of cards is about to FALL!!!!â€
â€œStick to your guns and don't let your realtor (if they are local) to influence you.â€
â€œthe local realtors take advantage of "in coming fresh meat" AKA- out of towners from other parts like NY, Boston or others.â€
â€œdon't just listen to your realtor- especially if they are local.â€
â€œDo your research before and do NOT rely on your realtor - especially if they are local.â€
â€œI find honesty from a realtor refreshing!â€
Not all Realtors are â€œout to get you.â€ Not all Realtors who work in Hyde Park Kenwood are part of some vast conspiracy. Realtors are simply not that organized. It sounds to me as if youâ€™ve had a bad run in with either a specific Realtor (or set of Realtors) or a specific real estate brokerage. If that is the case, Iâ€™d ask that you limit your poor opinion of Realtors to those who youâ€™ve had bad interactions with. Reserve judgment on the rest of us.
For example if I am working with a buyer, why would I NOT tell them that prices have come down by 8% in one month? That would only strengthen their buying position and keep them interested in looking if they happened to be getting burned out by all of the currently available inventory. Itâ€™s both the ethical stance in addition to being smart business.
Iâ€™ve been working in this market my entire real estate career, and most of the local Realtors that I interact with on a regular basis are quite the opposite of your characterization. Realty brokerage is a referral based and relationship based business. It makes no sense to â€œburnâ€ a buyer by trying to price gouge them on a single transaction when you would want to have them use your services again and refer their friends and family to you. Iâ€™d suggest to you that you might want to interview some different Realtors (from the ones that you already know and dislike) if you ever find yourself wanting or needing the assistance of a Realtor (local or otherwise). You should be able to find someone more trustworthy than the folks that youâ€™re already familiar with.
Regarding pricing in Hyde Park Kenwood as in all markets I have a number of things to say. First and foremost- Realtors do not set prices. While Realtors may advise poorly and suggest higher than market prices, the prices of the home have to be agreed to by; the buyer, the seller and the bank or the appraiser. As much as Realtors might like to set their own prices, the ultimate price determination is not in our hands.
When discussing appropriate pricing for properties in the area Name stated that â€œTaxes are about 1-1.5% of what the city thinks they are worth.â€ While Iâ€™d generally agree that this is a useful shortcut to get some idea of the price range of a property, I would not rely too heavily on this valuation. There are too many other factors which affect this valuation to use it as a measure of the market value of a home. While the County is the determiner of the assessed value of homes- the County is not buying properties. Since that is the case, the Countyâ€™s evaluation is slightly irrelevant for the purposes of this discussion.
Broker Associate, Sudler Sotheby's International Realty
For example Realtor.com does not guarantee that its data will match the MLS data that updates it for 72 hours following the changes made to the MLS. Also Realtor.com is a subscription service- which not all Realtors or Realty Brokerages subscribe to. So itâ€™s very possible that listings that you see in the MLS (or other sources that get full data feeds from the MLS) will not show up at all on certain online services (i.e. Realtor.com), or the non-MLS online listings may not be updated on a regular basis (if at all).
On a related note, Haha makes some very good points about the overall â€œlevel of servicesâ€ provided by most Realtors (in this case primarily listing agents) working in this particular market. It is underwhelming at least and borderline negligent. My only answer to the â€œwhy donâ€™t sellers demand moreâ€ question is that they do not yet have a good idea about how poorly they are being served by most of the providers in this particular market. Monopolies tend to be inefficient AND deliver poor service. Local real estate monopolies follow this trend.
The South Side generally has been relegated to some place which connotes â€œall things wrong with urban environmentsâ€ in the minds of most non-South Side Chicagoans- if not outright ignored (especially by the realty brokerage community). This condition allowed very few (and in some cases some very poorly-performing) realty brokerages to dominate this market. The lack of competition did not serve the members of this community well (and does not to this day).
While the University of Chicago serves as a very important neighborhood anchor, most of the buyers for the higher price points that have been discussed here Iâ€™d argue do not necessarily come from the University. Iâ€™ll acknowledge that there are a few high-level University/College administrators that can afford the higher price points in the area. There are a few more University of Chicago Hospitals physicians, faculty and administrators that can afford the higher price points in the area than there are on the University/College side of the University. But generally speaking the University personnel cannot afford the highest price points in Hyde Park Kenwood.
So I have to disagree pretty strongly that out of town, or University types are being preyed upon to create a buyers market for Hyde Park Kenwood. The last three buyers that Iâ€™ve interacted with who were looking in this market were; a professor from Purdue University who was relocating from the East Coast (and eventually purchased in/near Irving Park), a commercial real estate developer, and a financial services professional who wanted to get their kids closer to the University of Chicago Lab School.
While Iâ€™ll acknowledge that these folks might have been slightly less familiar than I am with the neighborhood, I would in no way describe any of them as unsuspecting victims. These were all folks who had both significant ability and significant resources to conduct extensive research into this market, which they all did before purchasing.
Broker Associate, Sudler Sotheby's International Realty
If you purchased your home in the last 1970s for as little as 70K and it might be worth 1 million today, whatâ€™s the rush? If youâ€™re a seller who likes the neighborhood and has lived here for 20-40 years, then youâ€™re likely to just move to a smaller, more manageable place in the same neighborhood (i.e. Solstice on the Park buyers).
Since Solstice and properties like it might not be completed until years after they are put under contract to be purchased, there is no pressure on these sellers to reduce price significantly now. Until these new/replacement properties are nearing completion (and some may never get there given the overall market climate), then there will remain very little pressure on the sellers to be forced to perform on their purchase contracts. Without that increasing pressure (of the costs associated with maintaining two homes) on sellers, prices are not likely to move. And the longer it takes, the more likely the market is to recover and yield the sellers their desired price (even if unreasonably high).
The market times in Hyde Park Kenwood may be long, but if youâ€™re familiar with this market they should not be too surprising. Whether or not you think that sellers should want to sell faster than they appear to want to is a wholly different question and pretty inconsequential. If someone is being unreasonable, then drastic measures are the only things that can usually get them back in line (i.e. foreclosure). The sellers not the Realtors are the decision makers here.
To both Name and Chrystalâ€™s points about sellers updating their properties in all but a very few cases, I would advise my seller clients to do exactly what most Hyde Park Kenwood sellers are doing- nothing. Most buyers in these price points are used to getting pretty much exactly what they want. Given the number of new construction options available to buyers in these price points, most buyers would be able to customize their finishes/selections to some degree (if not completely) if they buy a new construction property.
And whether you agree with its valuation attached to it or not, the vintage charm and elements of many of these Hyde Park Kenwood homes are part of the appeal of both the homes and the neighborhood overall. Kenwood was not called the â€œLake Forest of the Southâ€ for no reason.
Since most sellers will not know what any particular buyer is looking for, why as a seller go through any significantly costly renovation only to see the work replaced as soon as new buyer decides that they want a matte finish instead of a glossy finish tile in the bathroom? And why eliminate the vintage enthusiast from your buyer pool (although they may be a more limited subset of the buyer pool) by replacing original elements with your own choices?
At the same time, I would tell my sellers that they should expect that buyers will adjust their offer price based on changes that the buyer would like to make to the property. Iâ€™m not blind to that reality, and Iâ€™ll make sure that my sellers are not either. But I donâ€™t think it makes much financial or marketing sense to have the sellers updating these homes to their tastes rather than having the buyers do the updating
4816 S. Kenwood (which Name references in the most recent post) is a good example of the type of property where the price adjustments for improvements make sense. However I must also say that in addition to the water damage in the basement of this home, the current owner/seller has made poor design/â€improvementâ€ decisions at every opportunity. 4816 S. Kenwood is a unique property based on its circumstances, but it is also somewhat representative of the Hyde Park Kenwood properties that might need close to total renovation.
Broker Associate, Sudler Sotheby's International Realty
There are a number of really interesting observations here, and Iâ€™d like to add a few. I know that Iâ€™m â€œlateâ€ to this thread, but Iâ€™ve only begun using Trulia as of late last November and I just stumbled across this discussion.
Iâ€™ll try to respond to specific points in the order that they were originally posted, and Iâ€™d like to make some general comments as well. This will require multiple posts, and Iâ€™ll apologize in advance for dominating the discussion (by the sheer number of posts) for a short time. For the purpose of full disclosure, I work in the same brokerage as Wayne Beals currently. For the last five years at my previous brokerage (which was also located in Hyde Park), I also worked with Wayne Beals.
To speak to one of Wayneâ€™s first (and I think overall) points that was offered in his first post, the Hyde Park Kenwood (hereafter abbreviated as HPKW) market is not significantly different from comparable markets with respect to â€œoverallâ€ list price/sold price ratios. While Hyde Park Kenwood may have more specific examples of homes that demonstrate larger than average price decreases upon sale, the overall market does not indicate any overall trend of being â€œhugely marked up.â€
Regarding some of Chrystalâ€™s comments, Iâ€™ve told my clients for years that real estate is about the emotions and expectations of the principals more than any other aspect of the transaction. As Realtors part of our charge should be to â€œprepareâ€ our clients by speaking clearly to their expectations (especially when our clients are entering a new/different/unfamiliar market). While we certainly cannot anticipate all of our clients needs and wants, we can usually paint a broad strokes picture of what they might expect in a given market (compared to markets that theyâ€™re familiar with).
While Chrystal describes the entire market between 1.2-1.7 million as â€œdisappointing,â€ that description leads me to think that there should be some remarkable opportunities to purchase a property at a â€œbelow marketâ€ or â€œdiscountedâ€ price in that case. I realize that Hyde Park Kenwood would typically does not have as many homes in that price point as some of the other neighborhoods being discussed, and Iâ€™d also assume that many of the homes in those other neighborhoods would be newer on average. Iâ€™m also going to assume that buyers who are attracted to the same neighborhoods and have very similar abilities to purchase would have somewhat similar expectations and reactions to the existing market.
If all of these buyers were similarly disappointed to the point of not making any offers on the properties in this price range in Hyde Park Kenwood, then the resulting inventory should be very open to whatever offers appear and more flexible on price. This is the type of scenario where it makes sense to throw in a â€œlow ball/below market/discountedâ€ offer to see if your buyer clients might be able to alleviate their disappointment with the joys of securing a property at such a low price that they might not have thought it possible.
Or better yet have your clients get a professional estimate from a licensed general contractor about the type of work that theyâ€™d like to have done and submit an offer that reflects a downward price adjustment commensurate with estimated improvements? Iâ€™ve worked with buyers whoâ€™ve been able to pick up a relative bargain because the paint in a home was so uniquely bad that it caused the house to show horribly. As a result the sellers took a lower offer than similar homes in the market were garnering. Take your shot and if the seller doesnâ€™t accept it, let them sit there. If they havenâ€™t had any offers within the next 12 months or so, the seller will probably be calling you to revisit your previously unacceptable offer.
Iâ€™d also be surprised to hear that places like the Mansions of Kenwood (approx. 6000 square foot new construction homes between Greenwood and Woodlawn on 49th Street which were priced between 1.8-2.2 million) would not take a serious look at an offer near 1.7 million. To Chrystal specifically have your clients taken a run at some of these homes (or even homes priced even higher but that have been sitting on the market for longer like the Potter Mansion at 4800 S. Ellis)?
Broker Associate, Sudler Sotheby's International Realty
I heard from a friend of mine who is also looking. He was looking at a home in the 60615 area. The house firs listed at 850 or so- huge home, too many bedrooms but some bedrooms you could not put a single bed in- but needs major work- The listing agent is an outside agent. The agent dropped the price to almost half based on what contractor after contractor said it would take to redo- and they are correct. But, the point is, this agent got a call from someone at a local agency (will not name the company), and fussed at them for "how dare you list any property so low"?.. " all houses stay on the market here at least a year". Oh no!!! A REAL REALTOR that prices houses based on the condition!!! HORROR!!!!
The realtor actually called this outside listing agent and fussed at this person for pricing the house too low.
Amazing. Wonder if the local realtor is worried if their carefully constructed house of cards is about to FALL!!!!
No lie. Anyway, the realtor priced it right- and if anything too high at that" low" number at that since it really will take that much money to fix it up and there are no shortcuts with that house. The people really botched it up BAD and then extensive water damage and everthing that comes with it.
And, yes, The university is freaking out and the firings began in Jan with top execs.. More to come. Cut backs have already taken place and I expect a second round soon. It will be a bumpy ride.
I am so glad someone else is beginning to "see the light"!! It was like this dumb heard mentality. For so much gray matter walking around HP and KW, very few people are actually using it. Amazing!
Thanks so much for writing back and best of luck. Oh, another thing- one good way to see what the house is really worth is to look up what the city values the market value at. It is a good tool. It would be bad to buy a house overpriced and then have the bubble finally pop here (which it will and has started too-) and for your house to be not worth what you paid and your stuck with the house with 300 grand of repairs to do and it not worth your mortgage. Ouch! Good Luck!! and Low ball- well, a low ball here would be asking what the house is really worth. Stick to your guns and don't let your realtor (if they are local) to influence you. Try to find an honest one- they do exist- well I finally found one- that will work with you and research the places for you and give you an honest opinion of prices.
YES, they. the local realtors take advantage of "in coming fresh meat" AKA- out of towners from other parts like NY, Boston or others.
They think the houses are "cheaper" but really they are getting the wool pulled over their eyes.
Don't fall for it and let your friends know /bankers/realtors and the like what is going on here. They have taken advantage of it for too long and I only hope people will get informed and stop getting ripped off.
Yes, the frame house is a complete joke- 3 bedrooms, no yard, no parking and everyone watches your every move. No privacy at all. Have you seen the inside? HA HA! Poor sucker that buys that. Location is one thing but I don't need everyone in HP to see what is going on in my house. You have no privacy- any condo is better than that one. Just turn the corner to woodlawn one block up and you can get for "full list price" a mere 500 more a home that stretches for almost a block- beautiful on the inside completely redone in BRICK. It is the size of three large home put together! with parking! Crazy pricing on these homes- there is no sense or logic.
Check out south loop or lincoln park - for same price you actually get something for your money!
For the 1.5 house that ended up selling for 1 even or the 1200000 that sold at 8000:
Ok, the mark ups are so drastic that some one offered 1st offering less than 1mil even on an original list price home of 1.5- redone. They offered less than a third of the list price and got it at 1/3 or original list price. This was one of the few this summer where they actually did a reasonable price drop. My point is that a person looking in the 800-1000000 price range would have never looked at the 1.5 house nor made an offer based on "normal" real estate pricing (95-99% of list).
Yes, what they would consider low offers have been made and they were shocked of course but I don't care. It is my money right? The homes did not sale, was pulled from market or dropped the price or all three. But what it did do was some homes lowered their price and that has been a new setting price point for things on the market. So yes, we are "homeless" but things are changing all because I did research, made offers and eventually it made an impact. It is like moving the titanic granted.
Yes, it works. It has made an impact. A "No offer" on a home in this neighborhood does not send a message. Giving an offer, truly based on research, what they paid for it, tax value (what the city thinks market is worth- check out Mayor Daleys comments on this prior to the bust about the overpricing of homes in chicago)) and condition- does it have a yard, parking, redone or do you have to fix their deferred maintenance issues- roof, plumbing, kitchen, bathrooms, porch, hot tub in bedroom- no not your spa you dream of but 1970's hot tub complete with mismatched tile. If the house has exposed "spaghetti wiring" "called "Phd" wiring by the realtor( house owed by a Phd I suppose), don't pay a stupid price for it. Ask an appropriate price for condition of the property. Be informed. Be educated and be smart. It is your money.
Go to Jameson.com and do a search ( I think you have to log in but the tool they have is worth it), do a search for single family homes and town homes for Lincoln park, gold coast, loop kenwood and hyde park. Compare side by side of that they (HP and Kenwood) have and what the others have and condition of property and price.
I am not saying be obnoxious, (well, anything below asking price to some is obnoxious) but do your RESEARCH- Rubloff.com has a list of sold properties - the list is not complete as I found some omissions for whatever reason but it is a good start. It goes back several years.
Be an informed, educated buyer - don't just listen to your realtor- especially if they are local. You also need to check out the liens on properties. Check out cook county clerk and assessors. I forget which one you have to go to first to get parcel number but is is some good data to make informed, educated decision.
Some people have used their house as an ATM- honest!! I have been shocked at the " withdrawals and the unbelievable amount taken out"- That is also part of why some house, though not worth it, refuse to budge on price. Foreclosures have also hit Kenwood and Hyde Park. too, ust as the rest of the world and it is not just the "bad sections". Some of the most beautiful homes are in foreclosure or pre foreclosure. It is really sad.
Yes, many people have equity (real equity- paid off portion of loan) here but this is not the only neighborhood in the world that has real equity. A price adjustment is necessary to get things moving. Bottom line: don't over pay regardless of what your friend who just bought two years ago says. Misery loves company. Best of luck! Be smart and happy house hunting!
I think 1/2 off listing prices is a bit much. My guess is homes are actually worth about 60-70% of - original - listing price. And some actually seem to sell at that discount after ages on the market and relistings/price reductions (just heard a newer townhome is under contract for what these homes sold for in 2001-2003!!! Yeahh!! Of course, that is one of the few listings that actually reduced the price on a regular basis, unfortunately chasing the market down - they would have gotten more than that last spring; most don't).
I am now laughing at a lot of the listings - such as a million dollar old frame home without parking and with little yardspace across from a school, more than it might be listed for in LP, rowhomes without parking originally listed for 30% more than purchase price in 2005 and at prices where you can get a slightly smaller rowhome in the Gold Coast with a garage and small yard or roof top deck etc.
Have you made lowballs? What was the seller's agent reaction? And what makes you think that the local real estate agents are getting panicked?
Wayne, I am also interested in more on your perspective as an agent in the area. Why is the market so different (IMO not in a good way) from LP/Gold Coast?
So, 9000 in taxes on a house, probably really worth somewhere in the 600 range depending. This is a good rule of thumb. DO NOT OVER PAY for a house in bad condition, no yard, no parking. The market is changed and until more people start offering what the house is worth, things will not change. Do your research before and do NOT rely on your realtor - especially if they are local. Ask whatever you want. If the house in disrepair, ask a price accordingly. This technique actually works. If there are no offers, then they can explain it away to the seller. If there are low offers, it sends a message. Ask a price based on what it will take to redo or undo the mess or lack of maintenance they have done/not done. I am not saying be unreasonable, but really look and compare homes and what it would take to get it up to standard.
The University is also in complete a hiring freeze and layoffs which I hope will make an impact on this overpricing game that has been going on.
The market in Chicago has dropped 8% in December alone. Your realtor won't tell you that.
Watch out for your comps too! Get a comprehensive list of ALL properties sold.
Does the whole thing smell a little funny?
And yes, I have noticed that the houses on average (not all) are in terrible shape - outdated, in need of major renovation etc. And the list prices clearly do not reflect the need for work.
Oh, when you check out prior sold prices, list prices still ask for 10-15% appreciation or so per year, even over the last few years. I can't figure out why (crime is still a factor in HP/Kenwood, and services leave much to be desired - not much has changed) . We have been so frustrated with the situation that we have started looking elsewhere: For SFH, Lincoln Park has almost as much to offer as HP/Kenwood, perhaps slightly smaller homes, but in much better shape for similar list prices. Plus, less crime, more shopping, restaurants etc. And while you get glossy home ads with pictures, floor plans, home history when viewing a house in LP or the North Shore, in HP, you get ...nothing. That same firm also rarely offers multiple pictures on its own website, house tours/vht tours (standard in other communities at these listing prices) are almost unheard of.. Why don't sellers/buyers ask for more services? .I am also PUZZLED by what is going on here. WHY???
We keep being told that the market is different here, because of the university, and that faculty are less sensitive to house prices and loan availability because the university provides loans (though now that the university likely has to cut costs due to the market, perhaps that will change). Are the firms taking advantage of incoming faculty/administrators who don't know the neighborhood/comps? To me, that would be the only logical explanation. But then, why would homes sit on the market forever? Perhaps agents encourage home owners to wait for that elusive, clueless out of town buyer? But wouldn't faculty expect basic updates/repairs to have been done?
It is NUTS what is going on and more people/REALTORS/BUYERS/Bankers need to be aware of this so the pressure is put on sellers to upgrade to a very basic level and stop with the deferred maintenance and asking stupid prices for homes or reduce price to adjust for the deferred maintenance.
Also, one thing I have noticed over the last few months when home prices all over the nation are crashing is why would a major firm in the area price a house ( I have multiple examples of this happening over several months so it is not just "a timing factor in updating the MLS and subordinate websites) in a local paper at one price (lower) and not reflect it in the MLS or on realtor.com? (yes, they have been called on it but they have some flimsy excuse but continue) I have noticed with this firm, their policy is to not reduce prices at all. Why are they shrouding the new lower price in only a local paper? Is this "legal" or right to have multiple prices on a home? I have multiple examples of this. All of these homes appear on MLS/Realtor.com at one price but in local paper, (only seen by a few eyes) do the prices reflect reductions.
One was 649 but appears in paper at 639 another is listed at 579 and in another place at 589, another was 899 and now is 799 (in paper) but does not appear elsewhere in realtor.com. Is this right to have 2 or 3 prices for a property? - same firm
It would be nice to get back to realistic prices for the condition of the home.
I like and appreciate the fact that Chrystal brought up President Elect Obama as his status in Hyde Park has brought a tourist attraction to the area. Let's take it a step further and say that Barack Obama makes an appearance in Copenhagen, Denmark on December 4th 2009 as the final presentator of Chicago's 2016 Olympic bid. If Chicago wins, Kenwood and Hyde Park may be one of several Chicago neighborhoods to benefit from an upgrade of urban infrastructure and rejuvenation. I would hope that the prices reflect true market value as we approach this time because their has generally been a markup in prices if Chicago does win as a host city.
Since the second quarter of 2005, London housing prices have increased 15%. http://www.hbosplc.com/media/pressreleases/articles/halifax/
It would be great to see a rise and rejuvenation of these neighborhoods with realistic housing prices for both sellers and buyers.
I understand your comment about "market forces that don't exist elsewhere" , and perhaps in the past, maybe they (sellers, banks, buyers and realtors) could get away with what I consider tantamount to price gouging (for the condition of the home), but ,in this new post crash-global credit -crunch-no cash-banks aren't lending to banks- economy that we are living in everyone needs to get a grip. The reason this crisis will affect this community is because it is GLOBAL. People coming from other parts of the country and from the north side just can't get the money they used to get. For most homes in this area, the condition is unlike any other place- and I do not mean in a good way. I don't mind paying money and getting something for it but it is quite different to loose money on your house that you have to sale, then come to this neighborhood and have to pump in hundreds of thousands of dollars just to get it up to a basic living standard- (I am talking about a home depot kitchen on a budget - not gourmet drop dead kitchen.) I think banks, appraisers, lenders and buyers will not tolerate what they have in the past. That is at least what other buyers I have talked to have stated. Price it right and it will sale. There is a strong market here but if you do not price it right for the condition of the house, it will sit until it rots. You can still talk about location, but there are homes on the market that will never sale or appreciate in value- and yes they are in the golden rectangle and not a condo/townhome, so it is really about location? . Oh, and the price mark up has been going on for the 3 years that I have been watching the market and I suspect longer. Keep and eye on it. One trick too that I have discovered is "leaving out" properties that sold for much less in comps that should have been included. A nasty trick for the uninformed buyer. Home values have not increased in the last year. I hope the monopoly realtors will wise up for the spring season. People everywhere all walks of life are feeling less "spendy" Yes, Obama lives here, but I don't see him giving out money on his doorstep to buyers. Thanks again for the feedback! I find honesty from a realtor refreshing! I look forward to more of your commentary!
Perhaps a lot of the reason behind this can be attributed to the fact that many of the properties on the market currently were listed and priced with comparables that were higher from an earlier period. Recent closings indicate the need for prices reductions and initiate lower buyer offers (buyers usually check the comparables before making an offer).
Over the last six months, Hyde Park and Kenwood have averaged exactly 89.74% of list price for closed single family homes.
Compare this to Lincoln Park which has averaged exactly 93.18% of list price for the same period.
Over the past three months, all lakefront communities from Rogers Park to East Chicago have averaged 91.56 % of list price at sale.
I do agree that list price versus sale price in Hyde Park and Kenwood has a larger gap than average, but it is not as much as you would believe from the examples that you have seen.
I have worked in Hyde Park and Kenwood for the past five years. Sellers traditionally don't price their properties with these ratios in mind. They are hopeful for "top dollar," regardless of market conditions and what "top dollar" is. As far as I can tell, these ratios show that sellers in Hyde Park and Kenwood have become more negotiable in regards to offers.
This would be a GREAT time to buy your dream home in Hyde Park and Kenwood, given the data. Find the home you want, check the comparables, and make an offer.
Best of Luck and, as always, contact me for further assistance.