Thomas Hall

Brock - I wish pricing and selling homes were that easy - it sure would be better for me so that I know if can cover my BMW payment - ahem - THAT being said, while there is no sure-fire guarantee on the specific timing, there is an on-going process that needs to be constantly monitored - changes in the ACTIVE, CONTINGENT, PENDING and CLOSED sales of like properties as well as the economic conditions of the area. In order to meet my clients' expectations regarding a successful sale, their price needs to be in line with market conditions as long as their property remains on the market.

A market can change dramatically over a 5 month period. While I can provide comparable sales of similar properties over a 6 month period to best determine the probability of how long a property will take to sell, conditions could change, i.e. a major employer in the local area could announce significant layoffs, mortgage lenders could change lending standards for buyers with less than 10% downpaments, four homes with similar features in the neighborhood may have just gone into foreclosure - AFTER I had completed my initial market analysis, etc.

All of these conditions have an impact on both timing and sales price, PLUS add in my clients' motivation to sell. For example, in light of market conditions changing, my client may only have 90 days of relocation benefits before he/she may be responsible for their own moving expenses - and their property which was priced in line with the market before the market changed, has now been on the market of 47 days without an offer - they don't want to pay moving expenses out of pocket and may want to get their home sold NOW.

While I agree that intelligent realtors do their market research - continuously monitoring market conditions, staying the course may very well be the worst course of action for their client.

Just some food for thought... - Sat May 3 2008, 16:08

Hi Kevin - in terms of "as-is" - the seller may be implying that he/she is transferring the property with potential building code violations. If violations exist, it is very possible that the city did have building inspectors inspect the building/property - it could be a relatively minor issue(s), readily addressable, such as a lack of carbon monoxide dectors to a significant problem with a rear porch that does not meet current city building codes.

This could be a problem with the city. You do not want to inherit potential building violations which may be subject to citations, fines and the possibility of the city condeming and taking adverse possession. In addition, with existing violations, you will be hard pressed to obtain a reasonable insurance policy on the building.

I suggest doing a property search on the Cook County Recorder of Deeds website. Do a property search via the property's PIN. You can determine if the building has potentially been cited if you see a Lis Pendens - essentially a clue that there is pending legal action that has been recorded on the title. In order to transfer title, the pending legal issue must be resolved. In many cases, this may be a record of a citation in the form of a building violation.

To see the specific documents which have been recorded, you can order the documents for download from the CCRD's website for 50 cents a page.

This may be a way for you to insure that the city hasn't cited the current owner - it should hopefully save you time and future headaches as well.

Best of luck! - Thu Apr 24 2008, 15:14

Hi Zack - I am not implying that Chicago is or has been immune from the housing crisis. As I stated in an earlier post on this thread - to determine whether or not to buy in this market should be based on your understanding of your individual risk tolerance, knowledge of your specific market and investment time horizon.

In general, however, I think Chicago's a pretty good bet. There are areas in the country that may not have the ability to absorb the market dynamics like Chicago.

If you are an inexperienced investor looking to make a killing by buying low and selling high, I sense you may make poor decisions regarding the right property to buy. Every person has different motivations regarding where and how to invest.

If you are looking to make a long term commitment to an area with the intent to stay, there is no reason not to be looking for opportunities. - Wed Apr 23 2008, 11:44

More reasons to buy in Chicago - Freddie Mae's current lending guideline still recognizes Cook County - the City of Chicago and surrounding suburbs as a stable market.

Chicago is also a major convention destination. The city's main convention center is McCormick Place . With its four interconnected buildings, it is the third largest convention center in the world. Chicago also ranks third in the U.S. (behind Las Vegas and Orlando ) in number of conventions hosted annually.[40] In addition, Chicago is home to eleven Fortune 500 companies, while the metropolitan area hosts an additional 21 Fortune 500 companies.[41] The state of Illinois is home to 66 Fortune 1000 companies.[42] Chicago also hosts 12 Fortune Global 500 companies and 17 Financial Times 500 companies. The city claims one Dow 30 company as well as aerospace giant Boeing , which moved its headquarters from Seattle to the Chicago Loop in 2001. - Wed Apr 23 2008, 11:20

Had to share this - received from a colleague - perhaps why you shoud buy in Chicago:
Chicago has the third largest gross metropolitan product in the nation — approximately $ 442 billion according to 2007 estimates.[32] The city has also been rated as having the most balanced economy in the United States, due to its high level of diversification.[33] Chicago was named the fourth most important business center in the world in the MasterCard Worldwide Centers of Commerce Index.[34] Additionally, the Chicago metropolitan area recorded the greatest number of new or expanded corporate facilities in the United States for six of the past seven years.[35] In 2006, Chicago placed 10th on the UBS list of the world's richest cities.[36]

Chicago is a major financial center with the second largest central business district in the U.S. The city is the headquarters of the Federal Reserve Bank of Chicago (the Seventh District of the Federal Reserve). The city is also home to three major financial and futures exchanges , including the Chicago Stock Exchange , the Chicago Board Options Exchange (CBOE), and the Chicago Mercantile Exchange (the "Merc"), which includes the former Chicago Board of Trade (CBOT). Perhaps due to the influence of the Chicago school of economics , the city also has markets trading unusual contracts such as emissions (on the Chicago Climate Exchange ) and equity style indices (on the US Futures Exchange ).

In addition to the exchanges, Chicago and the surrounding areas house many major brokerage firms and insurance companies, such as Allstate and Zurich North America. The city and its surrounding metropolitan area are home to the second largest labor pool in the United States with approximately 4.25 million workers.[37] Chicago has the largest high-technology and information-technology industry employment in the United States.[38]

Manufacturing, printing , publishing , and food processing also play major roles in the city's economy. Several medical products and services companies are headquartered in the Chicago area, including Baxter International , Abbott Laboratories , and the Healthcare Financial Services division of General Electric . Moreover, the construction of the Illinois and Michigan Canal , which helped move goods from the Great Lakes south on the Mississippi River , and of the railroads in the 19th century made the city a major transportation center in the United States. In the 1840s, Chicago became a major grain port, and in the 1850s and 1860s Chicago's pork and beef industry expanded. As the major meat companies grew in Chicago many, such as Armour and Company , created global enterprises. Though the meatpacking industry currently plays a lesser role in the city's economy,Chicago continues to be a major transportation and distribution center. Early in the 20th Century, Chicago was part of the automobile revolution, hosting the brass era car builder Bugmobile , which was founded there in 1907.[39] - Wed Apr 23 2008, 11:15

Real estate as an investment - whether it is owner occupied or held for income/appreciation - needs to viewed as long-term. Forgive me for stating the obvious, however, I believe home owners have been lulled into believing that their homes are entitled to 10%+ appreciation year over year (some cases month over month) due to the past decade of truly unprecedented growth in values. In terms of the home my parents bought in 1984 in Dallas - during the tail end of 12% to 15% mortgage rates, granted they weren't in a recession, however, the country was coming out of one with record high interest rates, homes couldn't be built fast enough for housing demand - crazy market conditions existed and people bought regardless of rates. Today - my parent's home has experienced modest appreciation - after almost 25 years, they may make 10% to 15% more than what they paid for it in 1984. (Had they sold in 1987 to 1988, they would have lost their shirts - more than 25% of the homes on their block were in foreclosure.) Did that stop them from buying? No - their intent was to settle in Dallas and ideally remain in their home because they loved the neighborhood, the proximity to transportation, shopping, airport etc. My point is - this isn't the first time we've dealt with less than ideal market conditions - regardless, there are buyers and sellers in every market.

Should you buy? How risk adverse are you? I think the answer depends upon what you are buying and where. If you view real estate as simply another asset class, the evaluation could be as simple as evaluating a stock. The stock market has been up and down - when is it a good time to enter the stock market? How do you choose the RIGHT stock? What are the fundamentals to choosing stocks?

There are fundamentals to choosing a good real estate investment. To Patrick's point, real estate is not a commodity - location and scarcity are key to determining value. The facts more than substantiate the existence of high inventories - but some properties will continue to maintain value due to their scarcity. Unobstructed lake and park views are relatively limited - I believe their values will remain relatively stable. Many homes in great locations will continue to hold value.

In terms of income property, I believe that investment property, ie multi-families will FINALLY begin to be priced and sell based on the fundamentals - their net income. Many buildings' values were priced beyond their value as income producers due to condo conversion / speculation. Clearly this has come to a dramatic halt.

I have a number of clients who are on both sides of the fence. Interestingly enough, my experienced investors - clients who are seeking income property for long term hold are extremely active in this market.

Some say flip a coin - I say understand the fundamentals, know your level of risk aversion and do your homework. - Thu Apr 17 2008, 12:57

Don - what's driving your decision to sell? I think this is a great market for people who may be interested in trading up. If you are looking for more space, a better location etc, you may be in a great position to both leverage lower borrowing costs as well as generally more competitive prices on property. Inventories are still high which could impact the sale of your existing property - you may not be able to win at both ends, however.

Another factor to consider is how long have your owned your current property? If you purchased within the last 5 to 8 years - I suspect you still may do fine. Depending upon the type of property you own and where it is located in Logan Square, you could do just fine.

Properties are clearly selling - from experience, however, buyers are aggressive.

I hope that helps - best of luck in your decision! - Tue Apr 15 2008, 19:13

Hi Jason - I think you hit the nail on the head - often times you'll find garden units that are great values relative to other similar units in number of bedrooms etc that are above grade. While garden units may be less desirable due to the lack of light, they may allow you to live in a more expensive neighborhood for a more affordable price.

My suggestion to my clients is - if your heart is set on living in a specific neighborhood and a garden unit is the only affordable alternative, then buy the garden unit. Consider a garden if it meets your needs in terms of space, finishes etc and it is the only alternative to living in a neighborhood you simply have to live in but couldn't afford otherwise, ie getting what you want in the neighborhood you want. In terms of resale, understand that other potential buyers may have similar needs to your's when you made the decision to purchase. While the buyer pool may be smaller, if priced well, a future buyer will see the value - it just may take more time to find the right buyer.

Best of luck! - Tue Apr 15 2008, 19:03