Price Changes Continue to Drive the Market

In the first week of the Fall 2009 real estate market 26% of the homes currently listed for sale in the United States had price reductions according to Trulia. This is the fourth month in a row that there has been an increase of price reductions taken. Locally, Chicago's active listings saw an average price decrease of .4% last week. List prices are down overall 18.5 % compared to last year.

With sellers aggressive sending out the message they want to sell by lowering prices buyers have been re-engaging in the market place. Many Realtors®are getting more showings on the listings resulting in multiple offers in some cases. With the decreases in the price of market rate properties, many buyers are opting not to go after distressed properties to avoid issues that can arise in short sale and foreclosure transactions such as undetermined closing dates and the cost of fixing up the properties.

Some sellers are opting to remove their homes from the market rather than sell at a further reduced price. The question remains as to how long will they have to wait it out. A few who have to move are trying to rent their homes in an over saturated rental market. Rental pricing is not always meeting the monthly expenses on the properties.

If the property is priced more than that local market can bear it still won't sell even with the price reductions. When putting together offers, buyers and their agents are basing it all on the last three closed comps in the last 90 days.

To follow Chicago Area Listing Inventory and keep up to date on new listings and price changes click here

My Observations on the Last 30 Days as a Realtor® in United States

As I have time to reflect as we go into this holiday weekend,
I think back to all that happened in the month of June.

My Personal Market Activity: Buyers re-engaged in the marketplace resulting in sold properties. Sellers who want to sell are listing at prices to sell not just to list. Communication between the Realtors, lenders, buyers, sellers and attorneys is key in keeping the deals together and getting them closed.

I have received negative comments responding to my positive outlook on the market, the first signs we are seeing of stabilization from the numbers that are being published. I have run into agents I know amazed when I say I am busy. They are thinking of getting out of the business. I am not “wearing rose colored glasses” as commented on one of my blog postings. Rather than walk away in frustration, I decided I have to continually educate myself to the dynamics of the ever changing market. Learn from my most current experiences. Most importantly, work to solve the problems that arise from each of the challenges that come with every transaction.

Americans deserve the opportunity to achieve and sustain the American Dream of homeownership. It is still recognized as one of their most important assets. I am a Realtor®. This is what I do.

Happy Birthday America!

Buy or Rent? Buying is Starting to Make Financial Sense Again

Originally Posted on Chicago's Real Estate Blog, The Chicago 77, June 29 2009

This week’s Crain’s Chicago Business (PDF) is reporting that the relative cost of owning vs. renting is swinging back in favor of home ownership across the U.S. and in Chicago. The Chicago real estate market is already seeing signs of this with an increase in pending home sales. There are great expectations that June’s sales numbers will finish off what should be a strong second quarter. Realtors® see this trend continuing as many of their buyers have reengaged and are actively looking at properties and going forward with offers. Tire kickers have become purchasers. As sellers have been adjusting their prices, buyers have making repositioning themselves regarding financing. Borrowers are expanding their lending options, taking advantage of the $8000 tax credit and creating greater equity in their purchase with larger down payments.

Disappointment Creates Opportunity

Roosevelt Collection, a 342 unit new construction condo building in Chicago’s South Loop is now going to be rental apartments according to this week’s Crain’s Chicago. Many new construction buildings sold as condominiums are ultimately ending up as rentals.

There is always a positive out of a negative.

The purchasers who entered into contracts on these units at the height of the market should look at this as opportunity. They now can take advantage of today’s prices and inventory. Currently on the market buyers can get new or almost new units and take advantage of historically low interest rates especially in neighborhoods like the South Loop and West Loop where the inventory is plentiful and full of brand new buildings with empty units.

To view Chicago's listings click here.

What Constitutes an Expert in Social Networking?

What math class did they teach "loyalty" + dollars = “experts”?

We are becoming so dependent on these sites for our “expert” advice. Is one an expert because they pay to play? How do we qualify those who we are taking advice from? When did an expert become a paid advertisement? Social networking had become the means in which we get ourselves out there. It is our new means of exposure and with any advertising there is cost involved. But when did our expertise become based on how much we pay or in this case, how much our company spent over the years.

When doing my evening round of “social networking”, I saw a posting that appeared to go out to the entire local Realtor® association calling for members to apply to be one of their “experts” on their new real estate social networking site based on shared knowledge of “experts” with hefty fees involved for the those who participated. As a big social networker who has been successful converting leads from this medium, I looked at the qualifications they were seeking, and thought I might have a chance to be part of this new venture.

Thinking I had a great resume, I applied. After all, I have been an active Realtor® in the area for a decade participating in hundreds of transactions myself representing buyers and sellers in new development and the secondary market as well as short sales. I also had the benefit of gaining knowledge from others in an agent support capacity in my company. Reporters call me and I have been published and posted internationally regarding real estate. Unpaid publications called me the “expert”.

For almost my entire real estate career, I have served the Realtor® community volunteering thousands of hours of my time for the Realtor® Association (the same one he had addressed the posting to) at the local, state and national level as an advocate on behalf of the real estate community and home owners. My years of association participation afforded me the opportunity to canvas the entire city. I received the President’s Community Service award, one of only a few. I have also been greatly involved in my local chamber of commerce in the same capacity.

I went to the online application, filled it out and inquired how long the process was to find out if I was accepted or not. The response was I am not currently being considered because he will only “reward loyalty” at this point. They are only accepting real estate agents as “experts” whose companies have done business with a company the creator of this site has.

In the posting to an association with over 13,000 members it did not specify that if the company you are with did not spend money with him, you need not apply.

This morning I attended the Chicagoland Chamber of Commerce’s Business Leaders Breakfast. The panel discussion was the “Art of Negotiation” featuring Cliff Stein, Senior Director of Football Administration & General Counsel of the Chicago Bears and Dave Hanna, President of the Chicago Association of Realtors. Both are agents with fiduciary duties their client. Although one negotiates contracts for football players and the other for real estate, the message was the same. It is the skill that comes from experience and preparation resulting in a successful negotiation.
Both men articulated the same course of action in their own way. Stein’s process was identifying the parties, the goals, the rules of engagement, preparation and the how to structure the plan. Hanna said it this way: Identify the client, the goal, the process, expectations and the negotiating strategy.
What I walked away with was as an agent for my clients, I am an advocate. My advocacy comes from the skills I have learned through my experiences in the many transactions I have participated in, what I have learned from others in the Realtor© community and putting that game plan in place for each client I represent.

Chasing the Market: Buyers

Potential buyers are chasing the market right now and never going to make it to the finish line.
With interest rates at historically low levels as well as plenty of inventory of new construction with incentives and resales at great prices, the buyers are going to miss the opportunities if they don't go forward and get contracts negotiated.
You never know its the bottom until it starts to go up again. Now is the time to move forward. By setting back and waiting for the next great bargain, purchasers are missing the most favorable market conditions in decades.
You cannot take advantage of the rates unless you have an executed contract on a property. Ultimately, the property is going to be your home so the first and foremost item to pay attention to is does the space work for you, not what is the seller's situation, how many price changes has the property had or how long has it been on the market. Those are all secondary. Identify the property and then we can talk about those things.
So many buyers out there are looking for a short sale or pre-foreclosure. It works for some but not for others. They are typically coming in at 15%-18% of market value. A short sale is sold "as is". If the seller strips the place which is becoming more commonplace, you are still contractual obligated to close on the property. If you have to put 10%-20% of the value of the property back into it, where is the bargain?
As many sellers have come to terms with market conditions, there are so many homes in pristine condition or brand new development units priced to sell!
This is the time to move!

Aligning Myself with Success

HOT PROPERTY® is an innovation in the real estate industry led by Chaz Walters. The HOT PROPERTY® brand has been marketed since the 1990s. It stands for success, action and willingness to go the extra mile for in servicing clients. This unique boutique residential real estate concept is a step ahead of the industry providing marketing from cutting edge interactive exposure to targeted print opportunities.Hot Property® fosters a people driven philosophy and facilitates a culture of working closely with clients to buy and sell real estate and surpass client's expectations.

To continuing bring my clients the best in the sales and marketing of their homes, I am pleased to be continuing this ongoing relationship with Chaz Walters and HOT PROPERTY®

For expertise in the sales and marketing of your home or the search for your new one, contact:
Andrea Geller
HOT PROPERTY® - Sudler Sotheby's International Realty
andrea@andreageller.com
http://www.hotpropertychicago.com/