It's the beginning of October and, generally speaking, mid-September marks the fall real estate market here in the Chicago area. Overall, there have been some differences in the market this year from years past. Most notably, there has definitely been a slowdown.
Homes are still selling. Prices are still holding. The sales cycle is simply taking longer than it has in years past.
And we definitely have seen some corrections to pricing.
Thankfully the pricing corrections have been livable at this point. Of course, why wouldn't they be given the extreme, (ok, OUTRAGEOUS), levels of appreciation over the last few years. That was so far from sustainable long term. The gentle landing does seem as if it is occurring and sellers are having to back off their prices and, in some cases, offer incentives.
If that trend continues, it may cause more desperation than anything else. Desperation selling could definitely have a negative impact on the market.
Of course, there is the quantifiable data for our area that was compiled by the Seventh District of the Federal Reserve, (that is our Midwestern area).
Here is a letter from July of 2005 that illustrates some very interesting indicies, graphs and economic ratios regarding housing prices.
http://www.chicagofed.org/publications/fedletter/cfljuly2005_216.pdf#search=
It is a very interesting read.
In my own business, things aren't so bad. My pipeline is good. I have 4 very strong listings and and am building my business pretty consistently.
Let's hope things stay healthy for all of us who sell or own a home.
Monday, October 02, 2006
Friday, July 14, 2006
Long absence
I have had a bit of an absence since my last entry. Summer is here and lots of stuff is going on.
The market has been a fickle place for everyone I have spoken to. Suddenly, things aren't exactly as they seem or exactly as they were.
For one thing, the economy is changing not for the reasons everyone thinks, or wants to think about.
Everything was popping along fine. We all expected a bit of a hiccup, but no one has expected the uncertainly and military escalation that is happening in the Middle East. It is looking like the beginning of something big. . .REALLY BIG. And REALLY SCARY.
Of course, we all still need a place to live right?
I'm still faithful to the trade.
I just need to get this blog to pop a bit more. It needs more sass!
I'm going to try and get in here more often and keep it up.
Rick
The market has been a fickle place for everyone I have spoken to. Suddenly, things aren't exactly as they seem or exactly as they were.
For one thing, the economy is changing not for the reasons everyone thinks, or wants to think about.
Everything was popping along fine. We all expected a bit of a hiccup, but no one has expected the uncertainly and military escalation that is happening in the Middle East. It is looking like the beginning of something big. . .REALLY BIG. And REALLY SCARY.
Of course, we all still need a place to live right?
I'm still faithful to the trade.
I just need to get this blog to pop a bit more. It needs more sass!
I'm going to try and get in here more often and keep it up.
Rick
Monday, April 03, 2006
Changes to the Market
So Spring has sprung but where is the rush to real estate?
Here in the Chicago area, that's a really good question. The state of affairs is a bit puzzling to everyone out there. It is like everyone is at a standoff when it comes to what to do.
My analysis of things is similar, I'm sure, to a lot of brokers out there in the marketplace.
Interest rates are still on the rise, but interestingly enough, it is the short term rates that seem to be impacted more. I've been told that, the artificially low rates are based on changes within the bond market. One theory, (and a fairly reasonable and reputable one at that), makes the assertion that when the Federal Reserve raises rates, a flood of foreign money, (presumably Chinese held dollars that, because of our trade deficit/surplus, the Chinese are reinvesting in the stable, conservative yield, US bond market), comes in and actually keeps rates the same or can actually push them down. The Fed has raised rates and unprecedented 15 times which has never happened in US history. Economics on a global scale have not worked the way, I'm sure, many people may have imagined. As a result, we are actually making history here. Interest rates in the States are being affected and influenced by foreign markets quickly and directly and in ways no one may have perceived.
This has spelled good news in the US housing market for awhile now but it definitely appears that the boom in home equity lines of credit, (which generally have adjustable rates and can, under the present circumstances, fluctuate wildly), as well as ARM, (adjustable rate mortgages), and Interest Only mortgages, is over. People are moving to more conservative, fixed rate products to maintain some stability during some unpredictable times.
Still, 30 year fixed rate mortgages continue to hover in the mid 6% range which is STILL excellent.
Now let's turn our eye to the housing market.
While I don't see a bubble, I am definitely seeing a slow down. I am attributing this phenomenon to a number of things.
With rising rates, the number of people who can actually afford to purchase is going down.
People are now being more choosy about what they buy. Although everyone realizes that purchasing a home is a big decision to begin with, I think they also realize that if the upward trend in rates continues, it may be awhile before they move up to their next home. I think more people are looking at purchasing long term and staying put a minnimum of 5-10 years.
Also, I am seeing a lot of buyers in the 20 something to early 30 something category and they have different expectations. Many of these buyers are young professionals who do not want to concern themselves with earning any "sweat equity" they spend a lot of time at work and at play and don't want to compromise their lifestyles. Thusly, they expect that any home they purchase, (be it single family, condo, etc), be in tip top shape and updated to reflect the expectations of the millenium home.
Where do I go? This factor is huge for sellers. Many sellers are faced with the dilemma of having a lot of equity in their home, but moving up to that next home, (larger home, better location, etc), can actually cost them way more. Thus, many sellers are concerned about what to do or where they will go after the sale of their homes. Because of this, many sellers are content to hold out for their ideal asking price. There is simply less motivation to sell.
So the market has come to a standoff, as opposed to a standstill.
Buyers are either looking for value and are taking their time to make the perfect choice, or if they are inclined to pay a premium for a home, they expect it to be in tip top, spot on, shape.
Seller's, unless under financial duress or pressed into selling for other circumstances, (ie, divorce, job transfer, etc), are inclined to hunker down for the long haul and wait until they get their asking price.
As a broker, it is sometimes difficult to bring these two factions to a meeting of the minds. They both, essentially, are looking for the same thing, which is value. Unfortunately, they are on polar opposite sides.
Of course, what people see on television doesn't help either. There are a plethora of home shows touting how some new drapes, a coat of paint and a new slipcover on your sofa can bring you thousands, if not tens of thousands of dollars in additional value when you sell your home. This is simply not to case. What people fail to understand is that the majority of these shows eminate from red hot California where it has been a seller's market, to the max, for many years with no sign of slowing. It is one thing to stage your home for a quick sale and, hopefully, acheive as close to one's asking price as possible. It is quite another to expect multiple offers and frenzied buyers who are ga-ga over your new paint job and are willing to pay OVER your asking price.
Of course, as with many things, this is something that almost ONLY happens on TV.
Remember folks, even if it is "reality TV" doesn't mean it is real. After all, once you add "TV" to "reality" you create an oxymoron.
Look for me to talk about investing in upcoming posts.
Cheers!
Rick
Here in the Chicago area, that's a really good question. The state of affairs is a bit puzzling to everyone out there. It is like everyone is at a standoff when it comes to what to do.
My analysis of things is similar, I'm sure, to a lot of brokers out there in the marketplace.
Interest rates are still on the rise, but interestingly enough, it is the short term rates that seem to be impacted more. I've been told that, the artificially low rates are based on changes within the bond market. One theory, (and a fairly reasonable and reputable one at that), makes the assertion that when the Federal Reserve raises rates, a flood of foreign money, (presumably Chinese held dollars that, because of our trade deficit/surplus, the Chinese are reinvesting in the stable, conservative yield, US bond market), comes in and actually keeps rates the same or can actually push them down. The Fed has raised rates and unprecedented 15 times which has never happened in US history. Economics on a global scale have not worked the way, I'm sure, many people may have imagined. As a result, we are actually making history here. Interest rates in the States are being affected and influenced by foreign markets quickly and directly and in ways no one may have perceived.
This has spelled good news in the US housing market for awhile now but it definitely appears that the boom in home equity lines of credit, (which generally have adjustable rates and can, under the present circumstances, fluctuate wildly), as well as ARM, (adjustable rate mortgages), and Interest Only mortgages, is over. People are moving to more conservative, fixed rate products to maintain some stability during some unpredictable times.
Still, 30 year fixed rate mortgages continue to hover in the mid 6% range which is STILL excellent.
Now let's turn our eye to the housing market.
While I don't see a bubble, I am definitely seeing a slow down. I am attributing this phenomenon to a number of things.
With rising rates, the number of people who can actually afford to purchase is going down.
People are now being more choosy about what they buy. Although everyone realizes that purchasing a home is a big decision to begin with, I think they also realize that if the upward trend in rates continues, it may be awhile before they move up to their next home. I think more people are looking at purchasing long term and staying put a minnimum of 5-10 years.
Also, I am seeing a lot of buyers in the 20 something to early 30 something category and they have different expectations. Many of these buyers are young professionals who do not want to concern themselves with earning any "sweat equity" they spend a lot of time at work and at play and don't want to compromise their lifestyles. Thusly, they expect that any home they purchase, (be it single family, condo, etc), be in tip top shape and updated to reflect the expectations of the millenium home.
Where do I go? This factor is huge for sellers. Many sellers are faced with the dilemma of having a lot of equity in their home, but moving up to that next home, (larger home, better location, etc), can actually cost them way more. Thus, many sellers are concerned about what to do or where they will go after the sale of their homes. Because of this, many sellers are content to hold out for their ideal asking price. There is simply less motivation to sell.
So the market has come to a standoff, as opposed to a standstill.
Buyers are either looking for value and are taking their time to make the perfect choice, or if they are inclined to pay a premium for a home, they expect it to be in tip top, spot on, shape.
Seller's, unless under financial duress or pressed into selling for other circumstances, (ie, divorce, job transfer, etc), are inclined to hunker down for the long haul and wait until they get their asking price.
As a broker, it is sometimes difficult to bring these two factions to a meeting of the minds. They both, essentially, are looking for the same thing, which is value. Unfortunately, they are on polar opposite sides.
Of course, what people see on television doesn't help either. There are a plethora of home shows touting how some new drapes, a coat of paint and a new slipcover on your sofa can bring you thousands, if not tens of thousands of dollars in additional value when you sell your home. This is simply not to case. What people fail to understand is that the majority of these shows eminate from red hot California where it has been a seller's market, to the max, for many years with no sign of slowing. It is one thing to stage your home for a quick sale and, hopefully, acheive as close to one's asking price as possible. It is quite another to expect multiple offers and frenzied buyers who are ga-ga over your new paint job and are willing to pay OVER your asking price.
Of course, as with many things, this is something that almost ONLY happens on TV.
Remember folks, even if it is "reality TV" doesn't mean it is real. After all, once you add "TV" to "reality" you create an oxymoron.
Look for me to talk about investing in upcoming posts.
Cheers!
Rick
Friday, February 24, 2006
Pictures
I am posting the photo of my daughter and I that I have been using in all of my marketing pieces. She has been instrumental in helping her "Papa" do some marketing.
In coming posts, I'll be posting some of my listings, virtual tours and other fun items from past and current clients.
Enjoy!
Rick
In coming posts, I'll be posting some of my listings, virtual tours and other fun items from past and current clients.
Enjoy!
Rick
Greetings!
Hello to all of you!
Periodically I like to check in and thank everyone who stops by. Even if you don't post a comment, I hope that you find the information provided here to be helpful and insightful.
If you are in the market for real estate, whether buying, selling or as an investor, I would encourage you to use this blog as a forum for discussion. With over 8 professional years of real estate experience, and as a licensed broker in the state of Illinois, I am knowlegeable and highly qualified to address your real estate needs and concerns.
If you'd like to send me an e-mail, you may do so at rick@saffronrealtygroup.com
If you'd like to search the MLS right now, you can at our website, www.greatchicagorealestate.com or by selecting among the real estate links in the column on this page that says "links".
I'm always happy to help people. I look forward to an opportunity to help you.
Thanks!
Rick
Periodically I like to check in and thank everyone who stops by. Even if you don't post a comment, I hope that you find the information provided here to be helpful and insightful.
If you are in the market for real estate, whether buying, selling or as an investor, I would encourage you to use this blog as a forum for discussion. With over 8 professional years of real estate experience, and as a licensed broker in the state of Illinois, I am knowlegeable and highly qualified to address your real estate needs and concerns.
If you'd like to send me an e-mail, you may do so at rick@saffronrealtygroup.com
If you'd like to search the MLS right now, you can at our website, www.greatchicagorealestate.com or by selecting among the real estate links in the column on this page that says "links".
I'm always happy to help people. I look forward to an opportunity to help you.
Thanks!
Rick
Monday, February 06, 2006
Bubbles, bubbles everywhere.
So. . .
Here is yet another article speculating on the deflation of the housing bubble. This one predicts a soft deflating of the "bubble"
If you analyze some of the data, however, it is really hard to see where the "bubble" actually exists. Sure, market time is up on homes and things have slowed a little from December of 2005 until present. Part of that is normal for this time of the year, at least in Chicago area real estate. The market here definitely has a bit of seasonality.
When you look at the fact that 2005 was yet ANOTHER year of record breaking home sales, the bigger picture suggests that there may not be a bubble at all.
I understand that there are a lot of things to consider whether you are purchasing your first home, or are on a step up or a downsizing phase. So many factors impact the greater economy.
This article is definitely interesting.
http://moneycentral.msn.com/content/P138892.asp
Food for thought.
Here is yet another article speculating on the deflation of the housing bubble. This one predicts a soft deflating of the "bubble"
If you analyze some of the data, however, it is really hard to see where the "bubble" actually exists. Sure, market time is up on homes and things have slowed a little from December of 2005 until present. Part of that is normal for this time of the year, at least in Chicago area real estate. The market here definitely has a bit of seasonality.
When you look at the fact that 2005 was yet ANOTHER year of record breaking home sales, the bigger picture suggests that there may not be a bubble at all.
I understand that there are a lot of things to consider whether you are purchasing your first home, or are on a step up or a downsizing phase. So many factors impact the greater economy.
This article is definitely interesting.
http://moneycentral.msn.com/content/P138892.asp
Food for thought.
Wednesday, February 01, 2006
Rate hikes, fed chairs and speeches OH MY!!
So the Fed has made another hike in interest rates. It will certainly be interesting to see how this affects the housing market and the choices people will make in the year ahead.
So far, these rate hikes really haven't seemed to have much of an impact on the long term rates given to consumers by lenders but, at some point, the will have to. I am already seeing small shifts upward and the trend may be here to stay.
http://news.yahoo.com/s/ap/20060131/ap_on_bi_ge/fed_interest_rates_24
Of course, a new Federal Reserve chairman was also sworn in today. I'm sure there is a lot of tension and nervousness out in the financial markets because former chief Greenspan has been there for so long and done a pretty impressive job.
So will the economy be smooth sailing or are there rough waters ahead?
So far, these rate hikes really haven't seemed to have much of an impact on the long term rates given to consumers by lenders but, at some point, the will have to. I am already seeing small shifts upward and the trend may be here to stay.
http://news.yahoo.com/s/ap/20060131/ap_on_bi_ge/fed_interest_rates_24
Of course, a new Federal Reserve chairman was also sworn in today. I'm sure there is a lot of tension and nervousness out in the financial markets because former chief Greenspan has been there for so long and done a pretty impressive job.
So will the economy be smooth sailing or are there rough waters ahead?
Tuesday, January 24, 2006
"Toddler Fraud"
Here is an amazing, (and quite frightening), story from the December issue of Money magazine.
http://money.cnn.com/pr/subs/magazine_archive/2005/12/STRC.html
The article is "Toddler Fraud" and is a must read for any parent, particularly those of us who get Social Security numbers for our children right away.
I know I was practically forced to apply for a SS# for my daughter shortly after her birth because, without the number, the insurance refused to cover her medical expenses specifically.
I'm sure other parents out there have experieced similar situations. I'm also quite sure that many of you haven't given much thought to the possibility that your toddler might fall victim to identity theft.
This is very thought provoking and, as long as our credit ratings are so important in this world, could have long lasting effects on your children's financial futures.
http://money.cnn.com/pr/subs/magazine_archive/2005/12/STRC.html
The article is "Toddler Fraud" and is a must read for any parent, particularly those of us who get Social Security numbers for our children right away.
I know I was practically forced to apply for a SS# for my daughter shortly after her birth because, without the number, the insurance refused to cover her medical expenses specifically.
I'm sure other parents out there have experieced similar situations. I'm also quite sure that many of you haven't given much thought to the possibility that your toddler might fall victim to identity theft.
This is very thought provoking and, as long as our credit ratings are so important in this world, could have long lasting effects on your children's financial futures.
Greener Acres
Here is another interesting story from this past Sunday.
It illustrates and even more extreme move where some people have chosen to skip the suburbs entirely and have elected a completely rural lifestyle.
A very interesting story!
http://www.chicagotribune.com/classified/realestate/realestate/chi-0601220246jan22,1,78205.story
It illustrates and even more extreme move where some people have chosen to skip the suburbs entirely and have elected a completely rural lifestyle.
A very interesting story!
http://www.chicagotribune.com/classified/realestate/realestate/chi-0601220246jan22,1,78205.story
Chicago Public Schools
Here is an interesting story from yesterday's Tribune regarding the budget issues facing CPS.
http://www.chicagotribune.com/news/nationworld/chi-0601230196jan23,1,2511004.story?ctrack=1&cset=true
http://www.chicagotribune.com/news/nationworld/chi-0601230196jan23,1,2511004.story?ctrack=1&cset=true
Monday, January 23, 2006
Welcome!
Hello all and welcome!
My name is Rick and I am your urban suburbanite. I have lived in both city and suburbs and understand the joys and frustrations of both areas.
For those of you who are looking to purchase a home, sell a home or both; whether you are looking to move from city or suburbs or suburbs to city, I can help!
Currently, as far as trends are concerned, I have noticed as I have been selling homes lately, that there has been a bit of a baby boom since 9/11. So many people are having children that it seems like the world has gone a bit baby crazy. As a father myself, I completely understand the joy of having children.
Of course, having children can present a lot of logistical issues when it comes to where you live. I have, personally, observed that couples with young children, in particular, are faced with the decision of staying in the city or moving to the suburbs.
The city, and in particular our great city of Chicago, has so much to offer. The city has tons of culture and so much for an active young mind to absorb. Of course, space is at a premium and it can be tough sometimes. Some parents simply are longing for a bit of room to allow their young ones to grow and flourish.
But what is the right decision? Is there a right decision?
The right decision is the decision that is right for YOU! It is the decision that takes into consideration the best interests of you and your entire family. The right decision is about the big picture.
I understand that decisions like these can be difficult, that is why I have created this blog to help guide and inform people in the process.
So if you have any comments or questions, lay them on me. If you have any interesting articles, or ideas, send them to me.
I'm here to help make the decision that is right for you!
Cheers!
Rick
My name is Rick and I am your urban suburbanite. I have lived in both city and suburbs and understand the joys and frustrations of both areas.
For those of you who are looking to purchase a home, sell a home or both; whether you are looking to move from city or suburbs or suburbs to city, I can help!
Currently, as far as trends are concerned, I have noticed as I have been selling homes lately, that there has been a bit of a baby boom since 9/11. So many people are having children that it seems like the world has gone a bit baby crazy. As a father myself, I completely understand the joy of having children.
Of course, having children can present a lot of logistical issues when it comes to where you live. I have, personally, observed that couples with young children, in particular, are faced with the decision of staying in the city or moving to the suburbs.
The city, and in particular our great city of Chicago, has so much to offer. The city has tons of culture and so much for an active young mind to absorb. Of course, space is at a premium and it can be tough sometimes. Some parents simply are longing for a bit of room to allow their young ones to grow and flourish.
But what is the right decision? Is there a right decision?
The right decision is the decision that is right for YOU! It is the decision that takes into consideration the best interests of you and your entire family. The right decision is about the big picture.
I understand that decisions like these can be difficult, that is why I have created this blog to help guide and inform people in the process.
So if you have any comments or questions, lay them on me. If you have any interesting articles, or ideas, send them to me.
I'm here to help make the decision that is right for you!
Cheers!
Rick
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