Yuval Degani’s Blog

At the end of last month, the National Association of Realtors (NAR) released figures for the November 2011 Pending Home Sales index, revealing a record-high increase in pending home sales.

The index not only rose healthily over the previous month’s index, it reached its highest level in 19 months—prompting many to believe that the state of the real estate market is finally on track for a steady recovery.

The Pending Home Sales Index, a leading indicator of housing activity in the country, rose 7.3 percent in November to 100.1 (up from 93.3 the previous month). November’s index is 5.9 percent above last November when it was 94.5. More significantly, however, is the fact that the NAR’s most recently released Pending Home Sales index is the highest one recorded since April 2010, when it climbed to 111.5 as buyers clamored to beat the deadline for the home buyer tax credit.

Real estate experts like NAR Chief Economist Lawrence Yen are optimistic that November’s index is a good omen for the country’s real estate market. “November is doing reasonably well in comparison with the past year,” he said in response to the publishing of the latest index. “The sustained rise in contract activity suggests that closed existing-home sales, which are the important final economic impact figures, should continue to improve in the months ahead.”

Yen believes that the unusually high increase in the index can be at least partially attributed to a release in pent-up demand from buyers who were eager to take advantage of the market’s record affordability but were unable to close on a property due to strict lending standards or other issues. Many of these buyers may have recommitted to buying a home after experiencing initial difficulties with their contracts.

Out of the four regions of the United States, the West experienced the greatest month-over-month increase (14.9 percent) in pending home sales, ending up at 121.2 in November. The Northeast, Midwest and South witnessed month-over-month index increases of 8.1 percent, 3.3 percent and 4.3 percent respectively. Every region except the Northeast saw an additional year-over-year increase in pending home sales.

Post by: Dream Town Chicago real estate

Attracting a buyer to your Chicago home listing can seem daunting at times. Knowing what buyers are looking for can be key to success in selling Chicago homes. Keeping the property in satisfactory condition before it is listed is important. According to an article in Inman News, even though home purchasers’ selections may vary due to specific wants and needs, buyers all desire a home that is ready to move in. For that reason, it is not the best idea to show a home (or even post photos of it) before it is in tip-top selling condition.

A Chicago home that is ready to be shown should have touched-up paint, be clean and well-maintained, and look attractive for those driving by on the street. Many potential buyers drive by a property before calling to enquire about a visit. If they do the initial drive-by and don’t like what they see, they aren’t likely to pursue the listing.

It is essential to keep the lawn free of debris and any grass, trees and plants healthy. Using up-to-date color schemes with exterior and interior paint helps with buyer appeal as well. If there are things that cannot be repaired due to cost, like a fence, it is better to take it out completely. Enhancing the look of your Chicago home’s first impression with additions such as shutters, a gate or entryway, can also be beneficial if done correctly.

Internet advertising is extremely useful for casting a wide net on prospective buyers. Listing with local agents who use online marketing is wise, as many buyers make their initial searches online and it is available for viewing all hours of the day and night. However, there are important tips to advertising this way. Good quality photos are crucial. The more pictures you have, the better. According to the Inman article, you should have a minimum of 15 different images.

Publicizing to a wide audience is the best bet. Many buyers will eventually look outside the community where they were initially looking in efforts to find something better elsewhere. An open house should be held specifically for real estate agents once the Chicago home is ready for showing. Realtors oftentimes view homes with their current buyers in mind and if yours is a fit for one of their clients, you might not even have to hold an open house for the general public.

Open houses—both public and for brokers—are great ways to create maximum exposure. However, since the change in economy, they are not as cost-effective as they once were. Private showings are much more economical, but your home must be ready to view regularly so it’s easy for agents to take buyers to the property. Pricing, of course, is key to obtaining a buyer. Taking care of the property and following these steps will bring a closing sale much quicker.

Like a phoenix rising from the ashes, spec home construction is experiencing a marked increase in popular Chicago neighborhoods like Lincoln Park and Bucktown, following a period of relative obscurity. Though it never fully went off the map, the construction of spec homes—residential properties built in the expressed hopes of attracting a buyer—did experience a relative lull in the past couple of years, with only the more financially stable construction companies taking the risks. Recently, however, there has been a surge of spec home construction from smaller companies that finally feel confident enough in the housing market to start building again.

According to one Chicago-based developer who was quoted on the topic in a recent article from Crain’s, “If you’re able to capitalize on land prices and labor prices, which have come down a bit, and tighten your program and financing charges, you can build a more economical house that the market responds to.” The developer, Andrew Bowyer of Middlefork Capital LLC, sold 3 luxury spec homes in November and is currently working on the construction of 2 more properties in Lincoln Park.

Even as home prices have wavered in the years since the recession, people like Peter Dinneen (a partner at another local company, Hibernian Development), have noticed that housing product has continued to move in the past year or so. This was a key insight for Hibernian, which plans to construct two multi-million dollar single-family homes on Wayne Street in Lakeview in the near future. Chicago areas like Lakeview are particularly attractive locations in which to build spec homes due to their strong neighborhood schools and wide lots.

While developers like Dinneen are really tossing their hats into the ring with expensive, high-risk developments, other builders like Stephen O’Neill of O’Neill Development Group are taking a more cautious approach. At the height of the housing bubble, O’Neill built homes on spec that cost anywhere from $2 million to $3 million. But his most recent project—a Roscoe Village home—is set to cost a more moderate $1.3 million.

Because of the continued risk associated with building houses on spec, the prevailing type of spec home in Chicago (and around the country) continues to be the frame home. These properties have the same floor plans and finishes as many brick homes, but they cost significantly less to build and are priced at roughly $150,000 to $200,000 less than a masonry house of the same size with similar features.

Although it may not be a definitive signal of the end of the housing crisis, the rise in spec home construction is certainly an important step in the right direction.

Chicago’s Streeterville area is preparing to welcome a new neighbor to its vicinity. Construction on a 42-story apartment building—to be named the Optima Center—located at the northeast corner of Illinois and St. Clair streets began recently, signaling the continued demand in Chicago for new construction despite recent rough times.

The building, designed by renowned architect David Hovey, is a joint venture of Optima Inc. (owned by Hovey) and DeBartolo Development. Hovey has gained national and international plaudits in the past for the numerous contemporary buildings he designed across Arizona and Chicago. He is perhaps best known locally for Optima Old Orchard Woods, a luxury condominium building overlooking Harms Woods Forest Preserve in Skokie.

The 325-unit Optima Center is conveniently located just a block east of Michigan Avenue. Each rental unit will feature an open floor plan, with floor-to-ceiling windows, hardwood floors, state-of-the-art stainless-steel appliances, and granite and marble counters.

Additional amenities provided by the high-end Chicago apartment building include recreational facilities such as a glass-enclosed fitness center with an exercise facility, basketball court and flex studio. There will also be an indoor lap pool with retractable glass walls for indoor/outdoor use and a hot tub and locker rooms equipped with steam rooms. Outdoor patios and grills will be constructed at amenity-level terraces.

Atop the Optima Center will be a landscaped roof skydeck with seating areas, two hot tubs and two grills, all encircling two beautiful fireplaces. What’s more, the building will house a multipurpose room just for residents with a game room, lounge, flat-screen TV and two catering kitchens. The security measures consists of a doorman, monitored access, an intercom system and video surveillance.

Tenants who own cars will not have to fret about where to park, either, as the building will contain a 238-car parking garage with bicycle storage space and additional storage facilities. The Optima Center will also be home to office/commercial space.

For some, the idea of renting out one’s Chicago home to strangers for a period of time can be daunting and risky. Allowing people to run rampant in your own personal sanctuary can seem like more trouble than it is worth. But for a growing number of Chicagoans, and people across the country, renting out one’s property is a financially lucrative way to enjoy the holidays away from home. After all, why not take advantage of the fact that so many people are looking for a place to stay while on vacation in Chicago? If it sounds like a good idea to you, you are not alone.

In fact, the practice is gaining so much momentum there are whole websites—like HomeAway, VRBO, Wimdu and airbnb—dedicated to matching up property owners with potential renters. Since 2008, HomeAway’s global listing count has risen from 338,396 to more than 625,000 this November, signaling a marked increase in people interested in temporarily renting out their homes.

The main draw behind home renting is clearly monetary. While many homeowners are wary of opening up their home to a stranger, some find it too difficult to say no to the financial gain that comes along with it. According to a yearly poll conducted by HomeAway, on average, people who make their vacation property available for rent take in between $30,000 and $35,000 a year—not an insignificant sum, especially if you are currently struggling to make ends meet.

If you are tempted by these figures, make sure you conduct thorough research before you actually commit to renting out your Chicago home. Scour the aforementioned rental websites to scope out the competition. Take note of how other homes are decorated, what amenities they offer, which Chicago neighborhoods they are located in and what prices they are asking. Determine whether your property is a desirable place for someone who is on vacation—Remember, even properties far outside a large metropolis can be attractive to those trying to get some peace and quiet from the city.

Let your insurance company know you are planning on renting out your property, making sure you have the proper liability coverage and damage insurance just in case anything goes wrong.

When setting up your home for your renter, make sure to depersonalize as much as possible—as though you were staging your home for an open house. Renters want a space that is as unfussy as possible and free of clutter, so clear countertops, store pictures of the kids and tidy up the kitchen.

As long as you conduct the rental through the proper conduit—i.e. a reliable rental company or website—and set a list of house rules that are to be abided by, you should have very little to worry about when renting out your Chicago home.

The coming year is expected to witness a healthy, gradual improvement in the housing market, according to the chief economist at the National Association of Realtors (NAR), the nation’s largest real estate group. Existing home sales are predicted to rise by 4 to 5% in 2012, while new home sales (which were at a record low this year) should experience even more of an improvement.

Lawrence Yun, chief economist of NAR, detailed the extent of the housing market recently at an annual NAR conference. He stated that the current year has been characterized by tight mortgage credit conditions and wariness of the real estate market. These factors have resulted in a weak year for real estate sales, but Yun believes there is a considerable “pent-up demand based on population growth, employment levels and a doubling-up phenomenon that can’t continue indefinitely.”

Overall, existing home sales are expected to rise just 1% by the end of the year, with 4.96 million homes sold in all. New construction home sales, which reached a record low this year of 302,000, are expected to rise considerably in the coming year—by about 23% to 372,000.

At the real estate conference, Yun’s organization projected a gross domestic product increase of 2.2% in 2012, rising from a 1.8% increase this year. The unemployment rate in America is expected to decline to 8.7% in the second half of next year. In addition, mortgage rates should rise from their current historically low levels to 4.5% in the middle of 2012.

Due to record low interest rates this year, homes are more affordable than they have been in a long time. Yun predicts that this favorable affordability will result in a record number of homes sold next year. In fact, he believes 2012 will most likely be the second best year for the real estate market on record since 1970. Yun and the NAR hope that “credit restrictions will ease and allow more homebuyers to take advantage of current opportunities.” And, as inventory decreases, the median home price should experience a projected rise in 2012 as well.

Post by: Dream Town

In the past, home construction in Chicago concluded when winter weather commenced. Unless equipped with a proper roof, a Chicago home under construction at the outset of winter had to be set aside until the bitter Chicago winter melted away into spring several months later. Allowing an unfinished home simply to sit untouched for the course of several months hemorrhaged funds from the future owner and forced them to sit helplessly by, fronting the costs without the luxury of observing progress on their home. Fortunately, nowadays winter home building is not only a realistic possibility, but also a strategic advantage to homeowners. New products and technologies allow builders to continue home construction well into winter with just a few simple requirements.

During the years of the housing boom, when selling a newly-built home was more of a sure thing and less of a risk, it was standard practice for homebuilders to pour foundation in the fall, when the weather was more pleasant, allowing them to finish before the temperature dropped. In light of lower demand and tighter costs, builders are now more beholden to buyers who know exactly what they want and when they want it. This means completing the home at the buyer’s whim, even if it means building in chillier climes.

Innovative breakthroughs in homebuilding technologies have rendered the task of winter homebuilding thoroughly manageable. According to Ryan Weitzman, local co-owner of Reconstruction General Contractors, “As long as the house is sheeted with vapor barrier, and you keep temporary heat going, everything can be done on the inside.” As long as ice is not a factor, he says, exterior housework is also quite doable. The threat of snow is actually less of a negative factor in winter homebuilding than one might think—in the grand scheme of things, it is much easier to deal with than rain, for example.

Building in the winter can incur additional costs, however. Depending on the contractor or builder, winter-specific tasks such as ripping frost out of the ground and specialized materials such as winter-resistant concrete can add more to the overall cost of the construction process. Then again, allowing your home to sit untouched during the harsh winter months costs money as well, so make sure to conduct extensive research before starting construction on your home. See what makes sense for you, then proceed.

Late last week, the National Association of Realtors (NAR) released figures for its monthly index that tracks pending sales of U.S. resale homes. While the numbers did fall on a month-to-month basis, many are finding hope based on the fact that the index rose in September compared to a year ago.

The NAR’s widely respected Pending Home Sale Index is a measure of the number of American real estate contracts that have been signed but not yet closed. In general, the index represents roughly 20 percent of all existing-home transactions. An index score of 100 represents the average level of sales contract activity in 2001, the first year examined by the trade group. In the month of September, the index rose year-over-year by an overall 6.4 percent, to 84.5. The index declined on a monthly basis by 4.6 percent.

All four regions of the U.S. enjoyed a healthy increase in the Pending Home Sales Index from the previous year. The Midwest fared best, witnessing a growth of 12.3 percent, to 71.5. The next largest year-over-year growth was in the West, where the index rose 5.6 percent, to 105.8. The South and the Northeast had the lowest year-over-year growth, though they still managed to experience an index increase of 5 percent and 4 percent, respectively.

In addition to releasing information on pending home sales in the United States, the NAR also reported its most updated forecast report for 2011 and 2012. An earlier prediction of America’s future gross domestic product had to be revised based on the most recent GDP data released the same day as their announcement.

Compared with the 1.3 percent rise in the GDP in the second quarter of 2011, the third quarter showed a marked improvement—an increase of 2.5 percent. According to NAR’s predictions, the U.S. GDP will rise by 1.8 percent in the year 2011, with a 2.3 GDP growth the following year.

The NAR released additional predictions for this year and 2012, projecting that some 4.955 million resale homes are to be sold this year in America (up 1 percent compared to 2010). National home sales should continue to rise in 2012, the NAR says. If its forecast is correct, existing home sales in the U.S. will go up 4.3 percent next year to 5.169 million homes.

While NAR’s figures anticipate sales of new single-family homes to fall by 4.7 percent this year, it is expected to increase the following year by 21.3 percent (to 372,000). The median price of a new home should rise 1.8 percent this year (to $225,000) and 3.5 percent in 2012.

News by: Chicago real estate company – Dream Town Realty

This month brought a continuance of positive news for the real estate market in America. Earlier in the week, the National Association of Realtors (NAR) released data from their monthly index that tracks pending sales of U.S. resale homes. The NAR’s Pending Home Sales Index, a measurement of real estate sales contracts signed but not yet closed, normally represents roughly 20 percent of all existing-home transactions. In the month of September, the index rose 6.4 percent year-over-year to 84.5. To put the number in perspective, an index score of 100 equals the average level of sales contract activity in 2011, the first year NAR studied the index.

The NAR index revealed that all four regions of the United States experienced significant growth in pending home resales. The Midwest witnessed the most drastic increase, up from 12.3 percent to 71.5 percent. In the West, the index leapt 5.6 percent year-over-year in the past month to 105.8—the highest index value of any of America’s regions. The index also rose 5 percent year-over-year in the South, and 4 percent in the North.

In addition to the Pending Home Sales Index, NAR released its most updated forecast report for the current year and 2012. The forecast had to be amended in light of the recently released U.S. gross domestic product increase of 2.5 percent in the third quarter, which grew from 1.3 percent in the second quarter. As predicted by the NAR, the GDP in America should grow an overall 1.8 percent in 2011, and 2.3 percent the following year.

The most updated economic forecast released by the National Association of Realtors predicts that some 4.9+ million resale homes will be sold this year in America, while 5.169 million existing-home sales transactions will be made in 2012, up 4.3 percent from the previous year. While the existing-home median price is expected to fall this year, according to the NAR’s calculations, it will rise a predicted 2.6 percent in the coming year. Sales of new, single-family homes are also forecasted to rise in 2012, by 21.3 percent. Finally, the median price of a new home should increase 1.8 percent in the current year, and 3.5 percent next year.

Post by: Dream Town Chicago

In urban areas, access to city transit is an important asset. That’s why Chicago home sellers often tout proximity to public transportation as a key selling point. Just read a few Chicago home listings and you’ll see how agents highlight that “walk to Brown Line” as notable attributes. The mention of a nearby ‘L’ station tells house hunters the home is connected and convenient, even if it isn’t in a downtown neighborhood.

One of the first things Chicago home buyers consider when looking for a place to purchase is location. How far is the property from work? From the kids’ school? From the lakefront? From the Loop? From a grocery store? From retail shops? This checklist of priorities varies between individuals, but everyone seems to have their own set of ideas about what they want to be close to. And that can very much affect people’s decision on where to live.

In Chicago, the elevated train system is considered the most prevalent form of mass transit, even though bus routes are more widespread and service a larger grid of city streets. Still, in real estate advertisements the ‘L’ prevails as the best indication of where a listing is situated and how easy it is to get around from Home Sweet Home. And while it is considered desirable to be a short walk from an ‘L’ stop, it can be a hard sell if the property is right next door. This is because many of the ‘L’ tracks are above-ground and are extremely loud when trains pass through. The noise level and invasion of privacy (some tracks run right alongside second-story residential windows) can be a big deterrent for Chicago house hunters.

However, for some the urban setting of an elevated track overhead and the roaring sound of the ‘L’ going by is the epitome of Chicago living. In many cases, people who like being in the thick of it can even benefit from slightly discounted property prices. You may have to turn the volume up on the TV every time a train comes by, but the trade off is easy access to public transit and often a good deal on your own piece of Chicago real estate.

Suburban Chicago homes that are located near Metra rail lines can be hot commodities as well. People who work in the city and live outside (or vice versa) can use the Metra as a quick, direct and sometimes more economical way to commute to their jobs. It also serves as a good option for travel to other suburban locales and transportation hubs within the city.