How the Housing Market in Chicagoland Affects Seniors

It has been a familiar route for so many homeowners over the years: build equity in the property where you lived for so many years, then sell it for a handsome profit so you can move into that lovely retirement community you had your eye on for so long.

But what if the family homestead does not sell?

Without deep pockets to otherwise fund the right to take up occupancy in that senior lifestyle home, the average senior homeowner cannot make that move.

A high-profile case in point is The Clare at Water Tower, a seniors-only project that launched in 2008. It has unfortunately been forced to file bankruptcy recently, due to lagging sales. The folks who have already moved into the complex will be able to continue in residence, although they will apparently have many empty units around them while waiting for yet more buyers to step up and move in.
It is partly an issue of being able to sell the family home, but likely it is also a matter of having to let go of all that loss in equity in the family home. Any home can be sold in this market (Chicagoland), as long as it is priced according to what the buyers are willing to pay for it. Nonetheless, it is hard to swallow such large equity losses, when the seniors reflect on what their home was worth some 2, 3, 4, or 5 years ago.
It makes the decision a bit harder, perhaps, but it can be done.

What a Dedicated Realtor Offers the Client

Today my local MLS rolled out a much-enhanced research and report tool to provide unparalleled data to aid the agents and their clients. I spent two hours in webinars today to learn about the scope of this new tool. Being in the Chicago area, the clients are sometimes needing assistance in the neighboring states of Indiana and Wisconsin. This new tool allows research into those areas as well.

Some of the research allows an agent to drop subscription-based services, sometimes unaffordable to every agent. The playing field has now been significantly leveled for any and all agents who invest the time to learn and use the new system. I am pasting in a brief summary from an announcement flyer from the MLS to provide the reader a notion of how powerful this research tool truly is.

Map locations and see what is nearby
Identify market potential
Locate neighborhoods with particular characteristics
Analyze listing activity (Active, Pending, Sold & Expired) by zip code or neighborhood
Query locations that meet geographic or attribute criteria
Conduct neighborhood analysis and side-by-side comparisons
Use key market indicators: foreclosure, property photos and listing information
Compute route distances and options through multi-point and one-click driving directions
Link from map or database grid to images, property detail & more

Buying or selling property in the Chicagoland area, there is now even more reason to utilize a real estate professional. Don't go it alone!

"Accidental Landlord" - an accident waiting to happen?

It has become more commonplace for a private homeowner to unexpectedly find himself (gender neutral for this writer's purpose) playing the role of landlord as a result of the difficult selling environment in real estate. This happens because the property owner needs to move on to a new job, or some such compelling reason. When the home sits empty, unable to find a buyer, the "Plan B" is dusted off and presented to the owner: RENT IT! Get some revenue stream started with the property!

And so this home that perhaps was on the market for SALE, now becomes a home on the market for RENT. There are two sides to a lease arrangement: the landlord's side, and the tenant's side. Each has its own set of challenges, thrills, and every other emotion in between. Most Realtors will tell you that they are handling many more home rental listings over the past 3-5 years than they ever imagined they would. I include myself in that statement. I have represented both landlords and tenants.

I want to keep my posts brief, so this one will put forward one caveat for would-be tenants who are searching for an appropriate rental property. Do whatever you can to feel confident that your landlord is not having mortgage difficulties on the property that you intend to lease. Or at least be prepared to move with perhaps only 30 days notice once you do move into the property. Unwittingly, tenants can sign a year lease, move in, and unceremoniously be forced to vacate in the first month because the owner is in pre-foreclosure and the bank has earned the right to take the property back. This is exactly what happened to tenants in a downtown Evanston condo last year, folks who were referred to me to rescue them and find an immediate replacement rental in a matter of days. Yes, I helped them find a wonderful new rental home. The agent who rented the condo to them had some unpleasant consequences, I was told. My office sales manager has repeatedly warned us agents to be diligent when working with rental clients (or landlords); "Check the status of that property!" We Realtors are charged with taking every precaution to protect our clients' interests, and that includes not getting kicked out of a rental property before the term of the lease ends.

When looking for a rental home, you must do your homework on the owner of property, regarding the mortgage status. There are websites online that promise to report on a landlord's mortgage status, for a subscription fee. On the other hand, you can determine that information for yourself, free of charge, if you are looking in a community that has public website access to county records, such as the Recorder of Deeds and the local Circuit Court. Foreclosure is a legal process, and foreclosure lawsuits can be tracked online here in Cook County.  Or, you can put that task in the hands of your favorite Realtor, who will take care to show you only properties that are not tainted by the threat of foreclosure.

This is just one more outcome of the whole housing/mortgage crisis in America, but at least you can manage it by taking precautions to protect yourself.

A SMALL HOLIDAY GIFT FROM FANNIE AND FREDDIE

Just in time to perhaps give distressed homeowners a chance to enjoy the holiday season, Fannie Mae and Freddie Mac have announced that they will not evict any affected foreclosure-victim families from their home (single family and 2-4 unit properties) from December 19 through January 2, 2012. It's not much, but at least the holidays can be spent in familiar home surroundings.

THE LONG SUFFERING SELLER SYNDROME

It has happened again; I watched a very nice single family home sit on the market for 8 months, from early April of this year, during the prime selling season of Spring and Summer. It was not my listing, but I had visited the property since it was very close to my own home. I thought it was overpriced from the first day. A home is worth what the market is willing to pay for it; that's just the way it is. I don't know if that original list price came from the seller or the listing agent, but the end of the story was predictable. That seller carried the cost of ownership for 10 long months, watched the neighboring homes sell over the summer, and went through the stress of multiple price reductions in an effort to attract a buyer. So this listing closed this week, for 17.3% under the original list price. Factor in the real estate taxes the seller had to pay, insurance, etc., it makes me sad, literally sad, for the seller. This was not a short sale, not a distressed sale in any way. Please make certain your list price is the RIGHT price, the price at which it will sell. There is no such thing as "let's give it some room for negotiation" option in this market, readers. There is far too much on the market for the buyers to pick from, to make them want to negotiate with a seller whose price is so far off the mark. Want to sell your home? Pick the Realtor to help you who will present you with a realistic market value of your home, and take that agent's advice.

It's Tuesday. Do You Know Where Your Realtor Is?

Every week of the year, Chicagoland real estate agents are invited to make their listed properties available for viewing to all other agents. It's essential an open house for agents. In my geographic area (Chicago, and north suburbs), this weekly open house is either on a Tuesday morning, or Wednesday morning (depending on which community the property is in, dictated by the local multiple listing service).

We call this the "brokers' tour". This tour serves many purposes, the most obvious is to promote the listing agent's property to other agents. How better to explain the benefits and amenities of a home than to have the area agents come in to see it with their own eyes? The mood is relaxed. Sometimes the listing agent will promise snacks or even a full-blown lunch to draw more agents into their property for a visit. It's a good time to take in the property, ask the listing agent questions, and perhaps catch some conversation with other agent colleagues who are visiting when you are.

Another reason that agents get into their cars and "tour" around to visit other listings is to check out the competition for their own listings, or a listing that will be coming onto the market in the near future. It's imperative that a seller's agent have personal knowledge of what the competing properties are all about.

And finally, it's all about staying current with the local real estate market. I once had a friend comment to me that the weekly brokers' tour must truly be a waste of time. I responded that there was no way I could be a good agent for my clients if I was not aware of what homes are looking like and selling for in my own area. It's like trying to sell jewelry without ever setting foot in the jewelry store, ever. You just can't do it.

So imagine my distress this morning when I could not gain access to my own MLS service in order to research which listings were going to be available for touring today. Phone calls to the tech help desk didn't get a solution to the problem, only access to the "MLS-lite" version that does not even give me the brokers tour search capacity. Sigh. The internet is great when it works!

Evanston City Council Reaches Deeper into Citizens' Pockets

In the last few days of November, Evanston's City Council voted to increase the property tax rate by another 4.63% for the 2012 budget year. This increase is to fund the pension and debt costs, according to an accounting of the Council's vote by the Pioneer Local newspaper of December 1. The translation of that property tax increase is described as adding $45 to a property owner's $5000 property tax bill. The 2012 budget has increased parking meter fees (25 cents per hour across the city), along with parking fine increases. More than ever, it is wise to avoid any expired parking meters in Evanston! Another area of increased cost is the water service to homes; the average Evanston family will pay an additional $7.88 next year. Still needing more revenue, the Council has voted to increase fees on refuse carts, a whopping jump from $1 to $7.95 for the small carts, and from $4 to $14.95 for the large carts!). Although not all members of the Council were 100% in support of all these cost increases to be carried by Evanstonians, the Council's attempts to cut costs (including reducing the city's payroll by eliminating job positions)were not enough to balance the budget for next year. The Council's November 29 meeting can be viewed on YouTube at this URL: http://www.youtube.com/v/8QYmvN0QtY4?version=3&hl=en_US