Just the stats....

It's been awhile since the chicks have posted. We've been too busy shoveling!

Today, we present the facts: nothing fancy, just basic information about the current real estate market.

There are 199 active listings in Wilmette: 10 pending sales and 15 closed sales for a 30 day period ending in mid-January. Of the closed sales, four were for more than $1,000,000.

There are 36 active listings in Kenilworth and 2 pending sales. There were no closed sales during this time period.

There are 175 active listings in Winnetka: 5 pending sales and 8 closed sales for the 30 day period ending in mid-January. Of the closed sales, four were for more than $1,000,000. Of the 175 active listings, 109 are listed for $1,000,000 or higher.

There are 122 active listings in Glencoe: 2 pending sales and 8 closed sales for the 30 day period ending in mid-January.

All these stats really tell us is that there are plenty of homes for sale on the North Shore. Even during the holiday season, a traditionally slow time for home sales, people were buying and selling real estate. We can't determine the seller's or buyer's motivations from this information, nor can we decipher the days on market (DOM), if the seller reduced his price or if the buyer paid cash or got a mortgage. We don't know if these are new homes or homes in need or rehabbing. In short, we cannot tell very much from this set of statistics.

We should not let what we hear or read in the news cloud our ability to evaluate information. We are inundated with bad news and shocking statistics about the housing situation in this country If we operate with that frame of reference when evaluating the stats I provided, things look bleak. If we evaluate the information objectively, we can see that more information is needed in order to determine what is going on here on the North Shore.

More importantly, if you are selling or buying property, these questions and answers can determine your strategy. As some of you know, this chick has been looking at property in beautiful Naples, Florida for the past year. Having recently found a place that makes my heart sing, I was prepared to make an offer. Then I discovered that the place had actually been on the market 9 months longer than I had been originally told. This piece of information changed my approach and initial offer. I didn't end up purchasing this home for reasons that I will share in a later dispatch. The point here is that each property has to be evaluated on its' own unique set of factors. The general market conditions are relevant, only if taken in conjunction with the unique situation of the property you are interested in selling or buying.

Up with downsizing!

       Mary Umbergers column  (Chicago Tribune, Sunday, Jan. 11, 2009) noted a discernible trend among baby boomers and empty nesters.  That is, the stated desire to downsize their homes.  But this time, they actually mean a move to a smaller dwelling, rather than making a lateral or upsize move to more spacious accommodations once the kids have left home.  What people had been referring to as "downsizing", was, in reality, (and illogically), often a move to a bigger, more expensive home.  

      But that seems to be changing.  The economic roller coaster ride that we have all been on for the past year is certainly one of the driving forces behind this desire for "true" downsizing. .   The cost of maintaining a huge home with an equally huge mortgage may not make sense if there is college tuition to pay. 

       Another factor in this shift in thinking might be the   "shame of affluence".  Much of  the current economic crisis (i.e subprime mortgage mess)  is  attributable to greed.  People are reticent to flaunt their wealth for fear of being lumped in with those guys from Wall Street.  Since, our homes are the most obvious symbol of our material worth, a more modest presentation seems appropriate.

     But the chicks think there's another reason for the change.  One that is driven by positive beliefs, rather than negativity.   We think that people are becoming more aware of their use of our earth's precious resources.  The green movement, once equated with a once a year observance, Earth Day has now permeated into our daily lives.  

There is a deliberate consciousness about using less  resources.  We see it in the increased use of recycling, paper over plastic at the grocery store, or better yet, bring your own reusable bag, and bicycling or walking whenever possible.  There are recognized health benefits associated with a move towards green.  Less air pollution and toxins means that we feel better and have fewer allergies.  Finally, the trend towards purchasing our food from local growers and organically grown if possible is one more way that people are adopting a greener lifestyle.

There is no more dramatic way to reduce your carbon footprint than by true downsizing.  Less electricity, gas and water will be consumed in a smaller home.  You will have less garbage to contribute to our landfills. We believe that people in our hometown are looking for ways to use sustainable materials in their homes too.   

With the price of builder's lots declining in value, it is now possible to purchase and build your own green home on the North Shore.  There are several neighborhoods that come to mind that are particularly suited to this end.  In particular, the presidential streets in Glencoe, the tree named streets in Winnetka and many neighborhoods in west Wilmette.  Instead of 6 bedrooms with 6 plus baths, you build a home that has 3  bedrooms and 2 plus baths.  And you can use bamboo flooring, install solar panels or tankless water heaters or any other of sustainable products that you desire. 

The advantages of building a green home in one of these neighborhoods are plenty.  You can have new construction, you will actually use all of the rooms in your home, rather than the fraction that you presently use.  There are builders willing to build green homes on the North Shore. You'll likely be within walking distance of public transportation (to Chicago or Ravinia) and the wonderful farmer's markets.  Your home will fit in perfectly to these charming neighborhoods.  The best part of this plan is that you will be able to truly downsize and remain on the beautiful North Shore!

What to you think?  I'd love to hear from you.  Post a comment or send me an email. 

Is refinancing the patriotic thing to do?

This week, national mortgage rates dropped again, with 30 year fixed rates averaging 5.13%, down from 5.26% last week.  15 year fixed rates also dropped from 5.01% to 4.79%.  While the ARM's and jumbos also declined, they are in the 6% range. (source: Bankrate.com).  Along with the infusion of megacash (yours and mine) into our financial institutions, it appears that the Feds are making it quite attractive to borrow money again, whether it be a mortgage or  refinancing your existing mortgage. 

It's more than that though.  These deliberate actions by our Government (lowering the interest rates and providing liquidity to banks and other lenders) were done for the specific purpose of getting the economy moving again.  The belief is that if you lower your monthly mortgage payments, you will have more money to spend in other parts of the economy (shoes anyone?).  Or in the worse case scenario, you can avoid foreclosure.  

Refinancing your existing mortgage then, can be viewed as your patriotic duty, right?  Not so fast though.  

Here's our anecdotal tale of one person's attempt to refinance.  We have this friend, Pete.  He lives in our hometown, owns his own home with mortgage, own business and has savings. He wants to do his bit to support our country.  Pete talked to several banks and mortgage brokers in our area.  In order to even be considered for a refinance loan, Pete will have to provide all of the following:

1.   an income stream:  this means a job or other provable source of income,

2.  net worth:  this means more than the existing equity in your home.  It means an investment portfolio or savings account! 

3.  a great credit score:  just like the math portion of the SAT's, anything 720 or higher, and,

4.   your home has to be worth more than what you are looking to borrow!

These seem simple enough to provide on paper, but a closer examination of each will show how difficult it may be to actually refinance.  

If you have recently lost your job or have a job that is dependent on commissions (like real estate for instance) or have even started your own business, you may have an actual need to lower your monthly mortgage payments in order to pay your other bills.  Yet, you won't be able to provide your lender with  an established income stream, thus, preventing you from refinancing.  We have been told that you will have to show two years of income in order to qualify.

If you have your money in the stock market, you have probably seen your portfolio plummet in the past several months.  Is there enough to satisfy your lender?

If you haven't done so recently, check your credit reports.  You are entitled to examine your credit report annually, at no charge.  Go to www.annualcreditreport.com or contact the reporting agencies directly to obtain your reports.  These agencies are Transunion, Equifax and Experion.

Finally, it is possible your home might not be worth what you paid for it, especially if you purchased in the past few years.   Ask your realtor to recommend a reputable appraiser evaluate your home.  If you can afford it, it's a good idea to have this done before you begin your refinancing application process.  Then you will have something to compare with the lender's appraisal.  As a caveat, we have been told that in order to qualify for a refinance loan, you will have to have at least twenty percent (20%) equity in your home.  While you are talking with your realtor, ask her for a list of what homes have sold in your neighborhood in the past month.  This is the same list that the appraiser will be working from when determining your home's value.  Recent appraisals only look at sold properties in the past month as opposed to the 3/6 month time frame used a few years ago.

In order to figure out if refinancing is your best move, it is essential that you talk personally with your lender in order to get the exact figures you will need in order to refinance.

Don't forget to find out about the closing costs too.  We have been told that these charges can total in the thousands.  If you are planning on selling your home in the next couple of years, you will have to determine whether you will be saving money after paying the closing costs.  Ideally, the lender that currently have your mortgage with may have a lending program that offers lower closing costs.  It might be in your best interest to inquire.

As for our friend Pete, he was able to successfully refinance!  God Bless America!

Mallinckrodt in the Park foreclosure

The developers of Wilmette's own senior community, Mallinckrodt in the Park have been hit with a foreclosure lawsuit by M&I (Marshall & Isley) Bank of Milwaukee.  Named in the $15 million suit were Donald Gianone, president of Oculus Development, LLC and five family members of Pickus Cos, who personally guaranteed the loan.

You may recall that the Village of Wilmette purchased the former Mallinckrodt College from Loyola University in order to save the historic building from a wrecking ball.  Oculus Development, LLC & Pickus Cos, in a joint venture bought the building from the Village.  They agreed to develop a senior condominium project including 12 "affordable" condo units that were priced at $200,000 in the building that once housed the college.  The remaining units were listed for  considerably higher, some over a million dollars.  To date, approximately half of the 81 units remain unsold.

What do you think of the Mallinckrodt Predicament?  Who are the victims here?  Are there any villans?

On the bright side:  If you find yourself looking for something to do this Sunday, January 11, 2009, stop by the Wilmette Rec Center on Old Glenview Rd.  Starting at 2pm you can view amazing  artwork at the Winter Recital & Vibrant Art of Persons with Disabilities Art Exhibit.  A recital featuring The New Trier High Five Choir and some New Trier graduates begins at 3pm.  Admission is free.   Come and support Wilmette's art scene.