A New Year In Real Estate Begins
As we launch into 2012, here are some interesting statistics from the Illinois Association of REALTORS® on residential real estate market conditions:
Interest rates continued to drop. In December the 30-year fixed-rate mortgage in the North Central region was 3.94 percent for December 2011, according to Freddie Mac. In December 2010 the rate was 4.8 percent. This once-in-a-generation opportunity has created more sales and refinancing interest. In short, the rates are seen by many homebuyers as too good to pass up.
Consumer confidence is increasing as the labor market appears to be improving. According to a Thomson Reuters/University of Michigan survey, an index of consumer sentiment reached its highest level in eight months. The Conference Board’s Consumer Confidence Index also showed gains, reporting levels last seen in April 2011. Better consumer confidence translates to more people comfortable with making a home purchase.
The decrease in median residential sales prices means that price points are reaching truly attractive levels for consumers who have put off such purchases in the face of economic uncertainty. According to data compiled by the Illinois Association of REALTORS®, the last time consumers saw home prices this low ($137,500 in December 2011) was in 2000 when the median price was $140,800.
There have been six straight months of increases in the number of single-family home sales. There was a significant turning point in July. The swing since July has been as high as 27.1 percent (August) and as low as 13.9 percent (September).
Although there were home sales gains in the second half of 2011, they were not enough to swing the numbers into positive territory for the full year. The good news is that strong sales in the second half of the year caused year-to-year comparisons to be relatively flat (down just a tenth of percent).
While overall sales of single-family homes appeared to be gaining traction in the second half of 2011, median home prices still struggled. Year-over-year comparisons show that the median home price recorded decreased in every month. The worst months for median price declines were April (-12.9 percent) and March (-12.2 percent). The best was July (-5 percent).
Fifty-two counties out of 102 in Illinois (51 percent) showed increases in home sales from 2010 to 2011. Forty-three counties showed gains in the median price.
Chicago PMSA All counties in the Chicago PMSA showed gains in home sales in December. DeKalb County led the pack with a 44.7 percent gain over December 2010, followed by Grundy County with 40.7 percent. Cook County lagged with a gain of 12.3 percent.
For the year, all counties in the PMSA except Cook showed home sales gains. Kendall County was the leader with a 13.3 percent gain in home sales over 2010. Cook County saw a decrease of 2.5 percent for the year.
Most Chicagoland PMSA counties showed decreases in December median prices. Grundy (3.7 percent) was the lone exception. DeKalb (-21.1 percent) and Will (-19.3 percent) counties had the steepest declines.
Previous month comparisons show some sales increases in the Chicago PMSA (November, 2011 to December, 2011.) Only Grundy County (0 percent) showed no gain for the measurement period. DeKalb (23.6 percent) and Will (18.5 percent) counties showed the strongest month-to-month gains.
A Challenge to My Fellow Real Estate Agents
These remarks--some might call it venting--are directed to my brothers and sisters in the real estate community who list residential properties for sale. One of the maxims of selling something is that the prospective buyer must be exposed to that which you want him to purchase. In real estate that usually means the buyer has to be able to inspect the property being offered. While the Internet has enabled "virtual" showings of real estate listings, in the vast majority of cases it's still necessary for the buyer to physically tour a home before making a purchase decision. Common sense would thus seem to dictate that responsible listing agents should remove as many impediments as possible to the prospective buyer 's convenience in seeing their listings. This responsibility escalates to a critical level in today's challenging market, where competition is more plentiful than ever, and not fulfilling it constitutes nothing short of gross negligence on the part of a listing agent.
Why is it, then, that when attempting to schedule appointments to show homes, it seems invariable that there will be problems obtaining timely confirmation? And why do so many agents require that showing appointments be made directly through them, when they're not always available to handle these requests promptly and efficiently? What happens when a buyer's agent has clients at his or her desk who want to see a home on short, but reasonable, notice and the listing agent can't be reached? There are systems and services available at nominal cost that make these problems avoidable. The successful firms and agents know this and take advantage of them.
Missed opportunities for listings to be viewed in person by prospective purchasers hurt everyone. They deprive the seller and the buyer of an opportunity to create a transaction; they cost the listing agent and the buyer's agent a commission opportunity; and they make the real estate profession--especially the listing agent and his brokerage company--look incompetent.
Lost sales opportunities increase marketing times and marketing costs for listing companies and agents.With so many brokerages and individual licensees struggling financially, it doesn't make sense that there are not good systems in place for scheduling appointments to show homes. Nor does it make sense that agents do not educate their sellers on the crucial importance of being reachable and ready to show their home at all times. A little bit of pre-planning goes a long way here. To be sure, there are legitimate occasions that require a seller to decline a showing request or require a certain amount of advance notice, but these are the exception, not the rule.
Gone are the days (if they ever existed in the first place) when it was only necessary for lazy and inept agents to place a home in the MLS and wait for the offers to pour in. Today's real estate market requires both the agents and their sellers to work harder and smarter to make their listings easy for buyers to see and purchase.
Bob Dohn
Coldwell Banker Residential Brokerage
140-A S. Roselle Rd., Schaumburg, IL 60193
Direct phone: 847-301-3126
Web: www.BobDohn.com
Rent vs. Own
Fact: Rents are rising
Fact: Rent is not tax deductible
Fact: Paying rent adds to your landlord's bottom line and does nothing for your wealth
Fact: Mortgage interest rates are at the lowest point … EVER
Fact: Home prices are the lowest in a decade
Fact: Buying power is the strongest it has been in 40+ years
Fact: Nobody will send us a memo when the market is going to turn around
Fact: Nobody will send us a memo when rates will spike
Fact: Buyers can purchase a home with as little as Zero - 5% down
Fact: Home buyers enjoy huge tax benefits
Fact: Home prices and rates will go up due to many factors
Fact: It is impossible to pick the bottom of the market
Fact: Real estate is still the best long-term investment available
Sound Familiar?
Here is an excerpt from a piece written by Benjamin Franklin (yes, THAT Benjamin Franklin) in his autobiography, which I am currently reading. It seems quite apropos to today's market and I thought we might take a lesson from it. The time reference of the piece is the early 1700's, well before the American Revolution. The young Franklin had just opened a printing shop in Philadelphia.
"There are croakers in every country, always boding its ruin. Such a one there lived in Philadelphia; a person of note, an elderly man with a wise look and a very grave manner of speaking; his name was Samuel Mickle. This gentleman, a stranger to me, stopped me one day at my door and asked me if I was the young man who had lately opened a new printing house. Being answered in the affirmative, he said he was sorry for me, because it was an expensive undertaking and the expense would be lost; for Philadelphia was a sinking place, the people already half-bankrupts or near being so; all of the appearances of the contrary, such as new buildings and the rise of rents, being to his certain knowledge fallacious, for they were in fact among the things that would ruin us. Then he gave me such a detail of misfortunes now existing or that were soon to exist that he left me half melancholy. Had I known him before I engaged in this business, probably I never should have done it. This person continued to live in this decaying place and to declaim in the same strain, refusing for many years to buy a house there because all was going to destruction; and at last I had the pleasure of seeing him give five times as much for one as he might have bought it for when he first began croaking."
Bob Dohn
Coldwell Banker Residential Brokerage
140-A S. Roselle Rd., Schaumburg, IL 60193
Direct phone: 847-301-3126
Web: www.BobDohn.com
The Dream Is Alive and Well
With so many talking heads seeming to declare the end of the home ownership as something desirable, one wonders if we are to become a nation of renters, with the pleasure of owning one's own home left only to a privileged few. Not if you ask the average American on the street! A recent study by the Pew Research Center indicates that Americans continue to see value in home ownership. In the Pew report 81% of adults surveyed agree that buying a home is the best long-term investment. Even current owners whose homes have lost value in the current stormy market still favor homeownership by 82%, and 81% of renters would like to own a home.
Bob Dohn
Coldwell Banker Residential Brokerage
140-A S. Roselle Rd., Schaumburg, IL 60193
Direct phone: 847-301-3126
Web: www.BobDohn.com
Proposed QRM Harms Creditworthy Borrowers and Housing Recovery
The following organizations, along with the National Association of REALTORS®, prepared an in-depth analysis of the impact of the proposed QRM regulation:
- Center for Responsible Lending,
The executive summary of the white paper, entitled, “Proposed QRM Harms Creditworthy Borrowers and Housing Recovery,” is provided below, or the entire white paper is available for download as a PDF. The executive summary was also issued as a joint statement.
Executive Summary (and statement)
In the midst of a very fragile housing recovery, the government is throwing a devastating, unnecessary and very expensive wrench into the American dream. First time homebuyers will have to choose between higher rates today or a 9-14 year delay while they save up the necessary down payment. And 25 million current homeowners would be locked out of lower refinancing rates because they lack the required 25 percent equity in their homes.
High down payment and equity requirements will not have a meaningful impact on default rates. But they will require millions of consumers, who are at low risk of default, to either put off buying a home or pay unnecessarily high rates. The government is penalizing responsible consumers, making homeownership more expensive or simply out of reach for millions. We urge regulators to develop a final rule that encourages good lending and borrowing without punishing credit-worthy consumers.
Download “Proposed QRM Harms Creditworthy Borrowers and Housing Recovery” white paper > (PDF: 680K
Bob Dohn
Coldwell Banker Residential Brokerage
140-A S. Roselle Rd., Schaumburg, IL 60193
Direct phone: 847-301-3126
Web: www.BobDohn.com
Donald, You’re Fired!
Reprinted from FactCheck.org, a project of the Annenberg Public Policy Center
Trump repeats false claims about Obama's birthplace.
April 9, 2011
Summary
If Donald Trump worked for us, we’d have to say: "Donald, you’re fired — for incompetence." The successful developer and TV celebrity says he’d make a good president, and maybe he would — we take no stand either way about that. But when it comes to getting facts straight, he fouls up again and again on the basics of President Barack Obama’s birth. As a rookie reporter, he just wouldn’t make it.
- He claims the president’s grandmother says Obama was born in Kenya. In fact, the recording to which he refers shows Sarah Obama repeatedly saying through a translator: "He was born in America."
- He claims that no hospital in Hawaii has a record of Obama’s birth. Hospital records are confidential under federal law, but Honolulu’s Kapi’olani Medical Center has published a letter from Obama calling it "the place of my birth," thus publicly confirming it as his birthplace.
- He insists that the official "Certification of Live Birth" that Obama produced in 2008 is "not a birth certificate." That’s wrong. The U.S. Department of State uses "birth certificate" as a generic term to include the official Hawaii document, which satisfies legal requirements for proving citizenship and obtaining a passport.
- He claims that there’s no signature or certification number on the document released by Obama. Wrong again. Photos of the document, which we posted in 2008, clearly show those details.
- He says newspaper announcements of Obama’s birth that appeared in Hawaii newspapers in 1961 "probably" were placed there fraudulently by his now-deceased American grandparents. Actually, a state health department official and a former managing editor of one of the newspapers said the information came straight from the state health department.
- He claims "nobody knew" Obama when he was growing up and "nobody ever comes forward" who knew him as a child. "If I ever decide to run, you may go back and interview people from my kindergarten," Trump said. Well, two retired kindergarten teachers in a 2009 news story fondly recall teaching a young Barack Obama.
The evidence that Obama was born in the U.S.A. is so overwhelming that we haven’t had much to say lately about the sort of bogus claims that Trump repeats. Hawaii’s top official in charge of vital records stated long ago, for example, that the confidential records underlying Obama’s official birth certificate show that he was born in Hawaii and is "a natural born American citizen."
But when a leading prospect for the Republican presidential nomination embraces and repeats these spurious claims and groundless conspiracy theories on national television, we are forced to wade into this swamp once again. For details of where Trump goes wrong, and full documentation of the facts, please read on to our Analysis section.
Note: This is a summary only. The full article with analysis, images and citations may be viewed on our Web site: http://factcheck.org/2011/04/donald-youre-fired/
Consider the Whole Picture When Deciding the Right Time to Buy a Home
Consideration should also be given to the fact that, while these are not "tea and roses" times, the overall economic trend is moderately positive. By an overwhelming majority, Americans still see value in home ownership, which means the demand is out there and it's just a question of time before housing markets stabilize and equity gains begin to return. The only item open to debate is how long that will take. While there are plenty of opinions on that question, the majority of experts seem to feel that, barring any unforeseen turn of events, some degree of stabilization will occur within the next year.
As to whether the glass is half empty or half full, that depends on your overall view of life, I guess.
Bob Dohn
Coldwell Banker Residential Brokerage
140-A S. Roselle Rd., Schaumburg, IL 60193
Direct phone: 847-301-3126
Web: www.BobDohn.com
New Law Requires Cook County Seniors to Reapply Annually for Senior Citizen Exemption
“It’s critical in the coming days that seniors watch for the Senior Citizen Exemption application in the mail,” Assessor Berrios said. “They will owe more on their property tax bills if they fail to fill out this very important application. I don’t want anyone to miss out on their right to save money.”
A new Illinois law requires that seniors re-apply for the Senior Citizen Exemption. On Monday, the Assessor’s office mailed out nearly 300,000 applications containing both the Senior Citizen and Senior Freeze Exemptions to taxpayers who received a senior exemption last year.
“My top priority during this legislative session will be getting this unfair law overturned,” Assessor Berrios said. “I don’t want seniors to run the risk of forgetting to fill out the application and seeing a tremendous increase on their second-installment tax bills.”
Berrios did stress however that seniors must reapply for the Senior Citizen Exemption this year in order to receive the exemption savings on their tax bills. He also said that his office would be hosting numerous senior outreach meetings to make seniors aware of the new annual application requirement.
The Senior Citizen Exemption provides tax relief by reducing the equalized assessed valuation of an eligible residence. This savings is in the form of a deduction on the second-installment property tax bill. Seniors receiving the Senior Citizen Exemption automatically qualify for the Homeowner Exemption, and do not have to apply for it separately.
Seniors who do not receive applications in the mail but believe they are entitled to the exemption, may download a form by visiting www.cookcountyassessor.com. They can also call (312) 443-7550.
To reach as many people as possible, the Assessor’s office is being assisted in senior outreach by the City of Chicago. The City will have the applications available at its six senior regional centers throughout the city.
“Seniors have worked hard all their lives and should receive all the tax relief they deserve. Senior property owners in Chicago should call 3-1-1 to make sure they are receiving all their exemptions and receive assistance if they do not have all their exemptions," Mayor Richard M. Daley said.
Many elected officials joined the Assessor Monday to voice their concerns about the new annual application requirement.
“It is important for seniors to re-apply for their exemptions so that they do not miss out in the savings that are due to them. It is unfortunate that it is necessary to send these notices to our senior citizens each year, and I look forward to the General Assembly passing legislation that will make this process less confusing and more convenient,” Cook County Commissioner Elizabeth Gorman said.
To qualify for the Senior Citizen Exemption for the taxable year 2010, the property owner must have:
- Been born prior to or in the year 1945, Owned the property, or have a lease or contract which makes them responsible for the real estate taxes, and
In addition to the Senior Citizen Exemption, seniors on limited incomes may also qualify for the Senior Freeze Exemption. This exemption freezes the equalized assessed value of their property. To qualify for the Senior Freeze Exemption for the taxable year 2010 taxpayers must have:
-Been born prior to or in the year 1945,
-A total household income of $55,000 or less for income tax year 2009,
-Owned the property or had a legal, equitable or leasehold interest in the property on January 1, 2009 and January 1, 2010,
-Used the property as a principal place of residence as of January 1, 2009 and January 1, 2010, and
- Been liable for the payment of 2009 and 2010 property taxes.
Annual application is also required for the Senior Freeze Exemption.
Eligible seniors who have never applied for the senior exemptions in the past may visit the Assessor’s Web site and download an application or contact the Assessor’s Office and request a form be mailed to them.
“We will continue our public outreach efforts in order to reach as many seniors as possible,” Assessor Berrios said. “We want to do everything to ensure that Cook County seniors continue to receive all the money-saving exemptions to which they are rightfully entitled.”
Bob Dohn
Coldwell Banker Residential Brokerage
140-A S. Roselle Rd., Schaumburg, IL 60193
Direct phone: 847-301-3126
Web: www.BobDohn.com
Calling All Investors!
FHA EXTENDS ANTI-FLIPPING WAIVER
Source: Coldwell Banker Home Loans Mortgage Update
In an effort to continue stabilizing home values and improve conditions in communities experiencing high foreclosure activity, FHA has extended its temporary waiver of the agency's anti-flipping rule. The extension, announced on January 28, 2011,is intended to accelerate the resale of foreclosed homes in areas struggling to overcome possible property abandonment .
With certain exceptions, FHA regulations prohibit insuring a mortgage on a home owned by the seller for less than 90 days. Early last year, FHA temporarily waived this regulation through January 31, 2011. This action will permit buyers to continue to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. It will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.
It’s interesting to note that since the original waiver went into effect last February, FHA has insured more than 21,000 mortgages worth over $3.6 billion on properties resold within 90 days of acquisition. Because of past restrictions, FHA borrowers have often been shut out from buying affordable properties. This action enables borrowers, especially first-time buyers, to take advantage of this opportunity and buy a home that has recently been rehabilitated. It will also help to move more foreclosed properties off the market and reduce the number of vacant homes in neighborhoods throughout this country.
The extension is effective through December 31, 2011, unless otherwise extended or withdrawn by FHA. All other terms of the waiver will remain the same, and HUD continues to invite public comment on it. The waiver contains strict conditions and guidelines to assure that predatory practices are not allowed.
To protect FHA borrowers against predatory practices of "flipping" where properties are quickly resold at inflated prices to unsuspecting borrowers, this waiver continues to be limited to those sales meeting the following general conditions:
All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
In cases in which the sales price of the property is 20 percent or more above the seller's acquisition cost, the waiver will only apply if the lender meets specific conditions.
Here is the website for the HUD waiver or feel free to call me if you would like more detail: http://www.hud.gov/offices/hsg/sfh/currentwaiver.pdf
Bob Dohn
Coldwell Banker Residential Brokerage
140-A S. Roselle Rd., Schaumburg, IL 60193
Direct phone: 847-301-3126
Web: www.BobDohn.com