Glencoe-North Shore Market Trends: Update December-January2013

Ideal real estate news for the 2013 New Year…North Shore-Chicago Illinois home sales volume jumped 30.6% compared to previous-year levels in November!  Median prices also increased 7.7% statewide according to the Illinois Association of REALTORS® recent reporting.

The Chicago North Suburban housing market is gaining additional strength with Listings Under Contract up 73.3%, Inventory levels shrinking 36.9%, prices moving higher as the Median Sales Price increased 12.2%, and Market Times down 12.1%. Momentum has been maintained even in historically slow holiday timeframes this year. The trends point to upward figures being seen well into 2013. Although real estate analysts are keeping an eye on listing duration, and fixed rate averages. Confidence continues to soar among local and relocation buyers with the November 2012 mortgage rates at 3.33% for the North Central region. Last November it averaged 4.0%. See image below from Midwest Real Estate Data LLC and The North Shore Barrington Association of Realtors (click to enlarge):

Fifty-five (55) of 102 Illinois counties including the North Shore showed year-over-year home sales increases in November 2012. More than half (54) counties showed year-over-year median price increases including Cook, up 7.9%. See supporting real estate data in the image below. (Provided by MRED and NSBAR) click to enlarge:

Sales and price information is generated by Multiple Listing Service closed sales reported by 31 participating Illinois REALTOR® local boards and associations including Midwest Real Estate Data LLC data as of Dec. 7, 2012 for the period Nov. 1 through Nov. 30, 2012 reflected in December 2012. The Chicago PMSA, as defined by the U.S. Census Bureau, includes the counties of Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will.

The Illinois Association of REALTORS® is a voluntary trade association whose 41,000 members are engaged in all facets of the real estate industry. In addition to serving the professional needs of its members, the Illinois Association of REALTORS® works to protect the rights of private property owners in the state by recommending and promoting legislation to safeguard and advance the interest of real property ownership.

Find Illinois housing stats, data and the University of Illinois REAL forecast atwww.illinoisrealtor.org/marketstats.

What to do if or When an Appraisal is Low: North Shore Real Estate

Whether you are buying or selling on Chicago’s North Shore, the cost of the home is important. North Shore real estate agents often do their own market analysis to price a property—and many times do an outstanding job, but often the use of an appraiser can be beneficial to provide an independent, unbiased opinion to further ensure the price is right on target.

The other side of the coin is that there are still great deals to be had, even with prices increasing. But, if an appraisal doesn’t make the cut, it’s important to be prepared in advance for this scenario. With this in mind, here are the three main tips to consider when the appraisal comes in lower than expected:

1. Create an effect on the money

While adjusting the price up or down may not feel good for the buyer or the seller, it may be a smart move, depending on your situation.

North Shore Buyers, if the long-term value is there and the home is the “love of your life,” it will truly benefit you in the end.

North Shore Sellers, if you need to make the sale and are running out of time, a compromise may be essential. Buyers may also have to spend even more because a decrease in equity could cause you to fall below the lender’s required down-payment threshold, possibly requiring the purchase of private mortgage insurance.

The main question to ask … is it worth it?

2. Consider renegotiation

Just because the appraisal is not what is expected doesn’t mean the sale will not close. However, in a low-inventory North Shore market, sellers may not want to conduct a second appraisal, which means that buyers and sellers have to decide if they want to work together to seal the deal — whether the seller adjusts the price to the appraised value or the buyer and seller renegotiate a new price. Look at how far you’ve come and worked together. It may have taken you both some time to get to this point. Keep in mind that both sides have something to lose by not moving forward after investing time and money in the purchase. If a compromise can be made, it most likely will be. On the flip side, if the North Shore property is in demand, the seller may opt out of negotiating down as they may want to take a chance on someone else paying the difference or going for a cash buyer.

3. Check the report for accuracy

Appraisal reporting can be long, complicated documents, but they can be very revealing if you take the time to read them thoroughly. Make a note of anything that looks off, and verify that the information is correct, not only for the property itself but also for the properties that compare to your own. Confirm that ALL comps are listed — some may not be included on the MLS, and your real estate agent may have to research. Your agent will work with the buyer’s mortgage professional to ensure any discrepancies are relayed to the appraiser. While there is no guarantee that the report will change, it certainly helps to clarify any errors and understand why an appraisal reached a certain price point. Appraisals also point out if there are any secrets lurking within the property’s walls, such as unpermitted additions that add square footage but cannot contribute toward the property’s value. For this reason it’s important that sellers are honest and upfront from the beginning and that buyer’s do a little research before putting in an offer. More information HERE

For more information on this and other North Shore real estate topics, feel free to stop by Gloria Matlin’s real estate office located at 640 Vernon Ave in the downtown district of Glencoe, Illinois 60022. Allow our 40+ years of Chicago North Suburban expertise, guidance, trust, assurance, superior performance, and top-tier volume to be at your disposal.