The S&P/Case-Shiller composite index of house prices in 20 metropolitan areas rose 1.6 percent in July from June, more than triple the estimate of a 0.5 percent rise found in a Reuters poll. The index rose 1.4 percent the month before, S&P said today. The 10-city index gained 1.7 percent in July after a 1.4 percent rise the previous month. Today's report seems consistent with the 0.3% rise in the July Federal Housing Finance Agency's (FHFA) House Price Index released earlier this month.
One has to be careful to read too much into the one month data because foreclosures were down in July and these can have a dramatic impact on prices. In addition, the American Recovery and Reinvestment Act $8,000 First Time Buyer credit which expires on Dec. 1, 2009 has had a very positive impact on home sales in the past months so it remains to be seen if the trend continues.
In a live interview from Boston on "Squawk On The Street" this morning, Leif Thomsen, Mortgage Masters President and CEO, commented that mortgage and home sale activity have increased and urged that the first time buyer program be continued in its current form for several months. He even said that small bidding wars for lower priced homes have been occurring, but that the market for Jumbo mortgages is still soft.
All 20 metro areas showed an improvement in the annual rate of decline in July compared with June and only two cities, Seattle and Las Vegas, showed month-to-month declines according to the S&P/Case-Shiller index. The monthly price increases helped the annual rates, with the yearly pace of declines in home prices slowing to a 12.8 percent drop in the 10-city index and 13.3 percent downturn in the 20-city index. Average home prices across the United States are now at levels seen in the autumn of 2003. Chicago prices were up 2.7%.
Tuesday, September 29, 2009
Monday, September 21, 2009
Local Area Schools Win Blue Ribbon Awards
The U.S. Department of Education’s Blue Ribbon Schools Program honors public and private elementary, middle and high schools that are either academically superior or that demonstrate dramatic gains in student achievement to high levels. Every year a prestigious few schools across the nation are awarded a Blue Ribbon and are honored at a ceremony in Washington, DC. Each school receives a plaque and flag signifying their status, these schools serve as models for other schools throughout the nation.
The program requires schools to meet either of two assessment criteria:
· have at least 40 percent of their students from disadvantaged backgrounds that dramatically improve student performance in accordance with state assessment systems
· It recognizes schools that; and it rewards schools that score in the top 10 percent on state assessments
Of the schools submitted by each state, at least one-third must meet the first criterion of having 40 percent of the students from disadvantaged backgrounds. The program allows both elementary and secondary schools to be recognized in the same year.
On September 15 2009, the 2009 National Blue Ribbon Schools were announced by U. S. Secretary of Education, Arne Duncan. 314 public and private schools will be honored at a ceremony in Washington, D.C., November 2-3. Of the 314 schools receiving the award, 13 Chicago area schools are honored:
Elementary Schools:
Arcadia Elementary School
20519 Arcadian Way
Olympia Fields, IL 60461-1396
Phone: (708) 747-3535
Central Elementary School
900 Central
Wilmette, IL 60091-2608
Phone: (847) 251-3252
Ira Rupley Elementary School
305 East Oakton Street
Elk Grove Village, IL 60007-1727
Phone: (847) 593-4353
Madison Elementary School
611 S Madison Street
Hinsdale, IL 60521-3982
Phone: (630) 887-1390
Stevenson Elementary School
2106 Arrowhead Drive
Bloomington, IL 61704-2357
Phone: (309) 663-2351
Windsor Elementary School
1315 E. Miner Street
Arlington Heights, IL 60004-6339
Phone: (847) 398-4297
Middle Schools:
Clarendon Hills Middle School
301 Chicago Avenue
Clarendon Hills, IL 60514-2608
Phone: (630) 887-4260
Clifford Crone Middle School
4020 111th Street
Naperville, IL 60564-5027
Phone: (630) 428-5600
Hinsdale Middle School
100 S Garfield Street
Hinsdale, IL 60521-4252
Phone: (630) 887-1370
Woodlawn Middle School
6362 Gilmer Road
Long Grove, IL 60047-5171
Phone: (847) 353-8500
High Schools:
Deerfield High School
1959 Waukegan Road
Deerfield, IL 60015-1430
Phone: (224) 632-3000
New Trier Township High School
385 Winnetka Avenue
Winnetka, IL 60093-4238
Phone: (847) 446-7000
Whitney M. Young Magnet High School
211 S Laflin Street
Chicago, IL 60607-5305
Phone: (773) 534-7500
Congratulations to the students, faculty, and parents in these schools and communities for their hard work and commitment to excellence in education.
The program requires schools to meet either of two assessment criteria:
· have at least 40 percent of their students from disadvantaged backgrounds that dramatically improve student performance in accordance with state assessment systems
· It recognizes schools that; and it rewards schools that score in the top 10 percent on state assessments
Of the schools submitted by each state, at least one-third must meet the first criterion of having 40 percent of the students from disadvantaged backgrounds. The program allows both elementary and secondary schools to be recognized in the same year.
On September 15 2009, the 2009 National Blue Ribbon Schools were announced by U. S. Secretary of Education, Arne Duncan. 314 public and private schools will be honored at a ceremony in Washington, D.C., November 2-3. Of the 314 schools receiving the award, 13 Chicago area schools are honored:
Elementary Schools:
Arcadia Elementary School
20519 Arcadian Way
Olympia Fields, IL 60461-1396
Phone: (708) 747-3535
Central Elementary School
900 Central
Wilmette, IL 60091-2608
Phone: (847) 251-3252
Ira Rupley Elementary School
305 East Oakton Street
Elk Grove Village, IL 60007-1727
Phone: (847) 593-4353
Madison Elementary School
611 S Madison Street
Hinsdale, IL 60521-3982
Phone: (630) 887-1390
Stevenson Elementary School
2106 Arrowhead Drive
Bloomington, IL 61704-2357
Phone: (309) 663-2351
Windsor Elementary School
1315 E. Miner Street
Arlington Heights, IL 60004-6339
Phone: (847) 398-4297
Middle Schools:
Clarendon Hills Middle School
301 Chicago Avenue
Clarendon Hills, IL 60514-2608
Phone: (630) 887-4260
Clifford Crone Middle School
4020 111th Street
Naperville, IL 60564-5027
Phone: (630) 428-5600
Hinsdale Middle School
100 S Garfield Street
Hinsdale, IL 60521-4252
Phone: (630) 887-1370
Woodlawn Middle School
6362 Gilmer Road
Long Grove, IL 60047-5171
Phone: (847) 353-8500
High Schools:
Deerfield High School
1959 Waukegan Road
Deerfield, IL 60015-1430
Phone: (224) 632-3000
New Trier Township High School
385 Winnetka Avenue
Winnetka, IL 60093-4238
Phone: (847) 446-7000
Whitney M. Young Magnet High School
211 S Laflin Street
Chicago, IL 60607-5305
Phone: (773) 534-7500
Congratulations to the students, faculty, and parents in these schools and communities for their hard work and commitment to excellence in education.
Sunday, September 20, 2009
Is An Auction For Me?
There are numerous ways to take advantage of distressed property sales today: short sales, foreclosures, auctions, and private sales. Each has advantages and disdvantages. Let's focus on auctions today. We will look at public auctions held by auction houses, not Sheriff sales.
Public auctions of real estate can be daunting, but don't have to be. What if I really want to buy a specific property? Will I be bidding against seasoned investors who will bid the price up beyond my price? Worse yet, will I accidentaly buy a property because I rubbed my nose or waved to a friend. There are a lot of myths about public auctions which need to be disspelled.
First, if you intend to buy a specific property at an auction, do your homework. You need to have your strategy clear. Are you buying it as a principal residence or as an investment property? How will you hold title? How will you finance the purchase and any necessary renovations? Engage your trusted advisors: accountant, attorney, property inspector, lender, and real estate professional. Answering these questions is key to guiding your actions. It is well known, that you make your money when you buy real estate not when you sell it. If you do not understand what this means ask me. You need to be very clear on your ultimate exit strategy and have a good idea about timing.
Then go visit the property and learn as much as possible about the history and potential issues with it. This is a real good time to engage your trusted real estate advisor. In most cases, the party selling the property is prepared to pay for your buyer representation. You should visit the property with your agent and they should prepare a Comparative Market Analysis (CMA)for the property both in its existing condition and after improvements. This is the information you will need to formulate the upper limit of what you will pay for the property and how much room you will have left to make repairs and renovations while protecting your profit margin and downside risk. It can also be a very good idea to have a professional property inspection done at this time.
It's a good idea to put together a detailed list of all of the repairs and renovations required for this property. With this budget in hand you can model the property financials. For investors, I have a robust financial model which calculates the buy-in captialization rate, the projected sale capitalization rate and the financial hurdle rates. It can be used to develop "what if" scenarios and develop contingency plans.
Gather all of the bid documents and get them to your attorney for review. This will include things like the purchase agreement, disclosures and other contractual agreements with the auction company and the seller. You need to have these reviewed and you will be asked to sign a waiver saying that you have been given the opportunity to have them reviewed in advance of the auction.
When you go to the auction, you will register with the auction company. You will need to have a certified check in hand for the amount they have specified. This check can be made out to you and is proof that you have the funds necessary to bid. It is also usually the amount that you will have at risk if you bid successfully, sign the purchase agreement, but decide not to go ahead with closing on the property. This is referred to as "liquidated damages". If you do not bid on a property or do not bid successfully, the check can be returned to your bank for cancellation.
As you enter the auction hall or ballroom, there will probably be a lot of hubbub. This is an exciting moment and the auctioneers are there to create an atmosphere of frenzy. It is their job to get the highest price for the property and they are good at working the crowd to get the bidding going hot and heavy. You will have been issued a paddle or numbered card to indicate that you are bidding on a property. The floor assistants to the autioneer will work specified areas of the floor and manage the bidding. Floor assistants will try to get the bidders working against each other, but they will be constantly checking that a bid is real and understood. They won't confuse a bid signal with a nose rub.
Going, going, gone. When the property is presented, the auctioneer will bring to the attention of the bidders any special conditions regarding the property which will also have been included in the property bid package. These might include special items such as pending issues with the city or municipality, mold or other disclosures, and minimum reserves or the hurdle price which the bidding must overcome for the property to be sold at the aution. However, do not rely on the special disclosures to take the place of having done your own homework. Once the property bidding price has overcome the reserve, the auctioneer will announce that the next successful bid will buy the property. Now is when you need discipline. If you have done your financial analysis and contained your emotions, you will either continue to bid or you will walk away if you go beyond your price. Remember, other bidders have other financial models and targets and may also let their emotions get the better of them. Also, do not forget that there will be a buyer's premium (maybe 5%) which will be added to the final price.
If you have been succesful in your bid, you will then go to a separate room to finalize the purchase agreement and other documents, receive special instructions and contact information, and orgainze the timing of your closing. Most likely, this paperwork will need to be forwarded to the party (usually a bank) owning the property to be reviewed and negotiated or a verbal agreement will be reached. Later, you will be instructed in writing if your purchase offer has been accepted. Use this time to revisit the property and finalize your plans. Then it's time to get your money together, close on the property and start working on it.
Auctions can be great opportunities to get real estate at well below market prices today. Remember to engage your trusted advisors: Accountant, Attorney, Lender, Property Inspector, and Real Estate Professional. Have a plan, follow your plan not your emotions, and have contingencies.
Public auctions of real estate can be daunting, but don't have to be. What if I really want to buy a specific property? Will I be bidding against seasoned investors who will bid the price up beyond my price? Worse yet, will I accidentaly buy a property because I rubbed my nose or waved to a friend. There are a lot of myths about public auctions which need to be disspelled.
First, if you intend to buy a specific property at an auction, do your homework. You need to have your strategy clear. Are you buying it as a principal residence or as an investment property? How will you hold title? How will you finance the purchase and any necessary renovations? Engage your trusted advisors: accountant, attorney, property inspector, lender, and real estate professional. Answering these questions is key to guiding your actions. It is well known, that you make your money when you buy real estate not when you sell it. If you do not understand what this means ask me. You need to be very clear on your ultimate exit strategy and have a good idea about timing.
Then go visit the property and learn as much as possible about the history and potential issues with it. This is a real good time to engage your trusted real estate advisor. In most cases, the party selling the property is prepared to pay for your buyer representation. You should visit the property with your agent and they should prepare a Comparative Market Analysis (CMA)for the property both in its existing condition and after improvements. This is the information you will need to formulate the upper limit of what you will pay for the property and how much room you will have left to make repairs and renovations while protecting your profit margin and downside risk. It can also be a very good idea to have a professional property inspection done at this time.
It's a good idea to put together a detailed list of all of the repairs and renovations required for this property. With this budget in hand you can model the property financials. For investors, I have a robust financial model which calculates the buy-in captialization rate, the projected sale capitalization rate and the financial hurdle rates. It can be used to develop "what if" scenarios and develop contingency plans.
Gather all of the bid documents and get them to your attorney for review. This will include things like the purchase agreement, disclosures and other contractual agreements with the auction company and the seller. You need to have these reviewed and you will be asked to sign a waiver saying that you have been given the opportunity to have them reviewed in advance of the auction.
When you go to the auction, you will register with the auction company. You will need to have a certified check in hand for the amount they have specified. This check can be made out to you and is proof that you have the funds necessary to bid. It is also usually the amount that you will have at risk if you bid successfully, sign the purchase agreement, but decide not to go ahead with closing on the property. This is referred to as "liquidated damages". If you do not bid on a property or do not bid successfully, the check can be returned to your bank for cancellation.
As you enter the auction hall or ballroom, there will probably be a lot of hubbub. This is an exciting moment and the auctioneers are there to create an atmosphere of frenzy. It is their job to get the highest price for the property and they are good at working the crowd to get the bidding going hot and heavy. You will have been issued a paddle or numbered card to indicate that you are bidding on a property. The floor assistants to the autioneer will work specified areas of the floor and manage the bidding. Floor assistants will try to get the bidders working against each other, but they will be constantly checking that a bid is real and understood. They won't confuse a bid signal with a nose rub.
Going, going, gone. When the property is presented, the auctioneer will bring to the attention of the bidders any special conditions regarding the property which will also have been included in the property bid package. These might include special items such as pending issues with the city or municipality, mold or other disclosures, and minimum reserves or the hurdle price which the bidding must overcome for the property to be sold at the aution. However, do not rely on the special disclosures to take the place of having done your own homework. Once the property bidding price has overcome the reserve, the auctioneer will announce that the next successful bid will buy the property. Now is when you need discipline. If you have done your financial analysis and contained your emotions, you will either continue to bid or you will walk away if you go beyond your price. Remember, other bidders have other financial models and targets and may also let their emotions get the better of them. Also, do not forget that there will be a buyer's premium (maybe 5%) which will be added to the final price.
If you have been succesful in your bid, you will then go to a separate room to finalize the purchase agreement and other documents, receive special instructions and contact information, and orgainze the timing of your closing. Most likely, this paperwork will need to be forwarded to the party (usually a bank) owning the property to be reviewed and negotiated or a verbal agreement will be reached. Later, you will be instructed in writing if your purchase offer has been accepted. Use this time to revisit the property and finalize your plans. Then it's time to get your money together, close on the property and start working on it.
Auctions can be great opportunities to get real estate at well below market prices today. Remember to engage your trusted advisors: Accountant, Attorney, Lender, Property Inspector, and Real Estate Professional. Have a plan, follow your plan not your emotions, and have contingencies.
Tuesday, September 8, 2009
Top 10 Ways to Make Home Buyers Hate your House
Selling a Home? Avoid these Home Buyer Turnoffs
Are you selling a home? Did you know that even though home buyers are all looking for something different, the majority of them will turn around and walk back out of your door if they notice one or more of these Top 10 problems.
1. Odors
House odors are number one on the home selling uh-oh list. The most offensive are: cigarette smoke and pets followed by mildew not far behind.
If you smoke indoors--the house smells like cigarettes. If you have pets, the house might smell bad--even if you don't notice it. Ask someone who doesn't live there to take a sniff, and don't get angry when they tell you the truth.
Eradicate the odors so that you can present potential buyers with a clean, fresh atmosphere--not a house that's full of perfumes to cover up the odors.
2. Dogs that Meet You at the Door or in the DrivewayDogs frighten some people and irritate others. You'll have a much better response from showings if you control your pets--dogs, cats, whatever.
You say you plan to put them in a bedroom or garage and then ask people not to open the door to that area? Bad idea. Would you buy a house you can't inspect? Of course not.
Remove pets during showings if possible. If you can't, contain them in crates for their own safety and to show respect for the feelings of potential buyers.
3. Dirty Bathrooms
Grimy bathrooms are an instant turnoff. Scrub them, paint them, buy a new shower curtain, rugs and towels--do what it takes to make them shine. If you're serious about selling the home, the extra work is a must.
4. Dimly Lit Rooms
Dark homes are a turnoff to most home buyers, so try to brighten them up:
Replace dim light fixtures
Install additional light fixtures
Install (quality) sun tunnels or skylights
Remove heavy drapes to let the light stream through windows
Repaint some rooms with colors that reflect light
Trim tree limbs that shadow the house
Dirty and fogged windows are another buyer turnoff. Clean them inside and out to bring in more light. If possible, replace any double-pane windows with broken seals. You can find them by looking for a foggy residue that cannot be removed.
5. A House Full of Busy Wallpaper
Busy wallpaper in every room turns off most buyers, and even people who love wallpaper rarely like what you've chosen. It's a personal decorative touch that they want to select themselves.
It's the masses you must appeal to when you're selling a home, so take a hard look at your wallpaper and decide if it should be removed and replaced with paint. Don't paint over it, because it will be obvious that you did--and buyers know that makes removing it even more difficult.
6. Damp Basements
Dampness or damp smells in the basement throw up a red flag to buyers that the foundation leaks!
Most problems we see are not caused by faulty foundations. They occur because rainwater is being diverted towards the foundation instead of away from it.
Clogged underground drains
No rain gutters along roofline
Downspouts aimed the wrong way
Go outside the next time it rains and determine where runoff water is going.
7. BugsRoaches, spiders, any insect that shouldn't be in the house. Get rid of them.
8. Poor Curb Appeal
You must grab a buyer's interest from the curb if you want to sell the home for top dollar. Home buyers often refuse to go into a house with an unkempt yard, sagging doors or peeling paint. You say you can't afford to paint? Okay, but get that yard in tip-top shape and grab a screwdriver to fix those doors.
9. Gutters with Plants Growing in Them
I'm serious. Some people never clean their gutters, and it always makes buyers wonder what else hasn't been maintained.
Remember the drainage issue in #6? Cleaning packed gutters might help.
10. Sellers Who Hang Around for Showings
Yes, you... leave the house during showings. Home buyers feel awkward about opening closet doors and lingering for a really good look at the house if the seller is home.
If you're selling by owner, give them some space, don't hover.
Parting Words
Most of the Top 10 problems are home selling issues you can correct without spending a lot of money. Do it now, before you put the house on the market, because if your house develops a reputation among agents as the house that smells, the house with the huge barking dog or the house where the owner won't leave people alone, it will be too late. Your house will be last on their list to show potential buyers.
Are you selling a home? Did you know that even though home buyers are all looking for something different, the majority of them will turn around and walk back out of your door if they notice one or more of these Top 10 problems.
1. Odors
House odors are number one on the home selling uh-oh list. The most offensive are: cigarette smoke and pets followed by mildew not far behind.
If you smoke indoors--the house smells like cigarettes. If you have pets, the house might smell bad--even if you don't notice it. Ask someone who doesn't live there to take a sniff, and don't get angry when they tell you the truth.
Eradicate the odors so that you can present potential buyers with a clean, fresh atmosphere--not a house that's full of perfumes to cover up the odors.
2. Dogs that Meet You at the Door or in the DrivewayDogs frighten some people and irritate others. You'll have a much better response from showings if you control your pets--dogs, cats, whatever.
You say you plan to put them in a bedroom or garage and then ask people not to open the door to that area? Bad idea. Would you buy a house you can't inspect? Of course not.
Remove pets during showings if possible. If you can't, contain them in crates for their own safety and to show respect for the feelings of potential buyers.
3. Dirty Bathrooms
Grimy bathrooms are an instant turnoff. Scrub them, paint them, buy a new shower curtain, rugs and towels--do what it takes to make them shine. If you're serious about selling the home, the extra work is a must.
4. Dimly Lit Rooms
Dark homes are a turnoff to most home buyers, so try to brighten them up:
Replace dim light fixtures
Install additional light fixtures
Install (quality) sun tunnels or skylights
Remove heavy drapes to let the light stream through windows
Repaint some rooms with colors that reflect light
Trim tree limbs that shadow the house
Dirty and fogged windows are another buyer turnoff. Clean them inside and out to bring in more light. If possible, replace any double-pane windows with broken seals. You can find them by looking for a foggy residue that cannot be removed.
5. A House Full of Busy Wallpaper
Busy wallpaper in every room turns off most buyers, and even people who love wallpaper rarely like what you've chosen. It's a personal decorative touch that they want to select themselves.
It's the masses you must appeal to when you're selling a home, so take a hard look at your wallpaper and decide if it should be removed and replaced with paint. Don't paint over it, because it will be obvious that you did--and buyers know that makes removing it even more difficult.
6. Damp Basements
Dampness or damp smells in the basement throw up a red flag to buyers that the foundation leaks!
Most problems we see are not caused by faulty foundations. They occur because rainwater is being diverted towards the foundation instead of away from it.
Clogged underground drains
No rain gutters along roofline
Downspouts aimed the wrong way
Go outside the next time it rains and determine where runoff water is going.
7. BugsRoaches, spiders, any insect that shouldn't be in the house. Get rid of them.
8. Poor Curb Appeal
You must grab a buyer's interest from the curb if you want to sell the home for top dollar. Home buyers often refuse to go into a house with an unkempt yard, sagging doors or peeling paint. You say you can't afford to paint? Okay, but get that yard in tip-top shape and grab a screwdriver to fix those doors.
9. Gutters with Plants Growing in Them
I'm serious. Some people never clean their gutters, and it always makes buyers wonder what else hasn't been maintained.
Remember the drainage issue in #6? Cleaning packed gutters might help.
10. Sellers Who Hang Around for Showings
Yes, you... leave the house during showings. Home buyers feel awkward about opening closet doors and lingering for a really good look at the house if the seller is home.
If you're selling by owner, give them some space, don't hover.
Parting Words
Most of the Top 10 problems are home selling issues you can correct without spending a lot of money. Do it now, before you put the house on the market, because if your house develops a reputation among agents as the house that smells, the house with the huge barking dog or the house where the owner won't leave people alone, it will be too late. Your house will be last on their list to show potential buyers.
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