Another Round of Foreclosures

Ran across this article from Winston Westbrook.

The 2nd wave of foreclosures is coming due to the following 4 reasons:

1. The US unemployment rate is currently at 9.7% according to the U.S. Bureau of Labor Statistics for June 2009. That’s over a 1 percent increase since February and it’s only climbing. In my state of California the unemployment rate is at a whopping 11.6%. The state with the highest unemployment rate is Michigan at 15.2%. My friends, with those high percentages it doesn’t matter how low of an interest rate a homeowner received when modifying his or her loan this past year. If you don’t have a job and can’t get one, you are going to lose your home, plain and simple. Unemployment rates are only expected to rise towards the end of 2009.
2. Homeowners that were denied a loan modification and are currently behind in their payments are creeping into foreclosure.
3. Homeowners in the process of a short sale that did not get approved by the lender are getting foreclosed upon.
4. Sub Prime, Alt A, Prime and ARMS that are coming closer to their resets (please see graph below). 2007 was the last year a majority of these loans were funded. These loans are beginning to reset and with a continued down economy and low property values it will be very difficult for these homeowners to refinance. As you can see in the graph from Credit Suisse it shows that towards the end of 2009 all the way into 2011 a huge wave of mortgage resets will cause a major portion of the 2nd wave or shadow inventory as some are calling it.

Have a Great Weekend

This is just a short posting to say have a great weekend. I will be posting lots of new information next week!

Closed: 659 Justina, Hinsdale

Courtesy of MlS Connect

This listing in foreclosure closed this past week. It has 4 bedrooms, 4 bathrooms, a 3 car garage and 2 fireplaces. It was built in 2002 on a lot size 60x150. Taxes are $13,712.68.

The original listing price started at $649,900. on 3/06/2009.
The listing price was most recently dropped to $579,500 on 6/12/2009.
The house sold for $554,000.

This is located close to I -294 on the northeast side of Hinsdale. This is a fairly large home in good condition.

The house was listed by by Coya Smith of Smith Partners& Associates,Inc. If you are interested in foreclosures, there are many out there that I could show you. Please call 630-464-2633.

News From Crain's: Housing is Stablizing in 2009

(Crain's) — Chicago-area home sales inched up in July compared with July 2008, the first year-over-year increase in more than three years, according to the Illinois Assn. of Realtors.

CHICAGO-AREA SALES
Below is a monthly year-over-year comparison of home sales (single-family and condo) in the nine-county Chicago area.
Month	2009	2008	Change
January	2,965	3,927	-24.5%
February	3,082	4,326	-28.8%
March	4,260	5,759	-26.0%
April	4,747	6,094	-22.1%
May	5,634	6,927	-18.7%
June	7,140	7,806	-8.5%
July	7,427	7,408	0.3%
Source: Illinois Assn. of Realtors

In the nine-county Chicago region, 7,427 homes were sold July, up 0.3% from 7,408 sales in July 2008, the Realtors group said in a release Friday. The Chicago area hadn’t seen a year-over-year monthly increase since March 2006.

"It's significant that we are seeing break-even or better sales levels compared to last year at this time on top of the month-to-month increases since January,” Pat Callan, president of the association and owner of Realty Executives Premiere in Wheaton, said in the release.

Chicago-area sales also rose 4% last month compared with June, the sixth consecutive month that has happened.

Sales still fell year-over-year in the city, with 1,975 in July, down 11.3% from July 2008.

"Chicago continues to show a leveling of the marketplace as we see distressed properties being absorbed. With that said, we are a long way from seeing a stable real estate market in Chicago, and we face challenges surrounding lending that do not take into account real local market conditions," David Hanna, president of the Chicago Assn. of Realtors, said in the release. "Policy changes are still needed before Chicago can have a healthy real estate market, and a full economic recovery."

Median prices fell year-over-year in the Chicago area and the city. The region’s median price — where half the homes sold for more and half sold for less — was $213,500 in July, a 16.3% decrease from July 2008, the Realtors association said.

In the city, the median price was $245,000 in July, down 18.3% from last year.

Statewide sales were essentially even, with 11,407 in July compared with 11,417 in July 2008.

The Realtors group's sales figures include new and existing homes. The nine-county Chicago Primary Metropolitan Statistical Area consists of Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will.

Hinsdale Area Market Report

I spent a few hours this morning looking over stats for the MLS listings in the Hinsdale area. Homes sales are clearly down from 2008. This is what I see from the reports, indicating that it is still a good buyers market. Call me for more information on homes for sale.

Home sales are down 16% from 2nd quarter 2008, which was already lower year over year from the 2nd quarter of 2007 and 2006. Many of the transactions that did go through were discounted builder properties, bank owned properties and short sales. This is the current trend for transactions in DuPage County and the western suburbs of Chicago.

2170 homes single family homes closed in Dupage for the 2nd quarter of 2009. The average market time for these listings was 188 days, and the average sale price was $329,921.

In the 2nd Quarter of 2008, there were 2285 home sales with an average sale price of $375,931…

This totals to a drop in sales of around 5%, and a pricing drop of 12%. Homes are getting more affordable in Dupage County… This is in part to the many foreclosures that lead to Bank sales, and short sales. (Where sellers cannot pay anymore, and the lenders take less at closing, to avoid the extra costs involved with a foreclosure.)

Home sales are up across the country, and in Illinois…but it doesn’t look like this is the case in Dupage County. So buyers, you can still get a good deal!

Don’t forget the $8000 1st time buyer credit expires 11/30/09! You must close on or before that date to qualify!

The data in this post is from MLS Service.

What are Bank Foreclosure Properties?

From Real Estate Info Organization

When an individual is not able to pay or to keep paying the loan that he or she has taken from a bank in order to pay the debt that he/she has, then the bank will issue on a first basis a penalty charge that can increase exponentially the debt amount in just a few months. Naturally, when a debt has been grown by the penalty interests that are accumulative generally by the day not the week or the month, the borrower or debtor is usually unable to keep the pace and pay the entire over due amount.

If the debt is due to a credit card line, then the Bank can issue a foreclosure on all and each property that the debtor has, so that these properties might be put to sale and the profit be used to settle the debt of the debtor with the bank. On the other hand, if the debt that is being backed down is a real estate debt, meaning that the debtor borrowed money to make a real estate purchase either a home or a business building, the bank can take claim on the property and place it again in the market for sale.

Of course, properties that are foreclosed and that are then replaced on the market for sale usually have to have a lower cost this means that the bank will be loosing money. According to the type of loan that the borrower had with the bank, this institution might require or see fit to expand the foreclosure to the surrounding properties of the borrower such as cars and other real estate properties.

All of the properties that are seized and foreclosed by the bank will be placed and catalogued on bank foreclosure listings that are later printed and published in the corresponding areas for bank clients, public in general and sometimes even the bank employees can participate on them.

Bank foreclosure listings are a new concept which has recently emerged in the lending business. Bank foreclosures refer to listings of those homes or properties for which the homeowner has failed to make the repayment of the bank’s loan taken to purchase the property. Bank foreclosure listings are issued for such properties so that the bank can sell them in order to get back its loan amount. The listings which are issued for such properties are lesser than the current market price of the property in order to induce prospective buyers to make considerable profit from the purchase of the property. Usually the bank foreclosured are at 65% to 80% of the current market price of the property.

Kevin Simpson, has been working on Bankforeclosurelistings.org studying the foreclosures market, helping buyers on the finer points of bank foreclosure listings.

Homes Sales Jump by Crains

Local home sales jump in second quarter compared with 1Q

By: Staff Aug. 11, 2009

(Crain's) — Chicago-area home sales jumped almost 68% in the second quarter compared with the first quarter, according to the Illinois Assn. of Realtors. Local sales fell about 15% compared with the second quarter last year.

“We are moving through inventories and that’s a good sign for the Illinois housing market,” Pat Callan, president of the association and owner of Realty Executives Premiere in Wheaton, said in a release Tuesday from the association. “Year-over-year sales are still lower, but one promising trend is the rate of decline has slowed in recent months and is now at a pace last seen in the third quarter of 2007.”

In the nine-county Chicago region, 17,622 homes were sold in the second quarter, up from 10,507 sales in the first quarter. Chicago-area sales were down 15.4% from 20,827 in second-quarter 2008, the Realtors group said.

In the city of Chicago, second-quarter sales rose 65.2%, to 4,947, compared with the first quarter. Sales fell 21.3% compared with the same quarter last year.

The Chicago-area median price — where half the homes sold for more and half sold for less — was $201,050 in the second quarter, up 7.2% from the first quarter but down 19.6% from the second quarter of 2008.

In the city, the median price rose 7% to $230,000 compared with the first quarter but was down 25.8% compared with second-quarter 2008.

Statewide sales rose 61.8% in the second quarter compared with the first quarter and fell 16.4% from the second quarter last year.

The Realtors group's sales figures include new and existing homes. The nine-county Chicago Primary Metropolitan Statistical Area consists of Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will.

128 East Maple Street, Hinsdale, Price Drop

Courtsey of MLS Connect

This home has another price drop in persuant of a short sale. It started out listed for $1,200,000. and is now dropped to $975,000.00. It is a 4 bedroom, 4.1 bathroom home, built in 2006, taxes are $6820.00. The house sits on a lot size of 50x115. This home is lovely and should sell soon. It is listed with David Ricordati, of ERA Jensen and Feinstein Realty. Plese call 630-464-2633 to see this home.

909 Allmen Hinsdale - A Deal After the Price Drop?

Courtsey of Connect MLS

This is a 5 bedroom, 4.1 Bathroom home on a 85x132 lot. The taxes are $18,256.00. This is a newer home, built in 2003. It started off listed for $1,895,000.00. Since then, the price has dropped to $1,295,000.00. I will be watching this listing to see if the market sees this as a bargain to purchase. I think this property is still overpriced in the current market. For the current list price, the lot size is very small.Listed with Dawn McKenna,Coldwell Banker. Call
630-464-2633 to see this home.

222 E Pearson filed for Foreclosure

Crain’s reports that PrivateBank & Trust Co. has filed to foreclose on the 219-unit conversion Pearson on the Park at 222 E. Pearson in the Gold Coast.

From Crain’s:

The bank alleges that the developer of the project at 222 E. Pearson St., an entity formed by Ganesan Visvabharathy, missed its February loan payment and failed to pay off the $6.8-million loan balance when it came due in March.

Attempts to reach Mr. Visvabharathy, who has a Ph.D. and is better known as Dr. Vish, were unsuccessful. The developer paid $46.6 million for the building in July 2005, when it was an apartment building. He borrowed $52.5 million from Hypo Real Estate Capital Corp. and $7.5 million from American Mortgage Acceptance Corp. to finance the purchase and his plan to convert the apartments to condos.

Those loans came due in August of 2007, and he refinanced the development with a new $17-million loan from PrivateBank. The loan carried interest of the prime rate plus 1%, or 7.25%, whichever is greater, according to a document included with the foreclosure suit, which was filed this month in Cook County Circuit Court.

To secure the loan, Dr. Vish pledged 55 acres of undeveloped land in downstate Mount Vernon and signed a personal guarantee. The loan originally matured last November but was extended to March.

The developer asked for another extension, to March 2010, a request PrivateBank had agreed to consider based on certain conditions, according to a letter the bank’s attorney sent Dr. Vish in April. Now, however, the bank just wants its money back.

Pearson on the Park is 80% sold but Crain’s reports that just 3 units have sold this year.

In recent months, the developer has cut prices in condos at Pearson on the Park by an average of 13%, but it’s unclear whether that will be enough to goose sales in the building. Downtown condo converters sold just 17 units in the first quarter, down from 62 in the year-earlier period, according to Appraisal Research Counselors, a Chicago-based consulting firm.

Streeterville condo conversion faces foreclosure [Crain’s Chicago Business, Alby Gallun, July 29, 2009]

High End Homes Sale are Down

The Wall Street Journal discussed the lack of sales of high end homes today and compares Schaumburg and Kenilworth (and the north shore.)

While it doesn’t mention Chicago’s high end home market, I think it’s relevant enough to quote here.

In the article, one seller in Northfield cut her price by a million dollars and then the only offer she received (and rejected) was for under her 1999 purchase price. The seller ended up renting it out instead.

Will Homedelete be right? Will we go back to 1999 prices?

Sales were up 41% in June in Schaumburg where there was a median income in 2007 of $65,000. Bidding wars have broken out.

“I can’t even tell you how many I’ve been in over the last two months,” says Joe Stacy, a local real estate agent.

But in Kenilworth, with a median income of $230,000, just 13 homes have sold this year leaving 65 more on the market.

“We’re extremely oversupplied,” says Sherry Molitor, a local real estate agent. “Sellers are struggling to realize that we’re back to 2001-2002 prices.”

In another example in the article, a Kenilworth owner bought a 5-bedroom Dutch colonial 5 years ago for $1.3 million using a 25% down payment obtained from selling two prior homes. The husband lost his job in December and took a lower paying one causing the owners to miss one mortgage payment in the spring.

They are now current but local real estate agents told the sellers they would be lucky to sell the house for $960,000, the amount owed on the jumbo adjustable mortgage.

“We’re considered either rich people who don’t deserve help or deadbeats who bought too much house,” says Kelli Kaborl, a 42-year old substitute high school teacher.”I don’t see Washington prepared to deal with us.”

High End Homes Frozen Out of Budding Housing Rebound [Wall Street Journal, Nick Timiraos and James R. Hagerty, August 3, 2009] [subscription required]