Realty Freak

Market Time Doesn’t Matter

Question:
How long does a property have to be de-listed from the MLS before it can be re-listed as a new listing? Also, I've heard that most realtors consider the weekend after the super-bowl to be the start of the spring market for Chicago, but I'm skeptical; this sounds a bit early to me. I'm considering listing my SFH in lakeview and know that it will show better when the backyard is at least starting to get in better (post-winter) shape. I'm trying to balance possible detrimental effects from a long market-time vs. my desire (but luckily no necesity) to move.
-Joe

Answer:
Much  research has been done on the effects of market time and sale price and the empirical evidence is clear, there is no effect. (See my whitepaper ) You need to concentrate on price, so your real question should be “how long until I know I am at the wrong price“.  We use a proprietary algorithm to help our clients with this question.

Research also shows that you are likely to receive a higher price for your property in the dead of winter than in the spring, so you are very close to missing that window.

My advice, don’t let your yard or market time become a distraction to the real issue, price.

To learn more about market time and pricing visit our Chicago, Highland Park and Deerfield Real Estate office.

Fighting Words

I was challenged by a developer shill to back up my “wild-eyed assertion“ that  assessments on new  condo construction tends to rise dramatically after the developer releases the building to the association. 

Here it is:

In 2003 the average monthly assessment on a two bedroom two bathroom at Optima Views (a condo building in Evanston, IL) was $238. By the end of 2006 the average assessment is $370. That is a 36% increase in just three years.

For the record, I like Optima, Inc, they build a good product and have a good reputation. That however doesn’t change the fact that a buyer will pay a huge premium for purchasing a new unit, one I think is seldom worth the benefit of “new”.

To find out how we can help you use science and data to make informed decisions visit our Deerfield and Highland Park real estate office.

What Does "Rent to Own" Mean?

"Rent to Own" is one of those catch all phrases that has no real meaning.  What people are referring to with the phrase rent to own is either an agreement to rent with an option to purchase or rent with the right of first refusal.

Renting with an option to purchase means that at the end of the lease you will have the option to purchase the property, at terms agreed to at the beginning of the lease, before the property can be offered to any other buyer.  In this agreement both sides are hedging that the value of the property will be lower or higher when the option is exercised.  A market where prices are likely to decline is beneficial for the seller, a market where prices are likely to increase would benefit the buyer.

Renting with a right of first refusal means that if during the term of the agreement the owner chooses to sell the property, the owner must present the terms of his choosing to you before any other buyers.

Typically, the renter pays a premium for an option or a right of first refusal.

Without a written agreement for an option or right of refusal "renting to own" is just renting.

Visit our Highland Park and Deerfield Illinois real estate brokerage for help on renting and buying residential real estate.

Lincolnwood the Big Loser?

I have been telling people for years that Lincolnwood was way overvalued, looks like I was   right.

The median sale price in Lincolnwood is down 40% in the last 12 week period versus the previous 12 week period and the number of units sold is down 12%.
 
Evanston's median sale price is only down 18% and the number of units sold is down 38%
 
Skokie median sale price is only down 10% and the number of units sold is down 37%
 
The median sale price in Morton Grove is UP 11% with the number of units sold down 21%
 
You can see how poorly Lincolnwood is holding it's value compared to Evanston, Skokie and Morton Grove.  Additionally I don't think Lincolnwood is going to recover as fully as the surrounding suburbs will when the market starts to improve.

Response to Why Does NSBAR Hate Home Rule?

Part of  being transparent involves making all information available, even when you don't agree with it.  As Joseph Joubert said; "It is better to debate a question without settling it than to settle a question without debating it."  The following is from Terry Penza, CEO of NSBAR.

Yes, you are correct – nothing has changed at the Recorder’s office – they are still going to record deeds without the transfer stamp because they have determined Highwood’s zero dollar transfer stamp is unlawful. 

You are also correct that Highwood is arguing that referendum is unnecessary with a zero dollar transfer stamp.  However, IAR’s legal counsel disagrees, and so did the Lake County State’s Attorney when they advised the Recorder who ultimately stated: “Highwood has not complied with Section 8-3-19 of the Illinois Municipal Code (65 ILCS 5/8-3-19)  which provides that home rule municipalities may only impose a transfer tax after submitting such tax to the municipal voters via referendum.”

In regards to standing with the Dolton and Calumet City cases – the issue of REALTOR Association standing is a bit more complicated than you state and largely procedural.  The Court has continuously found our cases have merit and have issued favorable rulings along the way.

While it may seem unbelievable to you that a municipality would try to prevent the transfer of property over cosmetic or other dubious reasons – it has indeed happened. 

Whether or not you believe business interests should be involved in public policy will not be solved between us.  However, please understand that we do not “dictate” policy.  We provide and advocate our position on issues, but ultimately it is the elected officials that make the policy.

In fact, many elected officials appreciate our input especially as we can offer expertise and insight on real estate related issues.  Local elected officials are not full-time positions.  Most of the officials hold other jobs and come from varied backgrounds.  They are not nor cannot be expected to be experts in every field.

Our right to weigh-in on issues has not only been part of the American political process since America’s inception, but is constitutionally protected.  NAR and IAR commit large resources to addressing nearly all aspects of real estate related public policy, and that does not seem likely to change in the near future.       

Highwood Deserves Unhindered Home Rule

Below is a response from the CEO of NSBAR to my last post asking why the NSBAR feels the need to interfere with the home rule of the City of Highwood. 

My response to her is as follows:

I personally contacted the office of the Recorder of Deeds and this is what the assistant recorder told me; "nothing has changed at this office... we will continue to accept deeds with the stamp until the States Attorney's office instructs us to do otherwise".  In any case, the legality of the zero dollar transfer stamp is largely procedural and ultimately a straw man argument.   Transfer Stamps are legal, the question is,  does one that has no "tax" need to pass by referendum or not.

I couldn't find any information on a lawsuit with the city of Dolton but what I found about the Main Street Association of Realtors is telling.  That case was dismissed because the court found the Realtor association had no legal standing, and that is my point.  Government is for the people, by the people, for-profit businesses should not interfere.

What NSBAR and other Realtor associations are doing is no different than oil companies trying to dictate energy policy, insurance companies trying to dictate health policy, or car manufactures trying to dictate auto safety standards.  Yes, I know this is (unfortunately) legal, but I think current events have shown corporate lobbying to be if not unethical, at least bad for individual citizens.

And Terry, given how slippery a slope would be needed for a municipality to prevent the transfer of a property because of cosmetic appearances; I think it safe to say I will not be thanking the NSBAR for raising a red flag on the issue.

From Terry Penza, CEO of NSBAR:

The Highwood official misinformed you when he or she said the State’s Attorney office is unsure if Highwood’s zero dollar transfer stamp ordinance is permissible.

In fact, the Recorder of Deeds, advised by the State’s Attorney’s office, was quite clear in their opinion. The Recorder’s letter to Highwood states: “Highwood has not complied with Section 8-3-19 of the Illinois Municipal Code (65 ILCS 5/8-3-19) which provides that home rule municipalities may only impose a transfer tax after submitting such tax to the municipal voters via referendum” and “any extra-statutory attempt by a municipality to exert direction over a county officer, such as the recorder of deeds, exceeds a home rule municipality’s limited authority to regulate issues pertaining to its own government and affairs.”

Whether or not you are a supporter of home rule or not, I am sure you share the belief that local units of government should not violate state law.

This is an issue not being just addressed by NSBAR, but by a number of other local Associations as well. REALTOR Associations throughout the state are constantly finding that local municipalities are attempting to use the transfer stamp as a means to prevent the transfer of property for dubious reasons.

This was the basis of a Main Street Association of REALTORS initiated lawsuit against the cities of Calumet City and Dolton – the lawsuits have been successful.

Therefore, while it may not be a concern to you now, when a municipality attempts to prevent the transfer of property on your client’s home because the municipality wants your client to make cosmetic improvements to the home or deconvert it from a multi-unit property to a single-family home, you and your client will also likely be thankful that NSBAR raised the red flag on this issue.
Terese (Terry) Penza