24 September 2009 ? While the City of Chicago boasts miles and miles of lakefront, very few single family homes grace the shoreline, especially on the north side. But now you too can own a private slice of beach – 56 feet of private shoreline to be precise. The home owned by the family of State Treasurer Alexi Giannoulias, located at 5965 N. Sheridan Road, (map | virtual tour) is currently on the market, listed for $1,990,000. The 3 bedroom, 2 1/2 bath home sits on a lot measuring over 14,000 sq ft. While the brick house could use some updating, the real value is in its truly one-of-a-kind location and private beach rights.

Blue Line Train in the Median of The Kennedy Expressway

The Chicago Tribune posted an article in yesterday’s Business section titled, “Chicago housing prices drop even faster.” In the article there was a graph which posted home prices and their price reductions broken down by neighborhood. The news source for the pricing was Trulia. Trulia is a website where seller’s and agents alike are welcome to post their homes for sale. Same concept as Zillow, Craig’s List, etc.

Granted, prices are dropping in the Chicago land area. We obviously have not hit the bottom of the market. The only way to know we have hit the bottom is when we see appreciation on properties. The problem with the article is that it does use Trulia as a source. Prices may have dropped in certain areas but it does not take into consideration the difference between condos vs single family housing. It also uses the average number. The average number in statics takes into consideration all numbers; this includes foreclosures as well as short sales. These transactions are not arms-length transactions and cannot be accounted for in general real estate sales. A better  number to be used in such an analysis is the median price point. The median is the number that is the most accurate and used by appraisers to adjust for market downturns.

There are many issues with the article that was written. One that I would like to point out is that the typical buyer has no idea what it takes to purchase a foreclosure or a short sale. Both of these transactions can be extremely time consuming and frustrating. One has to define if they are a short sale buyer or not. There are deals to be had all over the city of Chicago. If a property has been seasoned on the market and the seller has reduced their price a few times, that is the indication that they are negotiable. You can pick up a nice property without all the headaches and still get a great deal. This is truly a buyer’s market. If you have a good agent that does their homework, you do not need to deal with foreclosures or short sales.

I do agree that sellers need to be realistic with their listing price. A property may have been worth $100,000 more two years ago. What everyone needs to understand is, it is no longer two years ago. People change and prices rise and fall. Property values have certainly declined from two years ago. The only way to determine what a property is worth is to put it on the market and find out what a “typical” buyer will pay for that property. That is the true value.

We’d like to thank Andrew Ciscel for generously sharing today’s photo via the Creative Common’s License.

6 July 2009 ? Don?t look for this week?s print edition of Crain?s Chicago Business. The publication has gone from a weekly to a biweekly print publication. The publisher is saying this is just for the summer months. This is another major sign of the transition of the newspaper industry transitioning from print to an online media. In the last months, the print issues have become very thin as a result of declining advertising revenue. At one time most of the major real estate brokerages would take full page ads on a weekly or monthly basis to advertise upper bracket properties, but the industry is now focused on online media for both brand and listing promotion.

Sunset On North Avenue in Bucktown, Chicago

Have you read the latest news that home sales are down? Pretty much everyday, right? According to Standard & Poor’s Case-Shiller Home Price Indices (PDF), released on Monday, Chicago experienced an 18.7% decline in home prices from April 2008 to April 2009, but did not experience a percentage change from the prior month, March 2009 to April 2009.

This information is interesting, but begs two questions for me:

1. What neighborhoods of Chicago do these stats encompass; and are they relevant to the neighborhoods where my clients are selling and buying?
2. In this rapidly-changing economy, statistics from two months ago is ancient history, so what are the most recent sales in May and June of this year?

Let’s Dig Into the Sales Data More Closely

I am definitely a numbers gal, so I decided to pull information from the Multiple Listing Service (MLS) on the areas where my clients are doing business and see what stats would be of value to them. I picked three neighborhoods that have a great mix of condos and single family homes, and seemed like a decent representation of averages for the north-side of the Chicago marketplace. The areas I selected are Lincoln Park, Wicker Park/Bucktown, and Lincoln Square.

Here is what I found when I compared the volume (number of homes sold) and the average selling price data from the first half of 2008 with the first half of 2009:

Lincoln Square and Bucktown/Wicker Park Home Sales Volume Way Down

As reflected in the tables above, the average volume of sales, not surprisingly, are down with the hardest hit being the condo market in Bucktown/Wicker Park (-56%) and Lincoln Square (-52%). In the single family home market, Lincoln Park experienced the greatest decline at -36%.

Lincoln Park Condo and Single Family Home Average Sale Prices Are Up

Surprisingly, the condo and single family home sale prices when comparing the first half of 2008 and the first half of 2009 in the Lincoln Park neighborhood increased 3.6% for single family homes and 5.2% for condos. Lincoln Square reports a depreciation in sale prices at -18.7% for single family homes and -16% for condos. Bucktown/Wicker Park : -11.9% for single family and only -1% for condominiums.

North Side Sales Prices Have Decreased Far Less Than the Numbers Reported by S&P

Overall the average decline in sale price for all three markets for the first half of 2008 to the first half of 2009 is -5.5% for single family homes and only -2.6% for condos. A significant difference from the 18.7% decline reported; and a better reflection of what is happening currently in the marketplace within those three neighborhoods.

As the Realtor? advertisements market in their most recent campaign ad, markets are local, and statistics like these are not necessary a reflection of the block where you live or want to live. So consult with your real estate agent about current appreciation and depreciation in the areas that interest you?these numbers are easily gathered and analyzed, so don?t be afraid to ask?it?s interesting what you can learn when you dig a little deeper.

Take comfort home sellers! Celebrities are having the same problem as we common folk. Here are some celebs who can?t seem to sell their houses:

Even Elle Can't Sell Her House

• Jon and Kate Gosselin, co-stars of the popular TLC show “Jon & Kate Plus 8,” have been trying for three months to sell their former home in Elizabethtown, Pa.
• Talk show host Regis Philbin put his Greenwich, Connecticut home on the market last summer. Purchased in 1992 for $2.5 million, Regis was originally asking $5.4 million for the home but has now dropped the price to $4.9 million.
• Rapper 50 Cent has given up selling his mansion in Farmington, Connecticut., after dropping the price from $18.5 million to $14 million.
• Nicolas Cage?s Los Angeles vintage Tudor was once home to both Dean Martin and Tom Jones. Cage purchased the home in 1998 from Jones for $6.469 million and has been trying to sell the home off and on since 2006 when it was listed at $35 million. It is now listed at $19.75 million.
• Richard Gere and wife Carey Lowell have dropped the price on their New York?s Hamptons home from $8.8 million to $7.2 million.
• Model Elle Macpherson (AKA “The Body”) cut the price of her London Victorian from $9.5 million to $8.5 million, and has since dropped it to $7.5 million.
• Star of “Real Housewives of Orange County” on BRAVO TV Jeana Keough, also a real estate practitioner, is facing foreclosure. (Yikes!)

Are you pulling a dinosaur behind you while trying to sell your home?

Is your real estate agent evolving or are they a dinosaur? And you know what happened to the dinosaurs?

• The bulk of their explanation of their marketing of your home is connected to the MLS and print ads.
• The rest of their presentation talks about Realtor.com, their company’s web site and bundle the rest under ?all the others.” They think they can get away with simply stating it will be ?on the internet?.
• When you are not getting offers or activity they talk about canceling the MLS listing and how it will “refresh” the listing when in the realty is it no longer fools the agent or the consumer. It just irritates both of us.

The tools of marketing of a property have changed over the years as the consumers (potential buyers) have. Many of the listing agents say they have embraced the methods but how could they when they clearly don?t understand exactly how information is reaching the buyers?

Marketing Techniques Constantly Change

It?s constantly educating one?s self by attending seminars, webinars, and Internet searches. Where I get my best stuff from is the shared information amongst my piers. Although the major brands all have unique but extensive interactive marketing programs that distinguish one broker from another, the true optimization of a listing is done by the agent who knows how to use what the brand offers and then take control of their own listings.

The discussion a listing agent should have at a presentation should include keywords like syndication, SEO, and social networking. Tomorrow this list will likely change. Interactive marketing is a fluid medium. Every day I find new tools or improvements to services I am currently utilizing. This affords me the ability to enhance the marketing I am offering my clients on an ongoing basis. How we service our listings can no longer be services limited to a presentation updated by the brokerage periodically. The ability to grow with the dynamics of the medium differentiates one agent from another.

When agents say they did not get a listing or lost a listing because of marketing, it?s almost always because they think by being in the MLS or fed to their company?s website they have done their job in marketing a listing. This is the agent that is still talking about Sunday?s ad in the newspaper (is there still such a thing?) and does not know how to overcome talking about advertising that is obsolete.

Where are the consumers going? How to you get the information to find them? What websites are relevant in the home search in your marketplace? That is a discussion for the next post.

We would like to thank Mykl Roventine for so generously sharing today’s photo via the Creative Commons License.