There are 6 comments thus far. »

1. 

   Comment by JB on 20 August 2008:

   I appreciate the numbers you are able to compile, and I understand that they are all you have to work with. But I wonder how valid the statistics for the second quarter are when you are dealing with such a small sample.

   In Edgebrook, the average sales price seems to be dragged down by some real “dog” houses that happened to close during the most recent quarter — 6794 N Keota and 6332 N Leroy, for example.

   Shortly after these closings, I did see some other houses in better condition begin to come on the market at lower than expected prices, so there has been some give among some sellers.

   But I will be interested to see if the third quarter numbers show a rebound since few “dogs” have gone under contract in recent weeks — mainly because they’re all still overpriced. Again, thanks for your efforts.
2. 

   Comment by Markus Azadeh on 20 August 2008:

   Hi JB,
   The numbers are what they are, although 16 closed sales do allow for a glimpse into the “housing value structure” of a neighborhood, imho. Remember, appraisers usually only require two or three additional comps to arrive at the value of a particular subject property.
   Having said that, I will concede that my stats for Edgebrook have traditionally come in somewhat lower than one would expect, because I also include the stats for South Edgebrook and “south/southwest of South Edgebrook” (=Gladstone Park). Property values in these areas of 60646 are relatively lower than say, Old Edgebrook, Middle Edgebrook, Wildwood, or even North Edgebrook. However, in Q2 2008, there were only two properties that closed in (technically) Jefferson Park: 5720 N Mason at $225K and 5917 N Manton at $287.5K. These two were (not surprisingly) at the low end of the stats. For arguments sake, let’s remove these two and the two highest sales in Edgebrook in Q2 2008 (6257 N LeMai at $535K and 6860 N Wildwood at $765K), and you’ll arrive at an average sale price of $430,742 and a median of $434,450. That’s about $5,600 less on average and still a $434,450 median. Not a significant difference on 12 sales.
   6794 Keota was a “fixer” whose final list price was $369K and ended up fetching $320K. Not a bad deal for a Wildwood location, even though it’s close to the Metra tracks and Lehigh Ave. 6332 N Leroy in Middle Edgebrook is pretty much a similar story: An estate sale, listed for $399K which sold for $$370K. A Georgian (2-story) style house in Chicago that needs work for $370K??? Yep. Not bad for a “dog house”, as you put it.
   The problems are not the fixers JB, because fixers will eventually be fixed and end up contributing to the rise in neighborhood values. The problems are short sales which are starting to creep into our market (more so in South Edgebrook and Gladstone Park and even in Sauganash than in Edgebrook). As Realtors, not too long ago, we used to dismiss short sales and foreclosures in our market analyses as transactions that aren’t at “arm’s length”, hence not comparable. As we see more and more of these daily, guess what: Now they are comparables.
3. 

   Comment by JB on 20 August 2008:

   Good points all.

   Since you include South Edgebrook, do you think that closings in Edgebrook Glen had helped to keep your averages higher in previous quarters. I would assume if $535K was #2 in Q2, there were no new-home closings there.

   I am surprised to hear 6257 LeMai was that high and #2 in the whole neighborhood — that was a partial fixer, too. I think that buyer overpaid. But generally, I feel it’s the fixers that are brining the averages down. In addition to the 370K and 320K sales mentioned above, there was the Navajo house that came in at 332K. Just a year or two ago, there were homes on Legett and Loron that went for 400K each — I believe to flippers. Those guys are on the sidelines now, so similar houses are slipping well into the 300s. And you’re right that short sales and foreclosures will be the real tipping point if they arrive in the heart of Edgebrook/Wildwood. For now it seems that they are mostly on the fringes — Caldwell and Touhy addresses, where the buyers were probably straining to get into neighborhood to begin with.

   Thanks again
4. 

   Comment by Markus Azadeh on 21 August 2008:

   Edgebrook Glen sales haven’t really played a big role in my stats, at least not in the 2008 figures. According to MLS data, 3 sales were recorded in this subdivision almost exactly one year ago at 5232 W Seminole ($813K), and at 5701 and 5705 Lockwood for $724K and $740K. There is one listing in the MLS at the moment at 5242 W Seminole for $750K that indicates that this house shall be sold at a sealed bid auction on 8/24/08. The developer, CA Development, has been reducing prices drastically in this subdivision. That is not to say that they haven’t sold more homes there, but perhaps just not through the MLS.
   Also, keep in mind that alot of the housing stock in Edgebrook has not yet been rehabbed, relative to say, Lake View or Lincoln Park. But as more and more buyers “discover” this neighborhood with its suburban characteristics, they don’t mind buying fixers and paying a pretty penny for them, which goes back to the old adage of location, location, location.
5. 

   Comment by JB on 27 August 2008:

   the return of the flippers ….

   well just when I mentioned that speculators were out of the market, I see at least one recent new offering that indicates they are back in Edgebrook.

   6285 N Caldwell, a foreclosure that looked like it got a classic strip job as the foreclosees went out the door, was recently on the market at a little under 300K. The recent contingent sale closed, and now it’s back on the market at 549K with “needs work” still buried in the description (perhaps erroneously — I would hope so considering that price on a main street)

   Then there’s the story of 5925 W Touhy, which closed in March at 417K and is now back on the market at 459K. The MLS listing says it’s a short sale, but the recorder of deeds lists the financing on the property at the same 417K as the sale price (who says no one does 100% financing anymore ;)?) So is this a flip? Will be hard to pull off, since there are three other houses on the same busy block with listing prices under 400K. No wonder some say short sales aren’t always the best deals.
6. 

   Comment by Markus Azadeh on 27 August 2008:

   JB, I’m not kidding you, but I was just going to add a comment here about 6285 N Caldwell, which came back on the market as a flip. You beat me to it. Telepathy? Anyway, I wish them good luck, but it might be challenging, as far as the appraisal.
   Re: 5925 W Touhy, not sure if it’s a flip, but again, good luck getting this one appraised, because the previous owners bought it on 2/27/07 for $319K and, as you wrote, sold it for $417K a year later. Perhaps the current agent mentioned a short sale, anticipating that the property might fetch well below what’s owed, once it’s sold.
   Btw, 100% financing can still be had at the moment, provided that one doesn’t need it
   Short sales might be good deals for some buyers, if they’re not in a hurry to move or don’t mind waiting for an answer from the lender.

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