By: Markus Azadeh • May 15th, 2009 •
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The first quarter of 2009 is in the books. The market stats for 60646 weren’t pretty, as far as residential real estate sales are concerned, but then again, home sales have been down everywhere else. The latest Case-Shiller home price index for Chicago (February 2009) fell by 17.6% year-over-year, and – with the exception of Edgebrook – Sauganash and Gladstone Park home values pretty much fell in line with the February 2009 Case-Shiller figure for Chicago. Gladstone Park average home values fell by 18% quarter-over-quarter, and Sauganash was down *gasp* 43.9%!! My humble attempt at an explanation for this massive Q1 2009 home value fail in Sauganash can be found below. Edgebrook posted “only” a loss of 4.3% on average home values, quarter-over-quarter. I know what you’re thinking now. Yes, it sounds ugly, but we’re gonna have to work our way through this housing mess, and as long as the existing inventory doesn’t get absorbed by bona-fide demand, home prices will continue to decline, everywhere. My professional advice to sellers presently is, if you don’t have a compelling reason to sell your home at this point, don’t put it up for sale. If you must sell your home, you need to face the realities of the marketplace. We won’t sugarcoat anything. We’ll provide you with the data, along with our pricing recommendation. Then, you make the call. On the other hand, if you’re contemplating buying in the current market, I recommend that you read Mary Umberger’s latest Trib column “Buying a house: 5 reasons to do it now, and 5 reasons to wait”.
In Edgebrook, five homes sold/closed in Q1 2009, for a decline of 62% quarter-over-quarter. It wasn’t a good start into the year, so we’ll have to hope that this shortfall in number of homes sold will be made up during the rest of the year.
 Edgebrook Q1 2006-2009 Units Sold As mentioned above, average home values in Edgebrook declined moderately Q-o-Q by 4.3% to $544,300. The median home value jumped by 23% to $615,000. However, please keep in mind that with a total of only 5 sales in the quarter, this figure may not hold much significance. Average market times in Edgebrook were nothing to write home about either, in Q1 2009: 244 days vs. 169 days in Q1 2008.
 Edgebrook Q1 2006-2009 Sale Prices And here’s the amazing thing about Edgebrook real estate values: For (at least) the third year in a row, sellers have not been willing to part with their homes for more than about 5% below asking (listing) price, despite rising market times. In Edgebrook, there have been very few pre-foreclosure listings, and bank-owned (REO) properties which in turn has lead to relatively solid home values.
 Edgebrook Q1 2006-2009 Sale-to-List-Price Ratio As of May 15, 2009 there are 53 single family homes actively for sale in Edgebrook which translates into a 31.8 month supply of inventory. This is a relatively high MSI (Months Supply of Inventory) figure, and I would anticipate that many of the homes currently for sale in Edgebrook, for one reason or another, won’t succeed in finding buyers this year, hence, bringing the MSI figure hopefully back down to single-digit territory. I hope they will sell though. |
A review of Q1 2009 real estate market conditions in Chicago’s Sauganash neighborhood cannot begin without acknowledging that 6 out of the 9 homes sold/closed in this quarter were short sales and REO sales!!! At present, this distressed property problem in Sauganash is nowhere near being resolved. As of this writing, according to Realty Trac’s records, there are 27 pre-foreclosure homes, 7 bound for auction, and 6 REO’s (bank-owned homes) between Peterson and Devon Avenues, as well as 9 pre-foreclosure homes, and 2 REO’s south of Peterson Ave. in Sauganash. This inventory will take some time to work its way through the system, the results of which we probably won’t see until some time in the third and/or fourth quarters of 2009.
 Sauganash Q1 2006-2009 Units Sold Consequently, the average sale price in Sauganash fell to $364,133 which represents a 43.9% decline vs. Q1 2008. At $338,700 the median sale price in Sauganash took even a bigger hit of -46.5% vs. Q1 2008. At 85 days, average market times held steady in Q1 2009 vs. Q1 2008. Rock-bottom pricing on most of the aforementioned distressed property sales likely had a positive (depressing) effect on market times.
 Sauganash Q1 2006-2009 Sale Prices The chart below shows the sale-to-list-price ratio in Sauganash which took a big nosedive in Q1 2009: Sellers (lenders in 2 out of 3 cases) approved a 10% discount below asking price. It’s a typical sign of the times where banks are attempting to get potential “non-performing assets” off their books. In a “normal” market like Sauganash saw even in Q1 2008, more than a 5% concession on the part of home sellers would have been hardly conceivable.
 Sauganash Q1 2006-2009 Sale-to-List-Price Ratio As of May 15, 2009 there are 56 single family homes actively for sale in Sauganash which translates into a 18.7 month supply of inventory. |
This marks the inaugural (separate) review of South Edgebrook/Gladstone Park real estate market conditions. If you recall, at the end of 2008, we decided to separate sales activity in the “SEGP triangle” (South Edgebrook Gladstone Park triangle, hey I think I just coined a new term), because we wanted to avoid mixing these figures with those of Edgebrook, as they’re quite different markets, in terms of housing stock as well as price levels. Alas, I’m afraid that going forward, we may not have enough sales activity in this market to justify a separate review. In Q1 2009, only 3 single family homes sold/closed in SEGP. While this represented an improvement Q-o-Q, it’s still dismal, let alone insignificant, statistically speaking. Of all the neighborhoods in 60646, SEGP is the one with the most multi-unit building (2-4 flats) inventory for sale. In fact, there are twelve multi-unit buildings for sale in SEGP, as of this writing. However, in Q1 2009, not one multi-unit in SEGP sold/closed. In all of 2008, there were only 3 sales of multi-unit buildings in SEGP. And don’t even get me started on condos or townhomes, because that’s not what sells in SEGP.
 SEdgebrook-GladstonePk Q1 2006-2009 Units Sold Average sale price dropped in Q1 2009 by 18% to $310,000 vs. Q1 2008, and median sale price fell by 33.9% to $250,000. Again, statistically not really significant with only 3 sales in Q1 2009 and 1 sale in Q1 2008. Average market time in Q1 2009 was 105 days.
 SEdgebrook-GladstonePk Q1 2006-2009 Sale Prices Sale-to-list-price ratio in Q1 2009 stood at 94.9% which is remarkable, because one of the three closed homes was a bank-owned (REO) property which sold for full asking price. Again, not much sales activity in SEGP, but home values have continued to remain stable.
 SEdgebrook-GladstonePk Q1 2006-2009 Sale-to-List-Price Ratio As of May 15, 2009 there are 25 single family homes actively for sale in South Edgebrook / Gladstone Park which translates into a 25 month supply of inventory. |
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great article you live in a beautiful area 
Fair enough. Thanks for all your work on these quarterly reports and for sharing them. 
Great questions, JB. In my view, there hasn't been any significant correlation between the conclusion of the tax credit and ...
