By: Markus Azadeh • August 5th, 2009 •
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The latest S&P/Case-Shiller home price indices were released last week (pdf-file), and the findings for Chicago were as follows: a 1.1% home price increase from April 09 to May 09 and a 17.5% price decline when comparing May 09 to May 08. Needless to say that Case-Shiller’s findings seldom match up with what we find home values to be in zip code 60646, and that’s not only because Case-Shiller don’t track home values on a quarterly basis. Judging by the blogosphere’s commentary, the latest Case-Shiller figures seem to be the strongest in nearly three years, however, in large metropolitan areas such as in Chicago, where we might be interested in specific neighborhood stats, Case-Shiller figures aren’t really helpful.
If you recall, in Q1 2009 we ended up with a sale of only 5 homes in Edgebrook, and my hope then was that we’d stage a come-from-behind type of sell-a-thon the rest of the year to make up for this low figure. Well, it hasn’t quite happened, although with 18 homes sold in Q2 2009 we did a bit better than the same quarter last year, in Edgebrook. Luckily, the year is not over yet.
 Edgebrook Q2 2006-2009 Units Sold Here’s the good news: In Q2 2009 the average home value in Edgebrook was 6% higher than in Q2 2008, and the median home value … wait for it … was even 15% higher, quarter-over-quarter. More good news: The average market time sank from 199 to 189 days in Q2 2009 vs. Q2 2008. Now, you’re probably thinking “ridiculous”, but hey, at this stage of the game, I’ll embrace ANY good news on the market conditions front, no matter how small it may be.
 Edgebrook Q2 2006-2009 Sale Prices Here now, comes a little bad news: The average sale-to-list-price ratio took a bit of a hit in Q2 2009. It stood at 90% which means that 18 Edgebrook home sellers were willing to part with their homes for 10% below their average asking prices. Just in the last quarter (Q1 2009) I was impressed with how this figure in Edgebrook refused to go below 95% (well, 94.9% actually) but I guess in this economic climate and buyers’ market in general, one needs to do what one needs to do, in order to accomplish one’s real estate goals.
 Edgebrook Q2 2006-2009 Sale-to-List-Price Ratio As of August 5, 2009 there are 64 single family homes actively for sale in Edgebrook which translates into a 10.7 Month Supply of Inventory which is an absorption metric that’s pretty close to single digit territory, as I had hoped for at the end of the last quarter. |
In Q1 2009 Sauganash had a slight distressed property problem, where two thirds of all closed homes were either short sales or foreclosures. In Q2 2009, this was no longer the case. To be sure, with 12 closed homes in Q2 2009, we’re still far removed from the glory days of real estate sales in Sauganash. But of these 12 homes, only one property was a distressed sale. Insert a little shameless self-promotion at this point: I was actually responsible for the sale of the most expensive home in Sauganash in Q2 2009.
 Sauganash Q2 2006-2009 Units Sold Sauganash average and median prices in Q2 2009 were down 7.5% and 5.9% vs. the same quarter last year, and the average market time increased to 266 days, quarter-over-quarter. Ouch!
 Sauganash Q2 2006-2009 Sale Prices More bad news about Sauganash market conditions: The average Sale-to-List-Price Ratio continued nosediving to 92.2% in Q2 2009. Still better than in Edgebrook though, and testimony to the fact that the distressed property problem in Sauganash – while not yet completely resolved – is slowly but surely being overcome.
 Sauganash Q2 2006-2009 Sale-to-List-Price Ratio As of August 5, 2009 there are 60 single family homes actively for sale in Sauganash which translates into a 15 Month Supply of Inventory. |
Market conditions in Chicago’s South Edgebrook and North Gladstone Park were nothing to write home about either, in Q2 2009. Four homes sold which is exactly one more than in Q1 2009, and on par with Q2 2008. Less than half the amount that were sold in Q2 2006.
 SEdgebrook-GladstonePk Q2 2006-2009 Units Sold Average and median home values were down 6.2% and 5.2% respectively quarter-over-quarter, but again, with four units sold, I don’t know if there is any statistical significance to these figures. The good news: Vs. Q2 2008 (210 days), the average market time in Q2 2009 dropped down to 90 days which is actually a “normal” figure. The explanation for that might be in the last graph.
 SEdgebrook-GladstonePk Q2 2006-2009 Sale Prices Average Sale-to-List-Price Ratio in SEGP followed suit with Edgebrook and Sauganash in Q2 2009 and stood at 90.2%. This means that this year in SEGP, four buyers got relatively better deals than four buyers around the same time, last year. It could also explain why market times decreased to 90 days, on average.
 SEdgebrook-GladstonePk Q2 2006-2009 Sale-to-List-Price Ratio As of August 5, 2009 there are 21 single family homes actively for sale in South Edgebrook / North Gladstone Park which translates into a 15.8 Month Supply of Inventory. Also, in SEGP, currently there are 19 multi-unit buildings (2-4 flats) for sale, between $300,000 and $590,000. |
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Are there any specific home sales that are skewing the 2nd Q percentage of asking price stats? I want to say there was one home, perhaps on a main drag somewhere, that went for 50k less than asking price. With a low number of sales, one seller’s new grip on reality could affect the numbers greatly. The inventory numbers are great news, but look like they might be creeping up again in the past month.
In Edgebrook, the “renegade” was probably 6919 Caldwell with a LP/SP difference of $165K. Then there were 6643 Hiawatha and 6585 Tahoma with a $75K diff, 7037 Mendota ($74K diff), 6937 Chicora ($65K diff), and 6624 Loleta ($67.1K diff). The lowest LP/SP difference in Edgebrook was for 5466 W Lunt at $17.9K. Everyone else sold at least $23K below asking price. So, to answer your question, in Edgebrook, all home sales were pretty much collectively responsible for the 10% diff between average LP and average SP in Q2 2009.
In Sauganash, there were three sales out of the twelve that may have skewed the figures a bit: 6100 Keating with a $52.5K diff, 6312 Karlov ($99.9K diff), and 5735 Kostner ($150K diff). The latter one at Kostner was the one where we represented the buyers. Both, Kostner and Karlov had been on the market for almost 2 years, hence, the respective sellers’ decisions to sell at a big discount was understandable. But again, overall in Q2 2009, in Sauganash most home sales contributed to the almost 8% gap between avg. LP and avg. SP.
Inventory figures in Edgebrook have actually not been too bad at 10.7 MSI (Months supply of inventory) vs. at the end of Q1 when they were at 31.8 MSI. Quarter-over-quarter, Sauganash had a slight improvement in inventory levels as well at 15 MSI vs. 18.7 MSI. We might see a “mini surge” of inventories at the end of Q3 this year which is all the inventory that was unsold over the summer, and will then be taken off the market to return probably in the spring of 2010.
Yeah, sorry I meant 150k (and I was speaking of Edgebrook only — but thanks for the info on the other neighborhood) … That Caldwell house had been on the market so long at the same price — it should have probably been stepped down to the mid-300s (or started there in the first place) by the time it finally sold. It’s like the house on Wildwood with no backyard that was listed at 499 forever — it’s finally come down a couple of times to 419, but even that ship has already sailed now. Of the other homes you mentioned in specific, Tahoma was definitely a major fixer that does have some character–sort of a special circumstance where maybe they were hoping someone would fall in love with the architecture (and location, if you like trains rattling your floors). A couple of the others look like nice homes that were overpriced, but the sellers wisely took the first decent offer that came around. In the latter cases, it doesn’t seem % of LP is a negative … the sellers rolled the dice on a high opening price, but were willing to give when the lowball offers came in. In Edgebrook, it seems to be a balanced market — there’s just a little desperation on both sides: the sellers who really want to sell and the buyers who really want to buy. Would love to hear your perspective on 6784 Keota once it closes — originally listed at 537, finally under contract at 399. That original price was set by someone with $$$ in their eyes. They couldn’t see the home’s dismal condition or the market conditions of the past two years.
6919 Caldwell was actually a short sale, but judging by the mortgage balance, the lender apparently didn’t take too big of a hit, even by selling the property for $165K below asking. Which explains why they agreed to a short sale in the first place, rather than settle for a foreclosure.
Home sellers in Edgebrook (for the most part) know that they live in a very desirable city neighborhood, for which there is always demand. So even if home sellers in Edgebrook price their homes a little above what the market bears, there will be offers. Case in point, 6585 Tahoma which was on the market only for 64 days.
6784 Keota is still under contract, as you said JB, hence, I am not going to comment on it, in any form.
Re: Caldwell … The listing never appeared to reveal the fact that it was a short sale, so I guess that explains the strange pricing and the information about the loan amount then explains the deep discount the bank accepted. Tahoma was actually on the market as a FSBO for a big chunk of 2008. I believe it was 549 the entire time, but they may have lowered to 525 at the end. It was already vacant then. Sorry to jump the gun on Keota.
The function of the “Remarks” section in the MLS used to be to provide the listing broker with a space in which they could expand a bit on property info, beyond your customary 3 BR, 2 BTH, LR, DR etc. Prose, if you will. When MLS info went on the internet some time in the middle of the last decade, the remarks in the MLS remarks section became public info. Many agents, to this day, don’t realize that what they write in that section can be read by the public, because listings get syndicated to Realtor.com, as well as to the Zillows and Trulias of the world, among others. The MLS has another field exclusively reserved where a listing agent could communicate a fact to other MLS participants privately, such as a property being a potential short sale. Some agents though, use the regular remarks section to indicate a potential short sale.
Tahoma was actually an estate sale, hence the vacancy. The heirs may have simply wanted to get the sale of the house behind them, therefore agreeing to a $75K discount from asking. Makes sense after having been on the market unsuccessfully as a FSBO for a long time. Pure speculation on my part though.