That being said, the latest Illinois School Report Cards for 2008 were published by the Chicago Tribune just a short while ago. The Chicago public elementary schools, as they relate to 60646 are depicted on the map below.

Wildwood
Edgebrook
Onahan
Hitch
Farnsworth
Sauganash
Solomon

You might also be interested in knowing that Taft High School which operates 7th and 8th grades, but mainly receives 8th grade graduates from several of the above named elementary schools, scored a perfect 100% on the 2008 ISAT (7th & 8th grades), subsequently ranking among the top 3 schools in Illinois. Now, 2008 PSAE scores for Taft High is a whole ‘nother issue.

To read the entire 2008 Illinois School Report Card, I direct your attention to the Chicago Tribune.

Welcome to the 114^th edition of the Carnival of Real Estate which is brought to you today from the Windy City. For those of you who are not familiar with the Carnival of Real Estate (CoRE), every week, a CoRE host acknowledges a number of blog posts,  recently authored by primarily real estate and mortgage industry bloggers. Today, 60646 Blog gets to pick the goodies, and we are truly honored to be your host for this week’s edition of the Carnival.

But first things first. In the last few weeks, Chicago baseball fans had been secretly hoping that the Cubs and White Sox would battle each other in the 2008 World Series. The postseason baseball grim reaper had other plans though, and decided to prematurely put an end to our dreams, on both the north and south sides of town. What agony, you might think, but appropriate nonetheless, not only because our two MLB teams choked underachieved when push came to shove, but mainly because we’re only four short days away from Halloween … oh wait, … I think I found our theme for this week’s CoRE.

When it comes to spooky stories, particularly around this time of the year, I am perfectly content getting goosebumps while listening to my young daughter read Harry Potter’s “Prisoner of Azkaban” to me. On the other hand, if bone-chilling topics are more your speed, might I direct your attention to this gigantic conspiracy theory about our financial system by Mr. Jim Willie [via Noah Rosenblatt of UrbanDigs fame]. Of course, I am neither qualified nor inclined to comment on Mr. Willie’s assertations, but like I said, if you’re into “really scary”, by all means, go ahead and read it. But don’t say I didn’t warn you. Needless to mention, that article was not one of the submissions to CoRE this week.

Actually, it wasn’t the number of entries this week that was frightening, rather the above-average quality/originality/substance of the content of several submissions that I decided to present today. Out of a total of twenty entries, six stood out, in my opinion.

In “Trick or Treat, Give Me Something Good To Buy?“, Ro Troia, the good real estate sorceress from the Rockies, encourages home buyers lovingly, but with a stern tone:

… Buyers, wake up, get your butts out there and look at all the fantastic homes that are at bargain basement prices.   Wah wah, you don’t have the down payment, think FHA…

Unless you were referring to single family residences, in which case there is no argument, I’ve gotta tell you Ro, here in Chitown, we sell an awful lot of condos, many of which are ruled by HOAs that reserve a right-of-first-refusal in their declarations/by-laws. That right there, disqualifies these condos from FHA loan eligibilty. Even spot-approvals are a horror to come by, these days. Regardless, I am awarding Ro Troia the “Moontrimmer Broomstick“, for stressing FHA loans as a viable alternative for a mortgage with a reasonable downpayment requirement.

From Burnaby, BC Canada (that’s Vancouver’s backyard), real estate investor, Julie Broad, reminds us that no matter how bad the market is, “Forget The Market - Focus On The Deal“. Sounds like a useful mantra, especially when Julie candidly shares with us:

…I lost money on a condo in Toronto in the hottest condo market phase in history… and it was a good little unit to live in. It’s just as possible to lose money in an up market as it is to make money in a down one…

For offering an upbeat perspective in a business climate in which many real estate investors have been hesitant, if not downright spooked lately, I am awarding Julie Broad the “Golden British Columbia Scythe”. Or is that a hockey stick?

We’ve all heard or read about the government’s recent takeover of Fannie Mae and Freddie Mac, tightened lending guidelines, and slowly but surely vanishing non-conforming loans. So, what are a current home buyer’s borrowing options in this market? In “What sort of loan can I get?” Dan Melson (searchlightcrusade.net) out of San Diego provides a comprehensive answer to exactly that question. Dan confirms what many of my own buyer clients are being challenged with these days:

…Credit Score has tightened up considerably, particularly in conjunction with Loan to Value Ratio. When three years ago, a 620 credit score was good enough to get you 100% financing on a stated income loan (subprime), these days the lenders want to see decently high credit scores. A-paper lenders are wanting to see 680 or 700 credit scores from anything over 80% financing…

Alas, seller financing and “Articles of Agreement” which used to be part of the standard repertoire of RE sales in the 80’s when mortgage interest rates were in double-digit territory, are not the saviors this time around, with so many sellers having dismal equity in their properties. Dan tells us how it is out there in mortgageland, and what you can do to obtain a mortgage in today’s market. For shining a light into the current dark mortgage maze, I’m awarding Dan Melson the “Magic Jack-O-Lantern”.

On a recent road trip through the Northwest, Whitney Tyner with Zillow, encountered some nostalgia. She’ll tell you all about it in “Rare Find: A Sears Roebuck Mail Order House”.

…Sears claimed that their homes would save men 40% of construction time, and promised that a man of “average abilities” could assemble the homes in 90 days. Sears produced over 370 pre-designed home blueprints styles, ranging in price from $500-$3,000. Or, if a family was especially ambitious, they could design the home themselves and Sears would ship off the appropriate materials. Talk about service!…

Now, here’s the thing Whitney, I consider myself to be a man of at least “average abilities” in a number of disciplines, but trust me on this: Sears could not possibly have had me in mind for their target audience when they worded that sales brochure. As proof, I submit the most recent pumpkin that I butchered during “Family pumpkin carving night”. In any event, for taking us all back to a simpler time, Whitney Tyner receives the “Equity-rich Haunted House” award.

“Home Buyers & Purchase Offers” by Sacramento Real Estate Gal Purva Brown, is a meticulous dissection of purchase offer strategy.

…Buyers are usually caught wondering if they should offer full price, or over asking price, if they should try a lowball offer or actually listen to the advice of their Realtor® and send in a reasonable offer which allows room for negotiation and ensures both parties some wiggle room on the negotiation table…

Only three or four short years ago, during the height of the sellers market in Chicago, offer strategy consisted of rushing over to the car right after a showing, and writing up a sales contract on top of the trunk. Then, running back to the listing agent and begging him/her to have the sellers kindly consider “our offer” among the twenty other offers they had already received. Purva methodically lays out the various strategies, along with their pros and cons, for drafting real estate purchase offers. This week’s “Candy Apple” award goes to Purva Brown, for bringing us a real treat.

If you’re familiar with Ardell DellaLoggia’s writing, then you know that Ardell does not pull any punches dealing with controversial topics. You thought you had read every publication about short sales and foreclosures there was under the full moon? Here comes Ardell, knocking on our doors and bringing us “Leave the gun, take the cannoli“. This remarkable post, is a call to short sale and REO practitioners, imploring them to stay in touch with their humanity, even though it’s business (Ardell’s words).

…So when you take out the gun and put it to someone’s head so that you can leave with the cannoli…at least look them in the eye when you’re doing it. Maybe talking someone into doing a short sale is like pulling the plug on someone that was just about to be saved. Think about that before telling people a short sale is their only or best choice…

Precisely because a short sale is not a transaction that could be described as a “piece of cake”, I suppose that most real estate agents haven’t exactly been rushing out in droves to persuade distressed sellers to sell their properties short. But that’s probably something worth discussing with Ardell on Rain City Guide. The last time I checked, that post had already 81 comments. As I hinted earlier, Ardell doesn’t shy away from difficult topics, and I totally dig that, because that’s what transparency is all about: The issues must be debated in a civilized manner, and at the end, hopefully no one returns home, suffering from the onset of a nasty ulcer. For confronting us with “Leave the gun, take the cannoli”, I am declaring Ardell DellaLoggia the “Queen of Halloween”, and this week’s winner of Carnival of Real Estate #114. Chapeau, Ardell.

I thank everyone for their submission, and especially Drew Meyers for the opportunity to be your CoRE host for this week. Be sure to join the Carnival of Real Estate again next week on Monday, November 3, 2008, over at Minnesota Investment Property.
P.S.: Don’t forget to hug your kids, and take them out trick-or-treating on Friday. Happy Halloween.

Image Credits/Attribution (top to bottom):
● Trick or Treat: Jane M. Sawyer, licensed via morguefile.com
● Flying broomstick: Anna Dickie, licensed via morguefile.com
● Halloween cat: John Grunert / Seven Oaks Consulting, licensed via morguefile.com
● Corn maze: eob via flickr.com, licensed under Creative Commons 2.0
● Sears & Roebuck catalog house: dbking via flickr.com, licensed under Creative Commons 2.0
● Office meeting: sectionz via flickr.com, licensed under Creative Commons 2.0
● Queen Charlotte: dbking via flickr.com, licensed under Creative Commons 2.0
● My daughter and her friend who had the bejebeez scared out of them because they had never seen a live/decapitated butler serving candy, prior to last year’s trick-or-treating field trip. Me neither.

This week, CNN reported that 80% of Americans are stressed about their personal finances and the economy, according to the annual survey conducted by the American Psychological Association. And, the most recent series of televised presidential and vice-presidential debates may or may not have made you feel better about the outlook for the housing market, the economy in general, or your personal finances.

Here now comes Ramit Sethi, a recent technology and psychology graduate from Stanford University who offers some straight talk about your money. Ramit’s blog is called www.iwillteachyoutoberich.com, which sounds a bit like a get-rich-quick type of scheme to me, but Ramit is quick to point out that “No, it’s not a scam, I’m featured in the Wall Street Journal, New York Times, NPR and CNBC”. Well, alright then, I’m sold. Moving right along, Ramit offers some “politically incorrect” (his words) thoughts on “The Truth: What Obama and McCain won’t tell you about your money”.

I’m not sure, but after reading Ramit’s article, that 80% figure cited by the American Psychological Association might inch closer to 95% territory. Don’t take my word for it though, head on over to Ramit’s post, and decide for yourself, whether or not his observations hit the nail right on the head.

[via Lifehacker] [image courtesy Nauris]

The methodology of the analysis: All data is derived from MRED (formerly, Multiple Listing Service of Northern Illinois), for closed single family homes between July 1, 2008 and October 3, 2008. I decided to include the first three days of October, because it is reasonable to assume that closings during that time period were originally scheduled for the end of the month (September) - as is usually the case - but were pushed into the first few days of October for scheduling or “technical” reasons, presumably. All closed homes were in 60646, and closed units in South Edgebrook and Gladstone Park were included in the Edgebrook figures. Next year, at the conclusion of Q1 2009, I am hoping to be able to separate the Gladstone Park figures (i.e. any residence in the Elston/Milwaukee Ave.-Bryn Mawr Ave.-Nagle Ave. triangle) from the Edgebrook figures, so as not to dilute the “true” Edgebrook home values. It’s on my to-do list for 2009.

Edgebrook ↓↑

Year-over-year, sales volume in Edgebrook declined by 21% to 33 closed homes vs. 42 in Q3 2007. However, this figure was pretty much on par with the third quarter results of 2005 and 2006. Given the fact that in 2005 and 2006 we weren’t yet dealing with tight credit guidelines and a shortage of mortgage money, in general, I chalk this one up as a win. Not that it would be statistically meaningful, but still, 33 closed homes in Q3 is a 106% increase over the 16 homes that closed in Edgebrook in Q2 2008. Just sayin’… Now, for the bad news: Market times continued to increase, and worse yet, home values declined for a second consecutive quarter, in Edgebrook. The average “Days on Market” figure in Q3 was 127, up 25% versus the same quarter last year. At the same time, the average sale price took a nosedive to $475,370 which represents a decline of 4.1% year-over-year. Gladstone Park figures were negligible in these stats (only 2 closed homes, and one being an auctioned-off new construction) which actually makes these figures scary, from an Edgebrook point-of-view. Of the 33 homes closed in Q3 2008, only 3 were “short sales” and 2 were bank-owned properties, which still leaves us in the dark as to why average home values in Edgebrook are trending downwards. Until you see this chart: Based on what I’m seeing in the above chart, it appears as though Edgebrook home sellers have finally accepted the fact that we are operating in a brutal buyer’s market, in which buyers ultimately determine real estate values (as is the case in a seller’s market). Notice the gap between average list price and average selling price in Q3 2008: A whopping 6.5%! A year ago in Edgebrook, sellers would not part with their homes if buyers didn’t offer at least 3% below asking price, on average. So, while last year’s Edgebrook buyers finally gave in after 102 days on average, time was on the side of Edgebrook buyers in Q3 2008, which also explains why homes stayed on the market almost a month longer on average, ultimately forcing sellers to accept relatively lower offers than last year’s. With 95 single family homes currently for sale in Edgebrook, the absorption rate (months supply of inventory) measures 8.6 months.

Sauganash ↓↑

Third quarter sales volume in Sauganash was a breath of fresh air as well, ending with 21 closed single family homes, beating last year’s Q3 figure by 9 more sales. Even more relieving was the fact that Sauganash came back from a relative sales drought in the previous (second) quarter of this year when only 16 homes closed vs. 20 in Q2 2007. On the home price front though, Sauganash single family homes - as in Edgebrook - continued to suffer from a decline in average value. 22% vs Q2 2007, to be exact. In fact, Sauganash average home values in Q3 2008 were the lowest among Sauganash Q3 figures in the past four years. The fact that the average market time for homes in Sauganash stood at 204 days in Q3 2008, did not help at all. Or, perhaps, it was an explanation for declining home values in this neighborhood. Interestingly enough, neither one of the closed 21 homes in Sauganash in Q3 2008 were short sales or bank-owned properties which might have been an explanation for declining home values. That is even more puzzling, given the fact that there are a respectable number of pre-foreclosure and some REO and auction-bound homes on the market in Sauganash, at the moment. This tells me that the vast majority of short sales in Sauganash either fail to close, or just take an exorbitant amount of time to transfer title. The list price to selling price ratio in Sauganash followed the same pattern that could be observed in Edgebrook in Q3 2008, except in Edgebrook, it wasn’t a trend at all, at the end of Q3. In Sauganash, we’ve been seeing sellers become more and more negotiable, for the past three years in Q3. Again, this can probably be explained as a result of rather long market times, but in any event, Sauganash buyers were able to negotiate average final home prices in Q3 2008 that were more than 2% below the ones in Q3 2007, for an average total of almost 6% below asking price. At present, there are 63 single family homes for sale in Sauganash which translates into a 9-month supply of inventory. Let’s hope this figure drops or at least stays in the single digit, by the time summer 2009 rolls around.

Typically, AT&T installs VRADs on utility easements, as is the case with this VRAD on Mendota. These cabinets are beginning to mushroom in the Chicagoland area, more so in the suburbs than in Chicago. To some, these big boxes are quite unsightly, but in the case of this VRAD in Wildwood, AT&T has done a pretty good job of sort of hiding it behind a tall wooden fence. The neighbor to the immediate north of the easement though, may not be too happy about this VRAD, because he is looking right at it from his property. A similar fence like the one the neighbors on the south have might be the solution to the problem, though. In any event, these VRADs service a geographical radius of about 3,000 feet.

Addendum: If you want to see what the flooding caused in and around the North Park area over the weekend, head on over to “Swedish Colombian’s” Flickr page.

Adding up the figures in the pre-foreclosure, auction, and REO categories by month, we can see the total activity for distressed properties in 60646, since last September. Not sure, what’s going on with the spike in activity last June, but judging by the figures in the chart above, the bulk of June’s activity was due to newly filed foreclosure lawsuits (pre-foreclosures) which may have been the result of resetting adjustable mortgage rates in the spring.

Obviously, RealtyTrac does not break out zip code 60646 by Edgebrook, Sauganash, and Gladstone Park, because they have bigger fish to fry But the image below (courtesy of RealtyTrac) might provide you with a rough idea of the neighborhoods in 60646 where the majority of distressed properties are located. I believe that I’ve shrunk/manipulated this image sufficiently so as to make it impossible to know the exact locations (let alone details) of distressed properties, however, I’m letting you know in advance that if RealtyTrac notifies me that they don’t like what I’ve done here, the image below will disappear from this post. Now that we’ve got this out of the way , here’s what I’m seeing: Edgebrook, with the exception of a few properties in North Edgebrook and Edgebrook Towers, is hardly suffering from foreclosure activity. Sauganash shows signs of a bit more activity, though mostly pre-foreclosures. This is in line with what I’m seeing in the MLS for listed properties in Saugansh: more short sales than bank-owned properties. South Edgebrook and Gladstone Park though show a sizeable number of distressed properties: Mostly pre-foreclosures, but also a respectable number of properties that are headed for auction.

As I’ve written before, if you’re interested in acquiring a distressed property in Edgebrook, Sauganash, or elsewhere in Illinois, contact either my partner Christina Ezzo or myself. We’ll be happy to guide you through the maze.

Mortgage guru Dan Green reminded us a couple of weeks ago that the newly passed Housing and Economic Recovery Act of 2008 is not all just “fun and games”. Aside from the obvious goodies such as the first-time home buyer credit of $7,500 and conforming loan limit increases in high-cost areas, there is a new provision that will change the way capital gains on home sales are going to be taxed (yep, for some of you home sellers, your cheese will be moved).

Thus far, the capital gains exclusion rule has been: If you’ve lived at your principal residence for two consecutive years within the last 5 years, you would not incur any capital gains taxes if your gains didn’t exceed $250,000 (single households) or $500,000 (married, filing jointly). Starting January 1, 2009, the formula for calculating your capital gains tax liability will change to account for a home’s actual usage as a primary residence over its qualified life. Head on over to Dan’s blog where he will provide you with the new formula and with an example of how the new rule might affect your pocket books.

Obviously, in Edgebrook and Sauganash we have a vast amount of relatively high-value properties, so this change might be of interest to you, and possibly even affect you. If you are selling your home before the end of this year, you are exempt from the new capital gains exclusion rule.

This post is not meant to be tax advice, so if you feel that you might be impacted by the new tax rule, please consult with a tax professional.