North Shore Views
Archive for the 'Real estate' Category
Yesterday I wrote about the odds of selling your Wilmette home depending on its price point.
For Winnetka, you’ll see that the best place to be if you’re a seller is between $700K and $999K, especially between $800K and $899K, where demand actually exceeds supply. So, if you’re selling and your price is just above $1,000,000, you might consider reducing it to $989K to $999K so as to attract more buyers. If you are buying in the $800K-899K you might not be able to negotiate a big discount. Be prepared to make a strong offer if you want the house.
Odds of Selling Your Winnetka Home by Price Point
If you’re planning to sell your Wilmette home, one of the first things your agent will do is run a comparative market analysis (CMA) to help determine the appropriate list price. She’ll look at properties similar to yours that have sold recently and that are currently on the market. Another tool I like to use to provide additional input on pricing strategy is what I call the “odds of selling” analysis.
It’s a quick and dirty analysis comparing inventory of homes in each price band to the number of sales in that price band. Just divide the last three months of sales by the current active listings and you get your odds of selling in the next three months. Unless the market changes dramatically going forward it’s a pretty good way to see how things are moving in the price band in which you are competing.
Odds of Selling Your Wilmette Home by Price Band
In this chart you can see that the best place to be if you’re a seller is in the $700-799K price band, where there is more demand than there is supply, making your odds of selling 137%. The next best place to be is $500-599K (106% odds) followed by $900-999K (100%).
How does it help you to know this? Let’s say your price is hovering just above $800K. You may want to consider coming down to $789-799K to get into a more active price band. If you’re just over $2,000,000, you could improve your odds of of selling by getting below $1,999,999. On the other hand, if you are significantly over $2,000,000, maybe you want to reconsider putting your house on the market, as there are several listings and few to no buyers in this band right now.
If you’re a buyer in the $700-799K or $500-599K range, recognize that a well-priced and well-presented house will sell quickly, so have your ducks in a row so you can move quickly to make an offer. And you may not be able to get a “steal” in this price range. Contrary to popular belief, some houses are selling quickly and with multiple offers. It all depends on which market and which price band you’re in.
I always harp that real estate is local and you shouldn’t get too worked up about what’s going on nationally or even state-wide when trying to get a handle on the real estate market. But even if you are looking at the data for your local area, you probably need to go deeper and look at it by price band if you want to understand how your own home is affected. Here’s why:
In the last three months (June-August) there have been 270 sales of single family homes in New Trier Township (Wilmette, Winnetka, Kenilworth, Northfield and Glencoe). There are currently 512 active listings. You can divide the sales by the listings to get a good proxy for your odds of selling in the next three months. For all of New Trier the odds of selling in the next 90 days are 52%. But if you look at it by price band, you get quite a different picture. In some cases it’s much rosier but in some cases it’s pretty grim.
The best place to be if you’re a seller in New Trier is in the $700-799K range because your odds of selling in three months are 90%. On the other hand, if you are in the upper brackets (over $2,000,000) you can expect your house to sit for a while if you try to sell. There just aren’t many buyers in that price point these days. The most active price point in New Trier is $1,000,000 to 1,999,999. It had the most sales (85 in the last 90 days), but it’s also the price range with the most inventory, so the odds of selling are 53%.
How can you use this data to your advantage? If you are a seller, you may be able to use this information to set your pricing strategy. For example, let’s say your home is priced at $1,050,000 where your odds of selling are about 53%. If you bring your price down to $999,000 or below, you are now in a band where the odds of selling are 82%.
If you’re a buyer looking in the $700-799,000 range, if you see a house you really like, you’ll want to act quickly to make an offer or it may be gone. Case in point, my client looked at a house in Winnetka priced at $775,000. He liked it but wasn’t quite ready to put in an offer. The house was under contract within four days with multiple offers.
Last weekend I had a chance to visit an estate sale conducted by a new firm called North Shore Estate Sales. North Shore Estate Sales is the brainchild of Mike Welsh, an attorney and fellow Coldwell Banker Realtor.
After I got done browsing and buying, Mike was kind enough to let me interview him to learn more about his new business.
Anne: How (and why) did you get started doing estate sales?
Mike: I have been involved with senior citizens and the disposition of estates in one form or another for many years. I am a trial lawyer, licensed in Georgia and Illinois, and one of my focuses has been the legal needs of senior citizens. I pursued an auctioneer in Federal Court a few years ago on behalf of a senior citizen who had hired him to dispose of her mansion full of antiques. He gave her a check for only $21,000 several weeks after the auction which emptied her house. After that experience I realized I really like being the solution to those kinds of problems.
I had a good friend start an estate sale company when he retired from real estate – this was in South Carolina – and I helped him set up the business and worked on sales with him. I really enjoyed the hands on aspect of the sale – bringing value just by being part of the process, organizing, smiling at people, making it work.
Then I started as an agent with Coldwell Banker for a lot of the same reasons – being a solution, making things work. And the estate sales just evolved out of that. I consider the two businesses to be very complementary. First, because I meet a lot of people at the sales that I wouldn’t have otherwise met – which expands the network of people I can potentially find solutions for, both in estate sales and real estate.
Home sales for Chicago’s North Shore were up again in August with a growth of 8% over last year. Median price, however, dropped below $600,000 for the first time.
On a market by market basis, results were mixed. Evanston, which had been showing solid growth in recent months, was down 21% in units and 35% in median price, falling to $397,000. Wilmette, Glenview and Glencoe all showed an increase in units sold, but a decrease in median price. Winnetka was down in units and price. Highland Park showed increases in both units sold and median price for the first time in months.
I’ll give my standard disclaimer here, which is that one month’s data does not always provide a good picture of what’s going on in a market. The numbers can bounce around a lot on a month to month basis. Next month I will post statistics for the 3rd quarter, which will give you a much better idea of the overall health of the market.
North Shore Market Update
August 2011 vs. Year Ago
Wondering what your neighbor’s house sold for? Just email me with the address of the property and I’d be happy to send you that information (caveat: I can only access the information if the transaction has closed. Until then the information is confidential).
Last year I wrote about the North Shore’s 10 Most Expensive Homes for Sale and the list was topped by a Winnetka mansion listed for $28,000,000. The price was subsequently reduced to $23,000,000 and, when it didn’t sell, the home was taken off the market this past June.
Today, the Wall Street Journal reported that the property will be put up for auction on October 29, 2011, with no minimum reserve.
That could be the deal of the century for someone, as the house will undoubtedly go for a lot less than the $40,000,000 it apparently cost to build and furnish.
Owners Sherwin and Deborah Jarol spent almost five years building the 27,000 foot complex on two and a half acres in the southwest corner of Winnetka. Designed by architect-to-the-stars, Richard Landry, and modeled after a French chateau, the home has 26 rooms, a 9 car garage, swimming pool, complete spa with massage room and salon, large exercise room flooded with light from three sets of french doors, a wine cellar with reclaimed stones from a a french chateau, ornate Venetian plaster walls and hand-scraped walnut floors. The home is set inside a walled enclave with several rows of trees planted along Locust Rd. to provide additional privacy.
If this sounds like your dream home you can contact agent Tim Salm of Sotheby’s Jameson International or Concierge Auctions, who will be handling the sale.
Often when my clients are reading a listing sheet for a North Shore property they are interested in purchasing, they will see a comment on the agent remarks section that reads something like: “buyer pays transfer tax” and they ask me what that is. A transfer tax is basically another source of revenue for the town and you can’t close on a property without proof that it has been paid. Usually the tax is calculated as a dollar amount per thousand dollars of the sale price of the house. For example, Wilmette has a transfer tax of $3.00 per $1000. So a home that sells for $600,000 will have a transfer tax of $1,800. Usually you have to show proof that the water bill has been paid in order to get the transfer stamps.
Not all towns have a transfer tax. For those that do, sometimes it’s the buyer who pays and sometimes it’s the seller. Here’s a guide to transfer taxes for the North Shore, as well as nearby towns that have them. For more information call the town hall. The phone numbers are noted in the notes section of the chart.
North Shore Municipal Transfer Taxes
Selling our home is not something most of us do very often, so the rules about the taxes we have to pay on the gain from the sale (if there is one) can be confusing. In a nutshell here’s what you need to know (but please confirm it with your tax accountant!):
1. In general, you are eligible to exclude the gain from income if you have owned and used your home as your principal residence (i.e. your main home) for two years out of the five years prior to the date of its sale.
2. If you have a gain from the sale of your principal residence, you may be able to exclude up to $250,000 of the gain from your income ($500,000 on a joint return in most cases).
3. You are not eligible for the exclusion if you excluded the gain from the sale of another home during the two-year period prior to the sale of your home.
4. If you can exclude all of the gain, you do not need to report the sale on your tax return.
5. If you have a gain that cannot be excluded, it is taxable. You must report it on Form 1040, Schedule D, Capital Gains and Losses.
Home sales on Chicago’s North Shore were up 27% in July over last year. That’s good news, especially since, through June, sales were down 11%. There was a tax credit in place through June of last year, so it’s not at all surprising that this year would not compare favorably. Just nice to see that things are bouncing back. All nine North Shore communities we track showed positive trends in July, with the strongest performance from Kenilworth (up 100% off of a tiny base) and Lake Forest, which was up 59%. Highland Park, whose trends have been abysmal for some time, even showed a nice increase (+52%) over last year.
The pricing picture was not so rosy. Overall the median price for the North Shore was down 8% from last July. The only communities in positive territory were Lake Forest, Evanston and Kenilworth. A word of caution about looking at one month’s prices too closely: with a limited number of sales in one month, just one or two sales can skew the results. Of all the communities, only Evanston has had consistently improving price trends this year.
Market times for homes that sold have been trending down for some time. The only town whose market time increased in July was Evanston, but it has among the shortest market times, at 112 days or just under four months. Days on market can sometimes mislead, as languishing listings are often taken off the market and then re-listed, which starts the cycle over. But in general, as prices have come more in line with buyers’ expectations, houses are selling faster. We are seeing multiple offer situations quite frequently and when homes are priced correctly, they sell quickly.
North Shore Market Update
July 2011 vs. Year Ago
Wondering what your home is worth in today’s market? You can get a quick, over-the-net home evaluation here.
Last September I wrote about the ten most expensive homes for sale on the North Shore of Chicago. Since almost a year has passed, I thought it was time to update the list and have a look at what’s happening at the top end of the market.
North Shore’s Top Ten Highest Priced Homes for Sale
None the ten properties at the top of the market a year ago has sold. Three of them have come off the market: 68 Locust Rd. in Winnetka, which had topped the list at $28,000,000 and was later reduced to $23,000,000; 609 Sheridan Rd. in Winnetka; and 925 Edgemere Ct. in Evanston . The rest are still for sale and all but one has taken at least one price reduction. As a result of these price reductions two of last year’s top ten don’t make the cut this year: 1345 Lake Rd. and 955 Lake Rd. in Lake Forest.
It’s not surprising that none of these homes have sold. It goes without saying that there are very few buyers in this price range, especially in this economy. In fact, there have only been seven sales over $5,000,000 in the last year on all of the North Shore. There are thirty five properties listed in this price range, making the odds of selling in a twelve month period about 20%. The average price of the top ten homes has decreased by over $1,000,000 in the last year, even after removing the $28,000,000 outlier that topped the list in 2010.
All of this year’s priciest properties are in either Lake Forest or Highland Park. Interesting that Highland Park, which has some of the most affordable homes of any of the lakefront communities, also has four of the most expensive.
Since I featured five of the current top ten last year, I’ll just feature the five that are new to the list:
This nineteen room contemporary house was built in 1999 and is located just south of Rosewood Park and Roger Williams Ave. in the Ravinia area. It has 220 feet of lakefront and a gorgeous beach. It also has a 1200 sq. ft. beach/boat house, a racquetball court and a 12 seat movie theater. The master wing is huge, with his and her dressing rooms and baths. Not sure you want to buy just yet? This home’s also for rent, for $19,500/month. You can see more pictures here.
347 Bluff’s Edge, Highland Park – $7,999,000
The list price of this property includes the planned construction of a French Chateau on two acres of lakefront just north of East Westleigh Rd. The house will have approximately 9,000 square feet, with six bedrooms and seven + baths, two terraces, a state of the art kitchen and lake views from almost every room. You can see more photos here.
275 Sussex Lane, Lake Forest – $7,900,000
This French Country home (see photo above) was built in 1914 on two acres in Lake Forest. It has seventeen rooms, eight bedrooms and eight baths (plus 3 half baths). The kitchen and baths have all been renovated. You may spend a lot on the house, but you won’t need to go on vacation. There’s a beautiful pool and tennis court as well as formal gardens to wander in. You can see more photos here.
This historic limestone mansion was built in 1919 and overlooks the ravine conservancy and the lake. It is located on 2.6 acres in Braeside, just north of the Lake Shore Country Club. The home has fifteen rooms, six bedrooms and 5.3 baths and has been meticulously restored. It even comes with a three story elevator. This home is listed in the National Register of Historic Places and designated as a Highland Park Landmark House. If you’d like to try it out before buying, you can rent this home for $22,000/month. You can see more photos here.
327 Mayflower, Lake Forest – $7,350,000
This lovely Georgian house is only fifteen years old but has already been extensively updated with high end finishes and all the latest technology. It sits on 2.3 private acres near Lake Forest College, with gardens, pool and views of the lake (but no lakefront). Inside there are almost 15,000 sq. ft. of living space, with fourteen rooms, six bedrooms and seven full baths (plus three half baths), four fireplaces, an elevator and a wine cellar (complete with tasting room). You can see more photos here.
Looking for your dream home on the North Shore? We can help you, whatever your budget. We are North Shore real estate specialists and one of the top teams in the area. If you would like to schedule a buyer consultation with the Come Home North Shore team, please contact us at 847-881-6657 or send us a note here.