Sober Thoughts About Economy
As the housing market and the domestic economy bottom out in various locales many of our fellow Americans are saying “bottoms up.”
And though they may not be saying “cheers” as they drain the contents of their mugs, shot glasses and snifters, they are maintaining a steady course of imbibing.
While budgets have been trimmed and belts have been tightened, the American propensity for the tail of the dog that bit them has not diminished. True, some consumers may go down a shelf or two from the top shelf brands when they go out. And others are choosing to enjoy a cold one at home. The point is that spending on booze in not under the influence of cutbacks and rollbacks.
Now bear in mind this is not the stuff of a dissertation. But summing up the sentiment is a spokesman for The Nielson Co who says - “A lot of consumers would still consider alcoholic beverages as an affordable indulgence.”
When I mentioned this article to my soon to be three-year-old son Jackson he simply rolled his eyes as if to say, “What did you expect?”
I guess he’s right. But for my part my beverage of choice for the foreseeable future will remain Coca Cola. And while media mavens keep talking about the housing bubble I will contemplate the fizz of my soft drink as I continue working with my buying and selling clients in the Chicago real estate market.
Out of Town Condo Buyers Coming to Chicago? No problem!
My clients in DC have identified where they want to live, how much they are willing to pay, and the type of condo they wish to purchase in Chicago. Heck, they’ve even specified the building that works best for them.
The thing is, after they left town, a couple of units have hit the market. Rather than pretending that these units don’t exist. And instead of shrugging our shoulders I am cluing my clients in as to what these places are like through the medium of video.
You may not be in the market for a condo in an elevator building, but you may be interested in the services of a Chicago real estate professional who is not only interested in you selecting the place that best works for you but also employs the means of ensuring you have the opportunity to include that new place in your considerations of a new home.
Anyway, like Martin Mull used to say, “enough about me talking about me… you talk about me…”
We Made the Offer - He Made Up His Mind - Trying to Buy a Chicago Condo
I received a phone call this morning from an agent to whom I submitted an offer to buy a Chicago condo yesterday. What he had to say took me by surprise.
You see, here’s what happened.
Dave and Colleen are a really nice couple heading to Chicago from D.C. so she can attend a graduate program in Hyde Park. I met them through another really nice couple from D.C. who also came to the University of Chicago a few years back. The few years back couple, Jon and Heidi - I helped them find a place in Bucktown and they are nice enough to share my info with friends who gravitate to Chicago every 10 or so months.
Anyway, Dave and Colleen have been looking online and have a good grasp of the Chicago real estate market and, after visiting a few times, knew more or less where they wanted to live. This weekend was to be the culmination of online ruminations and on the ground ambulations. So all day Friday we set ‘em up and knocked ‘em down, looking at one after another.
Finally we settled on a few contenders and slated a couple of Saturday morning showings to round out the vision quest. I left them after our 11am showing Saturday to show my Lincoln Square single family home at 2454 Berteau and then I headed to show nine places to Steve and Megan and their three kids in Hinsdale, LaGrange and Clarendon Hills.
Weathering a rainstorm and enough lockboxes to blister your fingers for a month of Sundays in the suburbs I headed back to my office in Lincoln Park to reconvene with Colleen and Dave and write up an offer on one of the Lakeview residences we had viewed (and that they liked).
And so we pulled up tax records and comps from both three and six months back to derive a reasonable direction as far as the number we would affix to our initial offer. The point of making an offer, for the most part, is not to start with your best and highest. Bearing this in mind and the statistics reflecting the specific commodity we were pursuing, we settled on a reasonable starting number. Thinking the comps I had run were pertinent to our cause, I included them in the packet of info I then sent via email to the listing agent.
The agent called later in the evening, wanting to know where my clients would go. I responded that they were reasonable but that we had based our offer on discernible facts and would be interested to hear back from his client.
So earlier this morning as the New York Times and the Chicago Tribune laid unfolded full of gossip, hearsay, and subjective facts and as I readied myself for the first of two open houses (including my beautiful listing at 726 Addison) I heard back from the listing agent and was informed that…
After presenting my offer to the seller the listing agent learned that his client was inclined to counter at full price. While such responses are not uncommon the fact is that non responses tend to occur in more robust markets where getting a mortgage doesn’t involve DNA samples and credit scores approximating three nearly perfect bowled games. They also don’t tend to be spat out in response to cash offers with less than 30 day closes (which verily describes our offer).
The listing agent told me he then had his “come to Jesus” conversation with his client to figure out just what his motivation is, was or would be. If you’ve read my past blogs you know that my business mission does not involve gratuitous pokes in the eye but is more steeped in fair value. At the end of the day my role is to secure for my clients a fair value deal, and that is what we sought here.
But at the end of this particular seller’s day his goal was somewhat different. And so, akin to the kid who ends the game by taking the ball home in a pout, the seller decided to simply cancel his listing after weathering it on the market for more than four months with an agent who conducted countless showings.
And so it goes. And so my clients, having returned to D.C. are left to find another piece of the Chicago real estate pie to charm and entertain them. The good news is that we have a few in mind. The question is whether we will find a seller willing to engage in a fair value transaction.
One thing is certain, I will do my part to ensure that my clients have the best and most informed counsel to facilitate the desired transaction.
Anyway, I thought you might find this little corner of the Chicago real estate market a bit entertaining. But as entertaining as it might be, wait until the next one! Not sure what it will entail, but it will keep you on the edge of your seat.
Until the next time from The Real Estate Lounge Chicago.
Candy in the morning does not a breakfast make…
Jackson stood at the side of the bed this morning with one thought on his mind. “Candy,” he uttered proudly and with a broad grin.
The way he said it, with a lengthened first syllable that sounded more like a nasally “Ken” followed by the shortest possible “dee” cracked me up. It’s a great way to wake up, laughing.
But more than the way he said it was that he said it at all. Witnessing the elemental construction of memory is nothing short of miraculous.
You see last night Nicole and I brought Jackson and Lucas to a kids’ play date hosted by my brokerage, @ properties chicago. And aside from the fun and frolicking along with pretzel and pizza nibbling that took place at the bubbles academy in Lincoln Park was a gift bag chock full of more sugar than makes sense for a small nation to consume in a week.
But clearly Jackson remembered the bag and the joy he had in consuming a few choice morsels before Nicole and I allowed him to spiral into a sugar coma. And with the start of a new day he wanted to bring the memory back to life.
Perhaps you might categorize Jackson’s memory as selective. That doesn’t seem a stretch from the truth. Nor is it a stretch from the truth that the overall Chicago real estate market might be categorized beneath the same “selective memory” umbrella.
Surely there are more than a few sellers whose vision has been clouded by selectively remembering a time not long ago when their homes gained value at a more prodigious clip. And so some of these folks optimistically set their pricing accordingly.
We also have more than a handful of buyers whose actions are steeped in selective memories of internet stories of nameless and faceless buyers somewhere buying in current time a million-dollar home at pennies on the dollar or who drove a hard bargain in buying a place from a desperate seller. Fueled by Larry King interviews of talking heads these buyers seem less interested in fair value of a Chicago home or condo than they are in getting a great deal.
And finally we have the financial industry with its particularly pungent way of exercising selective memory. This group includes lenders, Wall Street, mortgage brokers, and local appraisers.
This passel of those loved primarily by their mothers has exercised selective memory whereby they mouth platitudes of rectifying the errors that led to the mortgage meltdown (perpetuated by these same market know-it-alls) while plunging daggers into the back of any recovery of the housing market by creating an environment in which
a) those who want to buy homes are prevented because of obscure and changing application guidelines - 10 percent down becomes 15 or 20 percent a week before close or new construction projects must be 90% sold before a funder will even consider a loan application
b) appraisals stipulating comps be from within the last three months and a four block radius - and when there aren’t suitable comps due to the lack of transacting (because money hasn’t been available to qualified candidates who want to buy a home and because of a little checked box indicating that the property is in a DECLINING market), appraisals come back lower than the agreed upon price and threaten to blow up the transaction
c) sizable market speculators bet on the mortgage industry topto “crap out” in the same manner that the unliked fellah at the end of the table in Vegas makes his pariah-type bets for the die roller to do the same. It’s simply that the size of the kitty is much greater as this macabre speculation threatens to tip the country into an unforgivable spiral of historic proportions.
With respect to “c” the front page of Friday’s New York Times carried word that there was fear of Freddie Mac and Fannie Mae being placed into conservatorship because speculators were betting so intently that these government sponsored enterprises would devalue so profoundly as to no longer be able to function. Observers on the sidelines, including Senator Christopher Dodd, the head of the Senate banking committee, commented that “There is a sort of a panic going on and that’s not what ought to be. The facts don’t warrant that reaction, in my view.”
By the end of the day both GSE’s had recovered enough to chase away this unappealing prospect. But here’s the real deal - if Fannie Mae and Freddie Mac are buried beneath the sharp spades of these market jackels (who want to speculate personal gains on the losses of the country overall) we will witness a grinding to a halt of the housing industry.
What’s the solution? Short of storming the castle where Frankenstein lives with torches and pitchforks I think our national consciousness must be cognizant to the manner in which our economy is predicated on speculation, conjecture, guesses (some incorrect), and shortsightedness (at times).
Ah, shortsightedness. It’s reminiscent of selective memory.
At the end of the day my hope is that we are able to actualize stewardship of the market akin to good and effective parenting.
There is talk of establishing legislation to forestall a run on Miss Mae and Mr. Mac. Properly done this will make a great deal of sense. And thus, like parents who hug their baby in the morning and steer him away from the bag of candy to the gluten-free waffles, we will have done what is right.
At any rate, that’s all from Tom McCarey on this sultry Saturday amid the din of showing my listings in the Chicago real estate market. Please continue checking in here at The Real Estate Lounge Chicago for occasional updates.
The Price Must Be Right for the Chicago Home to Sell
My two-year-old Jackson was waxing philosophical this morning.
The side lot was strewn with twigs and branches that rained down during what I assume was a heavy downpour last night. Peering out from the back porch over his bowl of fruit and cereal Jackson said, “Market time is like grass in the rain.”
Actually his words were a bit more muffled coming as they were from a mouth full of food and said by a toddler. After a second of lexicon recognition I nodded my head and recognized the wisdom of what he was saying.
Grass in the rain (like we have had this year in Chicago) tends to grow long. Meanwhile listings in the current Chicago real estate market themselves grow long in terms of length of time on the market.
From the mouths of babes and all of that I turned to my first-born son and waited for more pearls.
I didn’t have to wait long as he then uttered unequivocally “Long grass cut!”
Hmm, I thought to myself, whether deftly or roughly applied, this means price your Chicago home to sell. That’s certainly something the team at The Real Estate Lounge Chicago holds to be true.
And this means price it right.
It also means that taking a little off the top (reducing the price) will some times be appropriate and necessary.
At this point I was mesmerized by the sagacity of my son. Three months shy of his third birthday and he was proffering secrets of the trade that seasoned realtors sometimes neither perceive nor understand.
Tempering myself to not be gluttonous nor greedy with the kernels of wisdom dispensed by Jackson I inhaled slowly to maintain my patience. But foremost in my mind was the question - what more will he reveal?
By the same token, though, I mused to myself - what more does he need to reveal? The bottom line in the current market is that right-priced properties sell. The only question is how long it will take to achieve the sale.
As a group of my friends from a different forum like to say (and with applicability here) “sometimes quickly, sometimes slowly.”
Which is true in the here and now. Even when we are right-priced at times we need to hold course with fair value pricing until the right buyer arrives.
Comforted by these caveats Jackson and I settled down to enjoy the remainder of Sunday morning, he with his yogurt montage and me with my metropolis coffee.
The Big Truth about Jumbo Loans in Chicago Real Estate Market
As a Chicago real estate professional I would never be so dense as to say I cover the entire city of Chicago or all of the outlying Chicagoland area.
Instead I concentrate on a geographic swath within the city that essentially extends from the Chicago River to Devon Avenue, from Lake Michigan to west of Western Avenue. I go beyond these artificial boundaries to the South Loop and Hyde Park, and I go to those western and North Shore suburbs as my clients express affinity.
But for conversational purposes my “sweet zone” is within the boundary I have indicated.
Ask me about any and all of these areas and I will rattle of statistics that will make you yawn and wish me silent. That is, unless, you are looking to either buy or sell in any of these locations. I mention my knowledge of the market to make the following point - the decision to exclude Chicago from one of the country’s 100 “high cost” areas where Freddie Mac and Fannie Mae can purchase mortgages larger than the $417,000 standard limit is absurd and does a disservice to the Chicago real estate market.
Every once in a while I will receive an email or phone call from somebody who wishes to buy a median-priced home. Truth be known, I would like to buy the selfsame home at the same price. But the fact of the matter is that I have never seen a median-priced home in the mid $300s in Chicago. They surely exist - that’s how the number is derived in the first place.
But they don’t exist in Lakeview or Bucktown, in the Gold Coast or Edgewater, in Wicker Park or Roscoe Village. They don’t exist in a range of Chicago neighborhoods because the so-called price of admission is much higher either incrementally or substantially than the $417,000 cap. And though this is the case the overall metropolitan Chicago area was excluded from the Economic Stimulus Act of 2008 which would have enabled Chicagoans easier access to more providers of so-called jumbo loans.
In the Chicago Tribune this week Thad Wong of Chicago’s @properties said leaving Chicago off the list was an oversight or mistake. He went on to say, “If the limit were raised, there would be a wider pool of lenders. There would be buyers who could qualify for a lower rate. It would add more people to the market. It would accelerate pricing and reduce the market time.”
On behalf of the team at The Real Estate Lounge Chicago I agree wholeheartedly.
But here we are, defined by HUD as not a “high cost” market. As a result, with fewer jumbo loans available and those available being for higher interest rates we pay the price with consumers who wish to participate in the market not being able to do so with the freedom that is prevalent in other areas like Boston or San Francisco.
What seems more sensible to me is making the “high cost” determination based on more local terms such as zip code. Given the very local nature of real estate this approach seems more reasonable.
Efforts are underway to extend the 2008 Stimulus Act beyond this year. Make a call to your congressional representative to push for a more localized definition so the Chicago real estate market will feel some of the love of this stimulus package. Here’s some contact information to facilitate you making the call:
Rep. Bobby Rush (D-1st)
Chicago: (773) 224-6500
Rep. Jesse Jackson, Jr. (D-2nd)
Chicago: (708) 798-6000
Rep. Dan Lipinski (D-3rd)
Chicago: (312) 886-0481
Rep. Luiz Gutierrez (D-4th)
Chicago: (773) 384-1655
Rep. Rahm Emanuel (D-5th)
Chicago: (773) 267-5926
Rep. Peter Roskam (R-6th)
Bloomingdale:(630) 893-9670
Rep. Danny Davis (D-7th)
Chicago: (773) 533-7520
Rep. Melissa Bean (D-8th)
Palatine: (847) 358-9160
Rep. Janice Schakowsky (D-9th)
Chicago: (773) 506-7100
Rep. Mark Kirk (R-10th)
Deerfield: (847) 940-0202
Rep. Jerry Weller (R-11th)
Joliet: (815) 740-2028
Rep. Judy Biggert (R-13th)
Clarendon Hills: (630) 655-2052
Tell them Tom McCarey referred you…
By the way, Sunday brings two open house opportunities…
1858 W Race a contemporary masterpiece East Village Single Family Home priced under $1MM - open from noon - 3p
1934 W Thomas a corner condo one minute south of Division Street - open from noon - 2p
Crazy Like a Fox - Fox News Parts Ways with Good Taste
Did you see the tagline Fox News applied to Michelle Obama during a Wednesday segment?
Married to Democratic Presidential Candidate Barack Obama since October 18, 1992, Fox referred to Michelle as “Obama’s Baby Mama.”
Not quite sure what this misguided and distasteful moniker was seeking to achieve other than a significant debasement of this organization’s already questionable credibility. I guess it was just business as usual for the network that described the Obamas’ knuckle tap the night Barack won the Democratic nomination as possibly a “terrorist fist jab.”
Now the question becomes what will these faux Fox journalists come up with next?
The Oxford English Dictionary defines the term bandied so glibly by Fox as one “chiefly in African-American usage” that refers to, “The mother of a man’s child, who is not his wife nor (in most cases) his current or exclusive partner.” Again, Barack and Michelle have been married for 16 years.
This disturbing news comes as American journalism lost a most reasonable voice today with the untimely death of Tim Russert. In a frenetic world where the fervor of cable tv tends to replace thoughtful discourse with disdain and disgust, Russert’s presence will be sorely missed. Only 58, Russert apparently suffered a massive heart attack at his desk and never revived.
Russert had just returned from a family vacation in Italy to celebrate his son Luke’s college graduation. Having been to Rome last Christmas with my two young sons, I can only imagine the depth of his family’s loss and pain with his early departure.
I will miss his direct, no nonsense approach to either side of the aisle in “Meet the Press,” his thoughtful approach, and his utter and non-swerving humanity.
The Green Grass of Wrigley Field (as the Cubs Keep Their Winning Ways)
Wrigley Field on a sunny Summer afternoon…
Few things in life provide such a rare pleasure. And with the Chicago Cubs tearing up the national league with a major league-leading 42 wins, the Friendly Confines have rarely been friendlier real estate to this life-long Cubs fan.
Early on Cubs ace Carlos Zambrano was tagged for a two-run shot to left. But given the offensive firepower surrounding him and with the wind whipping the left field flags like mad, this deficit seemed puny and easy to overcome.
Except it wasn’t.
Inning after inning the northside nine put up goose egg after miserable goose egg. In days of old (going back an entire century) Cubs fans would have anticipated the worst. An “L” for loss would be lifted atop the center field score board and that would be that, a simple single pockmark in a season rife with the rough terrain of far too many pockmarks.
But this team has proven to be different. And this day would be proof of this difference.
After several false starts, the Cubs finally gained a little traction in the 7th inning and halved the Atlanta Braves lead to 2-1. Given the fact that the Cubs have been scoring runs in droves, one run should be a gimme.
Turns out the gimme waited until the bottom of the 9th to show up. That’s when Jim Edmonds poked a line drive homer to the basket in left to tie the score. Ah, the universe felt as if it was coming back to a charitable disposition. Except that in this instance charity wasn’t given - it was taken. And the final collection waited until the 11th inning to bear its lovely toothy smile.
To set the table of the 11th inning picture the bases loaded with Cubs and no outs. Great position for pinch hitter Reed Johnson to be in as he took his place at the plate. He waited for the delivery of the first pitch from the brand new reliever when instead of getting a hit to win the game he was simply hit to win the game.
Kind of anticlimactic, yes, but nonetheless Johnson was hit by the first pitch, forcing in the winning run and the Cubs improved their major’s leading victory total to 43.
And we raised our voices as if in unison we 41,000+ faithful on hand to mark this latest entry in what we hope is a storybook season for this team we call our own.
By the way, located at Sheffield and Clark, Wrigley Field is two and a half blocks from a transcendent bit of Chicago real estate listed by Tom McCarey of The Real Estate Lounge Chicago - 726 Addison is a luxury condo on the top floor of a fully rehabbed all brick building. With a flowing extra wide layout, this condo is perfect for any number of Chicago real estate buyers, including first-time buyers or buyers looking for a bit more space in a wonderful Lakeview location, or out-of-towners looking for an in-town residence.
And another thing…
Another simply gorgeous residence that single home seekers in the Chicago real estate market need to know about is 1858 Race.
Occupying a bright corner in Chicago’s very hot East Village, this contemporary four-level luxury single family is the rarely available under $1MM residence. Having represented the buyers when we purchased in 2004 I can speak to the top notch quality of this Chicago single family home from top to bottom - commercial grade kitchen, artistic floating staircase, solid 8-foot doors, hardwood floors throughout, 6-zoned multi-component sound, awesome penthouse suite with walkout deck with beyond-your-imagination Chicago skyline views. Plus there’s a deck atop the two-car garage. This home will appeal to luxury home seeker who is either a current Chicago resident or is a corporate relocation to Chicago.
For more information on either of these must see homes, either call me at 773.848.9241 or email me tom@TheRealEstateLoungeChicago.com.
Send text message to google (and save yourself the fee)
The easiest way to find what you are looking for and your don’t want to pay a 75 cent surcharge by calling 411?
Send a text message to google.
That’s right, send a text message to 4 6 6 4 5 3.
Here’s the deal, enter the numbers 4 6 6 4 5 3 and in the body of the text you enter the bare-bones description of what you want.
For instance yesterday up and down the street surrounding our home in Chicago’s Edgewater neighborhood our neighbors had the big blue cans as Chicago starts to get real about recycling. And there we were with no monolithic blue bins in front of the Tom McCarey and Nicole Hilario estate.
Boo hoo.
I don’t know about you, but I don’t have my alderman’s number on speed dial. And I didn’t feel like calling anybody at The Real Estate Lounge Chicago office so I spun up google and texted.
Moments later I had info in hand and was en route to resolving my lack of big blue cans as I called my locally elected official and explained my predicament.
Of course, dear reader and seeker of info, please don’t try to perform this task while operating heavy equipment. If you are driving take a moment and pull over to the side and pose your question via text message.
And within moments you will have your response sans the surcharge of calling 411.
Of course if you have any questions about Chicago real estate, whether condos or single family homes, feel free to call me at 773.848.9241 or shoot me an email at tom@TheRealEstateLoungeChicago.com.
Ain’t life grand? Talk with you soon.
By the way, special thanks to my sister-in-law Monica Mendez for sharing this slice of the technological pie.
Rain Falls on Chicago Real Estate Open Houses
Rain, Rain, Go Away, Come Again Some Other Day!!
And so goes the lament of this Chicago real estate professional this darned damp Sunday.
Sequestered in one of the nicest condos among the current roster of Lakeview real estate I am left to my own devices. And so I plug away at the keyboard as I sit at the kitchen island at 726 W Addison.
And so it goes.
Maybe prospective open house attendees are huddled over iced lattes talking about Big Brown’s failure to shop up at the Belmont yesterday. Or they are viewing you tube clips of Carlos Zambrano going ballistic in the dugout after his dismal performance against the Dodgers yesterday. Or they are prepping for tonight’s game between the Lakers and Celtics.
Or maybe they were daunted by the prospect of getting doused by bucket-loads of rain that spilled from the sky at a more prodigious rate than from my sons’ eyes when admonished to not throw solid objects inside of the house.
Whatever the case may be here I am and here you are not.
And until you get here that will be the simple fact of the matter.
Maybe next time.
Or, if upon viewing this much nicer than average manifestation of Chicago real estate you decide that you want to see it in person, you decide to call me at 773.848.9241 to schedule an appointment of your own.
And remember, if you have a friend looking, do him or her a favor by forwarding this piece to them so they can see it for themselves.
You’ll be a hero! You’ll be a winner! You will be a true friend!
And I, Tom McCarey of The Real Estate Lounge Chicago, will be more than happy to help several more thoroughly pleased participants in another Chicago real estate transaction.
