Click to play Chicago Business Today videoLast Thursday I was featured along with one of my clients in a Crain’s Chicago Business video reporting on the recent rise in Chicago home sales.

I’d like to make one important correction.  The reporter states in the video that in September, I received three “offers” on the luxury properties I had listed for sale. Actually, I’ve had three multiple offers (i.e. buyers bidding against each other for the same property) plus additional offers on four more homes I have listed, for a total of ten offers so far in September.

The fact that there are once again multiple buyers vying for the same properties (in high price points, no less) is a major development. I am feeling very encouraged about our prospects for a healthy fall market.

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This is the first in a three-part series about cooperative apartments.

In searching for an apartment, you might find some described as “condos” or “condominiums” and others as “coops” or “cooperatives.”  While it is true that many (but not all) coop apartments are located in classically designed pre-War buildings, the term “coop” does not describe the style of the building but rather the ownership terms of the apartments.

With a condominium (or condo), you are buying a physical apartment (as defined by a legal description) as well as a share in the common elements of the building. A condo association, led by a board of directors, manages the building’s exterior and common elements, including landscaping, while the unit owners maintain the interiors of their individual apartments.

When you purchase in a cooperative (or coop), you are technically not buying real estate. Instead, you are purchasing shares of stock in a legal entity (usually a corporation) that owns real estate. Your shares of stock entitle you to occupy a specific apartment, as defined in the Proprietary Lease you receive with your stock certificate. So in the end, you have the same thing (a place to live), but how you achieve this is a bit different.

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why-sell-in-this-marketOn the surface, it’s a very logical question: “Why would anyone willingly sell a home in a down market?” If the typical news story is any indication, it seems that the only reason to sell these days is out of financial desperation – selling at a potential loss in order to hastily make ends meet. For the large majority of the sellers I’ve met these days, however, that couldn’t be further from the truth.

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ask-jennifer-amesIf you’ve got a question about the North Side residential market, be it regarding luxury townhomes, bargain foreclosures, home financing, or any other relevant topic – now is the time to ask.

I’ve always had my contact info up on this blog for those who want to reach me, but there’s no longer any excuse for the inquisitive to be shy. I’ve added an “Ask” page to the menu above, with a handy form for submitting real estate questions to me. Use it, and your question, along with my answer, could appear as a future “Ask Jenny” post on this blog.

With fifteen years experience in the Chicago residential market, a six member team of professionals, and a vast network of colleagues in a variety of disciplines, I’m a great alternative to sifting through Google results in hope of answers. So, ask away!

on-targetAs one of Chicago’s top ten residential real estate agents (and #77 in the nation according to The Wall Street Journal), I am a frequent source for the media. I always enjoy the opportunity to share my “in-the-trenches” perspectives on Chicago’s residential market, as I believe that what is happening locally is more relevant to Chicago homeowners than generalized national reports.

Unfortunately, as with any interaction with the media, there’s the risk of having one’s comments taken out of context, and that is precisely what happened in my July 2009 interview with Stephane Fitch for his Forbes magazine story entitled “America’s Most Troubled Luxury Neighborhoods.” Fitch distilled our 30 minute interview into two quotes that, out of context, contradict the key points I made in our interview. Having my name associated with misleading information about Chicago’s real estate market, and especially about the Lincoln Park neighborhood where I was the #1 selling agent in 2008, is troublesome.

So, I’d like to set the record straight: Chicago’s Lincoln Park is not a “troubled” neighborhood. While I cannot comment on the other neighborhoods mentioned in his story, I disagree with his assertion that home prices in Lincoln Park are on the verge of “collapse.”

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Weathering the Storm

Spring is on its way, a welcome change after a brisk Chicago winter. Bulbs are starting to sprout, buds are on the trees, and nature’s marvelous rebirth is right around the corner. Historically, spring is also that time of year when our real estate market comes alive, often with vigor. In years past, my residential real estate sales team and I averaged approximately 40% of our total year’s sales during Chicago’s “spring market.”

Believe it or not, our spring market is off to a healthy start this year. We have now written about the same amount of dollar volume as we did at this time last year, possibly a bit more. I attribute the fact that we are on course to our constant attention to pricing. All the beautiful brochures and online photos in the world won’t sell a home in this market if the asking price is too high. So, we have shifted how we communicate with our seller clients, and spot-on pricing is a frequent topic of discussion. While we are rarely getting the prices we would prefer, our clients who sell are relieved to be out from under their home and able to get on with their lives.

But our spring is not all joyful…

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When did you buy your house?

“When did you buy your house?” writes real estate reporter Marcie Geffner in her recent Inman article by the same name.

That was the question my friend Marilyn Stotts asked me during a recent gathering at a local restaurant. Not, “Where is your house?” “Do you like your house?” “How big is your house?” Or even the open-ended conversation starter, “Why did you buy your house?” But instead, “When did you buy your house?”

The fact is that with the rise and then fall in home values that has taken place in the last decade, the timing of your purchase is a good indicator of whether your home is worth more or less than you paid.

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Smart Pricing is Key!

When I meet with prospective home buyers, one of their first questions is inevitably, “How low below the asking price should I expect to pay?” My answer is always the same… it depends! Some homes are priced fairly and others are grossly overpriced. I cannot recommend a generalized strategy as we need to weigh the merits of each home individually against their prices.

When my team and I work with a seller to list their home, our strategy is to determine the home’s approximate market value, and then offer it for sale for as close as possible to (or even slightly below) that number. This strategy is especially important in a declining market. If we were to tack on an extra 10% of “wiggle room” onto our asking price, and then the market dropped 5%, we would be 15% above the market.  The larger the gap between market value and asking price, the greater the chance that the right buyers will not see your home. Rather, buyers in the market for a more expensive home will see yours, and it will pale in comparison to the competition. The most effective strategy is to price slightly below the market so your home is the “best in its class.”

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PeekaCity knows it!
Top agents across the country, like my colleague Barbara Puff, can help you find great vacation properties such as this one in Arizona.

Around this time of year, many Chicagoans are ready for a vacation, my family included. In our case, however, with three children under four years of age, hotels are not a good option. Shuttling the boys to a restaurant and back for all their meals is anything but relaxing, and we need more than just a place to sleep.

In anticipation of this, we purchased a condo in the Colorado Rockies – an area that offers year round recreation. We head out there when we can to ski, fly-fish, hike, swim, and generally decompress. A couple days of clean mountain air and crisp blue skies is a fantastic way to recharge, and our boys love it.

If you are suffering from a bout of spring fever, you might also consider buying a vacation home instead of renting or staying in a hotel. Prices in many resort destinations have fallen significantly – far more than home values here in Chicago. There are some amazing opportunities out there. Someday, we will look back at 2009 and wish we had picked up an extra property or two when prices and interest rates were low.

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Yesterday, President Obama signed into law one of the largest pieces of legislation in American history, The American Recovery and Reinvestment Act (a.k.a. the economic stimulus package), a $787 billion mix of tax breaks and government spending intended to jumpstart the U.S. economy.

I’m not a macro economist, so I can’t comment on the broader implications of the bill. However, I do understand the Chicago residential real estate market, and from what I’ve seen lately, the passage of the bill seems to be having some effect, whether direct or psychological, on home buyers in Chicago.
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