More Statistics

Purchasing a home is partially an emotional decision (do I LOVE it!!!????), but also a financial/business decision (can I afford it, is this property going to make money for me over time?). Does it make sense for you financially to sign that purchase contract? Is this a home in an area that can reasonably be expected to increase in value over time?

One way we can make some judgments on the financial side of a purchase agreement is to study the data on home sales for the area that interests you. Because this blog focuses on the North Shore, here are some critical stats for these communities: (information published by North Shore/Barrington Board of Realtors)

APPRECIATION RATE 2006 vs. 2005/MEDIAN SALE PRICE 2006/#UNITS SOLD in 2006

Evanston: 10.5%/$550,000/453
Wilmette: 8.14%/$810,000/335
Kenilworth: -20.28%/$1,120,000/25
Winnetka: 10.2%/$1,394,000/197
Northfield: -8.54%/$750,000/47
Glencoe: -9.38%/$1,051,250/110

It is important to note that every one of these communities saw significant increased volume in units sold during the years 2003 and 2004, when the real estate market was "hot." When we look at the rate at which homes are selling now (the absorption rate), the difference is startling.

As of February 2, 2007, the absorption rates (the length of time it would take to sell every single property that is currently on the market, without any new properties coming on market) are:

January 2007 - 69 weeks
December 2006 - 48 weeks
November 2006 - 60 weeks

The average market time for North Shore homes as of February 2, 2007 are:

January 2007 - 145 days
December 2006 - 136 days
November 2006 - 115 days
October 2006 - 105 days
September 2006 - 102 days
August 2006 - 90 days

Interpretation of these statistics is not for the faint of heart! Seriously, it is imperative that a buyer or seller of real estate speak with a Realtor to explore the meaning of these numbers for the specific market that is of interest to that person. Each market is different, and the inside information comes from the agent(s) who work in that market.

Contact us to explore the North Shore market and how you can optimize your selling or buying needs here.

There was a jazz tune called....

"Big Noise from Winnetka," composed in 1940 by New York jazzman Bob Haggart. (watch a live performance of the tune on YouTube by directing your web browser to this URL:

http://www.youtube.com/watch?v=-Xr4YWSAitw

But this is a REAL ESTATE blog, you might say to yourself. What's the connection?

It's just a fun way to introduce the lovely Village of Winnetka to you readers. Winnetka sits along Lake Michigan, just north of Wilmette and Kenilworth. Winnetka is one of the smaller North Shore communities with a population of only 12,419. The name "Winnetka" means "beautiful land" in a Native American Indian language.

The Village's vision statement reminds us that Winnetka is "... a village in a natural setting committed to its tradition of residential neighborhoods, citizens involvement, local shops, and education excellence..." And that sums it up rather well. Take some time to meander through the Village and see for yourself the enchanting residential streets, the lovely specialty shops, and the nationally-recognized public schools. There are three elementary schools and a junior high school (District 36). Of particular note is the high school in Winnetka, New Trier High School, District 203. The alumnae of New Trier include notable people who have had huge impact in national politics, entertainment, and more. Names? "Never discuss politics and religion" is our motto, but famous personalities in the entertainment world who came from New Trier High School include Rock Hudson, Chris O'Donnell, Charlton Heston, Virginia Madsen, and Lili Taylor.

In addition to the public schools in Winnetka, there are three private elementary schools and a private high school (North Shore Country Day School).

The user friendly park district offers four beaches, a boat launch, ice rink, golf, and more. There is terrific library, of course, and the Winnetka Community House is available for multiple recreational programs.

Winnetka was incorporated back in 1869. It grew from commerce needs, especially the growth of the Chicago & Milwaukee Railroad Company. Even today, the Metra commuter trains run through Winnetka and service three separate stations: Hubbard Woods (just before crossing into Glencoe), Winnetka downtown (at Elm Street), and Indian Hill (servicing New Trier High School). If the Metra Union Pacific North Line does not take you where you need to go, it's a short ride to the west side of Winnetka where you can access the Edens Expressway, taking you north towards Wisconsin, or south into the Kennedy Expressway and Chicago.

But what about the housing choices in Winnetka? There is a variety of ownership options and style selections in Winnetka. There is a rental market (apartments and single family homes), but the bulk of residents do own their home. Most of the housing units were built before 1939, but there is evidence of a healthy new-construction market as well, replacing older homes that no longer fill the needs of today's families.

Prices of homes on the market today look like this:

- single family: $644,900 (a resale) to $9,875,000 (new construction on Sheridan Road)

- townhouse: $339,000 to $435,000

- condominium: $199,000 (a resale unit) to $855,000 (new development on Green Bay Road)

Have we captured your interest? Come up for introductory tour of this very special community. We'll be happy to see you.

And if I am unhappy with my property tax assessment...

A collection groan often goes up to the heavens when the County Assessor notices go out to property owners. And it's no wonder; some increases on property assessments have the capacity to burden some property owners, if not incense them.

This phenomena is nothing new; waaaay back in 1789 a rather influential fellow named Benjamin Franklin wrote "But in this world nothing can be said to be certain, except death and taxes."

Ok, so you open your latest property assessment notice and are, shall we say, displeased. "What to do?" you ask. Fair question. There are three levels of appeal, which in theory can all be accomplished by the property owner without assistance of a legal expert.

For more direct assistance in appealing your property assessment, stop by or telephone your township assessor's office. Here on the North Shore, most communities are covered by either the Winnetka office (739 Elm Street, 847-446-8200), the Evanston office (846 Dodge Avenue, 847-332-2465), or the Northfield office (3801 West Lake in Glenview, 847-724-8300 ).

An excellent description of your rights to appeal are found on County Commissioner Larry Suffredin's website. Whether or not Larry is your elected representative to the County, this is a great resource:

http://www.suffredin.org/issues/issue.asp?issueid=8

As for the question of hiring an attorney to represent you in an appeal, well, you can if you want, but if you can research and manage the data needed to file and defend your appeal, you probably don't need to. Having said that, condominium board of directors might benefit from an attorney's expertise because the issues are a bit more complex in such an appeal. Condominium owners are advised NOT to file an appeal on their own for their individual unit. You are potentially going to stymie the attempts of other owners in your building (or your entire association) to also file an appeal. Talk to your Board of Directors if you have any questions about appealing the property assessment in your building. If you really need to have an attorney help you, search for expert representation on this website:

www.findlaw.com

And may the fates smile on your appeal efforts.

Back in the good ol' days, if a home buyer did not have at least a 20% downpayment towards the purchase of a property, the mortgage lender stuck a little gift called PMI (private mortgage insurance) onto the home buyer's monthly mortgage payment. This PMI was, in fact, an insurance policy to protect the LENDER from possible future default on the loan by the BORROWER. But the borrower was forced to pay for the insurance policy, and received no benefit from having that insurance policy applied to his/her loan. The additional charge on the monthly mortgage payment could easily run anywhere from 0.19% to 0.9% of the total loan amount. Things were rather dismal for the borrower when it came to PMI.

Until now.

Effective in 2007, a tax reform measure regarding PMI now gives the borrower a reason to smile just a little bit. Here's the scoop: if household income is less than $100,000, mortgage insurance premiums are now tax deductible, just like mortgage INTEREST is deductible. Hoorah! This tax reform change applies to PMI, as well as FHA mortgage insurance and the VA funding fee. The purchase of a home or the refinance loans that involve such mortgage premiums must have closed on or after January 1, 2007.

For more detailed information on how this tax change might be helpful to you, please talk with your tax advisor, or contact our local (Winnetka) Baird & Warner mortgage expert, Reed Brunzell, at 847-446-1855.

Just north of Evanston you'll find ...

Beautiful Wilmette! (pronounced Will - MET)

Like it's neighbor to the south, Wilmette treasures its history, as well as its modern day progress. Wilmette was named after a fur trader named Antoine Ouilmette. The United States government awarded him 1,280 acres of land, which he eventually sold in 1848 to farmers and developers. It grew to be the community of Wilmette as we know it. Wilmette fronts Lake Michigan with beautiful public access parks and beaches. It reaches west to the Edens Expressway, and north to the village of Kenilworth. Bicyclists beware: there are still many cobblestone residential streets in Wilmette, making for a rather bouncy ride. But the residents love those cobblestones, and the village maintains them; they are a link to the honored past.

Wilmette home ownership opportunities range from condominiums to cooperative apartments to townhomes and single family homes. The prices range from moderate (by today's market standards) to luxury levels. You will find older homes, brand new homes where older ones once stood, condominiums built decades ago, and the recently approved mixed-use project that will rise along Green Bay Road where a Ford auto dealership once stood, near the Metra train station. Another fascinating residential project is the transformation of the former Mallinckrodt College into luxury seniors-only condominiums. The village trustees have taken great care in guiding these recent projects in their planning to protect what Wilmette already has, and to maximize the benefit for the citizens of the village.

Attached homes (condos, co-ops, townhomes) sold in Wilmette last year from $113,000 up to $841,000. Single family homes sold last year from $300,000 up to $2,900,000. There's something for everyone.

Wilmette is the last outpost for the North Shore "L" train; the end of the Purple Line that links commuters to the Red Line into the heart of Chicago is found in Wilmette at the corner of 4th Street and Linden. If the CTA train does not take you where you want to go, the Metra's Union Pacific North Line might be your ticket, delivering you to the Ogilvie Transportation Center in only 32 minutes.

If boating is your preferred way of getting from here to there, Wilmette can help you out with lake access as well. A beautiful harbor awaits the local avid boaters. Sign up for lessons at the Sheridan Shore Sailing School!

A really nice place to call "home," take some time to discover Wilmette.

"Your commission is too high!"

Got your attention with that headline?! Probably so, and with good reason! Real estate broker commissions seem to be a hot topic: in the newspapers, on Internet advice blogs, and over the backyard fence.

We real estate professionals sometimes have to remind ourselves that so many of our customers and clients (there IS a difference between the two, a topic for another day) really do not understand the compensation situation of most agents. Case in point is the next door neighbor of one of our North Shore Home Advisors. The neighbor is a college professor, holds a doctorate degree, and is a homeowner. Just today this lovely neighbor came to realize what it takes to make a living as a Realtor, after chatting with this member of NSHA.

So here's the scoop: the business model of most real estate brokerages sets the agents up as "independent contractors." What does that mean in the real world? It means there is no salary paid to the agent. None. Indeed, the brokerage and other entities are engaged in assessing multiple fees and other fixed costs (such as local multiple listing board subscriptions) against the agents. The cost of doing business for a Realtor is far from minimal.

Here's a pop quiz for everybody: when a Realtor represents the seller, the property sold for $300,000, and the sales commission agreed to by the seller is six (6) percent, how many dollars will that agent earn for the closed transaction?

Answer: (Choose only one answer, and don't peek below to find the RIGHT answer before you think it through.)

1. $18,000
2. $7,500
3. $10,500
4. $5,250 - $8,400

We know from speaking with people who are not in the real estate business, that most folks assume the listing agent will take home $18,000 when the transaction closes. We wish it were so. That $18,000 is, of course, six percent of $300,000. But that $18,000 must be divided among several real estate professionals: the listing brokerage, the listing agent, the buyer's agent, and the buyer's brokerage. The listing agent will actually earn (drum roll please) somewhere between $5,250 and $8,400. That is the gross paycheck. Now subtract income tax, social security etc, gasoline for the car, the Blackberry and cell phone and wireless network laptop service, monthly subscriptions to the local multiple listing service, dues to the state and national realtor associations, monthly lease fee for that fancy electronic lockbox "key" we all carry around, refreshments for open houses, annual errors and omissions insurance, health insurance, office supplies, and and and and and and...... You get the idea.

Yes, a successful Realtor can earn a good living. No, we don't take home ALL that commission check that the title company prepares for a closing. We just take it back to our managing broker so that it can be dispersed to the several individuals who took part in the transaction.

We are required to disclosure to our customers and clients exactly how we are compensated, and by whom. Sometimes there are slight variations on how this all plays out; each deal is different, as any agent will tell you. But you now know the boilerplate version. Any questions remaining? Please give us a chance to explain what is still unclear. We love hearing from you!

The Taxman Cometh

Yes, it's that time again, time to acknowledge that along with home ownership comes - a property tax burden. If you currently own a home anywhere in Cook County, you have probably received a copy of the first installment of your tax bill in the mail.

Some confusion usually swirls around this tax bill, so a few basic factoids are presented here.

1. This tax bill is due March 1, 2007.
2. This tax bill is to pay for the 2006 tax year (we always pay "in arrears" in Cook County).
3. This tax bill, due March 1, 2007, is EXACTLY one half of what the final total bill was for your property in the tax year of 2005.
4. IF (and this is a biggie, so read carefully) you carry a mortgage on your property, and your lender collects money from you every month to maintain an escrow fund with which to pay your property tax bill, DO NOT send the County payment for the bill which you received in the mail. Again, DO NOT pay this property tax bill if your lender has this responsibility. If you are not certain whether or not your lender is supposed to pay your tax bill, please contact your lender's customer service department immediately and inquire. Having said all that, it is still a wise idea to make certain your lender has indeed paid your tax bill. You can do this online by logging onto the County Treasurer's website, click on the pull-down menu on the far left margin labeled "payments" and select the payment status report, type in your property PIN number (find this on your tax bill mailing), type in the 4-letter security code the screen will supply to you, and you will instantly be shown the status of your property's tax payment. That URL is http://www.cookcountytreasurer.com/.
5. If you purchased your home in the past year, do not assume that the previous owner of the property is responsible for the payment of the 2006 tax bill. This is probably not the case. Check your purchase contract for the paragraph that details how the property taxes will be prorated between you and the seller, and check your closing statement (also called a HUD-1 or a RESPA statement) for the detail of the tax credit that probably was granted to you by the seller. Any questions on this? Contact your designated Realtor, lender, or the attorney who represented you in the purchase transaction.
6. Exemptions are one last tidbit that we have not touched on here. If you feel that you are entitled to a homeowner's exemption and do not see it stated on this first installment bill, don't rush to the phone to call the Treasurer's office. Any exemptions to which you are entitled will be reflected on the SECOND installment bill, which will be finalized and mailed out in the early fall of this year.

Hope some of this is helpful to you. Don't hesitate to ask questions, if any remain; we had to explain all of this in the past couple days to a new homeowner whose day job is attorney at a large bank. It's ok to ask!

And speaking of asking, all of us here at North Shore Home Advisors are always available to take your questions about purchasing a home on the North Shore. Drop us a line, or pick up the phone. We are glad to help!

Variety in Evanston Housing Options

Of the many communities along the North Shore, you might be hard pressed to find a broader selection of home options than exists in Evanston. And in a broad range of pricing as well.

• Older homes from the 19th Century and early 20th Century: Georgian, farm houses, Cape Cods, bungalows, Dutch Colonial, and more


• Contemporary condominiums that stretch high above street level to provide stunning lake views


• Newly built single family homes that are designed to blend into their more established neighboring houses, but with today's amenities


• Renovated older homes that offer a nod to the past, but with an eye to the needs of today's buyer (design, energy efficiency, cook-friendly kitchens, etc.)


• Multi-unit properties for the investor or owner-occupied property owner, some from the early 1900's, and others from the mid-century era.

Today's market in Evanston has condominiums that range from $104,000 to $1,195,000.

There are single family homes on the market from $180,000 up to $2,500,000.

Townhomes can be found between $220,000 and $895,000.

And multi-unit properties are currently listed between $235,000 and $1,150,000.

The possibilities are not "endless," but they certainly are bountiful. Evanston is a dynamic city with a rich history and interesting contemporary attitudes shaped in part by the presence of Northwestern University and Evanston Northwestern Healthcare (ENH) Hospital, as well as multiple strong retail centers and a light industrial center.

Come on up and take a look at Evanston!

Cell Phone Safety in Winnetka

Word to the wise -

Effective February 1, 2007, Winnetka Village Ordinance MC-7-2006 makes it illegal for a person to talk on a hand-held cell phone while driving a motor vehicle in Winnetka. Hands-free devices may be used while driving, either a mounted speaker phone or an earpiece that connects to your cell phone. The new ordinance does NOT apply when you are calling 9-1-1 in the event of an emergency.

According to the Illinois Secretary of State, using a cell phone while driving increases your chances of getting into an accident by 400 percent. Whew!

I believe that the group of persons hit hardest by this ordinance are the multi-tasking Realtors who are otherwise seen steering the car, dialing a client on the cell phone, thumbing through half a dozen listing sheets, and checking an appointment time on the pda while balancing a take-out sandwich on his/her lap - simultaneously. The North Shore streets are just a little safer now, thanks to the Winnetka ordinance! :-)