Evanston ‘brainiest’ town its size in state

A  new analysis of census data asserts that Evanston has more brainpower than any town its size in Illinois.

The study by American City Business Journals looks at educational attainment as reported by the U.S. Census and combines that with average earnings data for each level of education to create an index number that permits ranking communities.

It says that Evanston ranks 9th among the 483 communities nationwide with between 50,000 and 99,999 residents with an index score of 27.205. Oak Park came in 10th nationally in that size category with an index score of 27.447.

The top ranked town nationwide in Evanston’s size class was Bethesda, Md., with a score of 38.303.

Others in the top 10 included the Boston suburbs Brookline and Newton Mass., Palo Alto, Cupertino and Davis California, Chapel Hill, N.C., and Boulder, Col.

All the top-ranked small cities on the list tend to be either the home of or located adjacent to major universities.

The rankings were split by population class because of the tendancy of smaller communities to have more homogeneous populations.

For example, in the smallest population category, 1,000 to 9,999 residents, top finisher Chevy Chase Village, Md., had an index score of 47.378 and 10th place Glencoe, Ill. came in at 40.699 — higher than any community in Evanston’s size ranking.

Ann Arbor, Mich., was the top community in the over 100,000 population list, scoring 32.406.

Put all towns, regardless of size, into a single list, and Evanston ranks 280th, coming in 18th within Illinois behind a collection of much smaller towns towns mostly in the north and western suburbs of Chicago.

The census data shows that, among Evanston residents at least 25 years of age, 6 percent lack a high school diploma, 11 percent have no more than a high school education, 17 percent have some college but less than a bachelor’s degree, 29 percent finished their education with a bachelor’s degree and 37 percent have a graduate or professional degree.

Reported by Evanston Now

Mistakes you can make with a lowball offer

Yes, yes, I know.  It’s a buyers’ market.  So much inventory, low housing prices, so the buyer gets their pick at the price they want.  But not so fast.  Yes, lots of inventory, lower housing prices.  However, there is still power to negotiating.  And you don’t want to insult the seller with a lowball offer and lose your dream home because of it.  Here are some mistakes that can be made with a lowball offer:

1. Not knowing the market.  And each one is different.  What may be a more acceptable offer in one market won’t be the same in another.  There could be an area where sellers are pricing homes more aggressively; therefore, they’re sticking close to their asking price.  Another neighborhood might be mostly made up of foreclosures and short sales, so the bank wants to get rid of the home ASAP and are willing to accept less.  So you’ll need to do your research with the help of a qualified Realtor (see #2)

2. Not picking the right Realtor.  They have the experience and the background and know the area you’re looking to purchase, so they’re your best asset going into a negotiation.  But you have to make sure they’re solid negotiators, since they are working on your behalf.  They’re not going to tell you not to present a really low offer, but they might say the sellers will reject it offhand so you might want to consider raising it by X amount or offering to waive one of your contingencies.  Trust their advice.  You’re working as a team and you want to make sure your agent also has your best interests at heart.

3. Not knowing what you’re willing to pay.  A lot of people these days in this market are focused on getting the best price.  But you have to be careful.  You have to know what your limit is so you don’t overpay.  And sellers will know what they need to walk away from the closing table or they won’t be able to make the sale.  No matter how wonderful the home is and how perfect your furniture will look in it and that you can see yourself having your morning coffee on the deck overlooking the pond, there comes a point where no deal is worth it at a certain price. Know that before you start negotiating or you’ll let your emotions get the better of you.  

You can also lose your positioning power by being too hard a negotiator at the beginning.  Don’t make your first offer your final offer and then start negotiating.  The seller will know that you aren’t serious and has the ball back in their court.  Make your offer one that you’re willing to negotiate and have your Realtor tell the seller you want to work with them and make the deal happen.

This MSN article has a few more mistakes that can be made and how to avoid them.  My Web site has some other great articles and tips for buyers.  Have a great week!

My 2012 real estate predictions

Seeing how we’ve gotten to the last week of 2011, I figured now was a perfect time to talk about what real estate looks like next year, in 2012.  Unfortunately, it hasn’t been the greatest housing market we’ve seen.  Home values in 2011 were still low, more people are renting, and others are having a harder time obtaining credit to purchase a house.  Here are some of my predictions for the upcoming year…

1. Disappointment over missed opportunities.  I think a lot of people might be kicking themselves for not taking the time to refinance their current mortgage or purchase an investment property at a rock-bottom price.  I’m not positive as to how long rates will stay low (could be another few years), but it’s best to strike while it’s hot!  And I’m going to admit that they’re not going to get much lower than they already are.  So if you’re in the market to do either of those things, now is the time!

2. I see trouble brewing with the HARP guidelines.  HARP, again, is the Home Affordable Refinance Program that I had written about previously.  This was a chance for homeowners to be able to refinance and get a lower interest rate, even though their house isn’t worth what it once used to be.  Also, the loan has to be owned by Freddie Mac or Fannie Mae.  A lot of these lenders are not requiring appraisals, which is great for homeowners, but I see another problem.  I have a hard time believing these lenders will be okay without an appraisal because they’re going to be liable for it in the future and if the homeowner defaults down the road.

3. A continuation of low home prices.  This is largely due to the amount of foreclosures on the market that are driving down the values of the surrounding homes.  This isn’t going to change in the next year, as the economy is still struggling to rebound and many people are still unemployed and underwater on their mortgages.  Once all the distressed inventory is sold (who knows when that will be?) we’ll be starting to see a shift with home values steadily increasing.

4) Credit guidelines to remain tight.  For the reasons stated above, such as the amount of foreclosures and short sales and unemployment and a bad economy, the lenders won’t be doing anything to release the grip they have on approving people to purchase homes.  They’re struggling enough as it is with all the delinquent loans that they are being extra stringent in awarding new ones.  I don’t see that changing anytime soon.

Do you agree with my predictions?  Are there any that I haven’t mentioned that you believe will happen?  I’d love to hear your comments!  And a very Happy New Year to all my readers!

Finding a home that won’t lose value

Given the current state of the economy, for all of you home buyers out there, I’m guessing that, when you do find a home you’re going to purchase, that you want to find one that won’t lose value.  You’ll want to look for features that will appeal to a seller when you do go to sell, whether that’s in one year or 20.  Here’s a quick list of features in homes that won’t lose value in a recession.

1. Choose a single-family home.  Sure, you may be starting out and want something small, preferably a condo.  However, in a worse economy, condos and townhomes lose their value more quickly than a single-family home.  So ask your Realtor to help you find a smaller detached home.  I have sold many first-time buyers one- or two-bedroom single-family homes, which was just the right size for their needs.

2. Keep carrying costs low.  When you do go to buy, make sure you find a property that is well-maintained and one that doesn’t require a lot of work over time, especially if you don’t plan to stay long.  New buyers get scared with all the costs of a mortgage, taxes, insurance, and maintenance, so whatever you can do to keep costs low will help you in the long run.  Here’s another tip.  If you see a problem, such as water dripping from the roof, make sure to take care of it BEFORE it turns into a large hole, which will just cost you more money because you waited.

3. Know your market.  Certain markets will never lose much value because they are important to certain segments of the population.  For example, a home within walking distance of the Metra in the Chicago suburbs is a great feature for commuters heading into the city.  A home with a swimming pool is going to sell quicker than one without in Arizona.  

4. Keep your kitchen and bathroom up to date.  As I have mentioned in the past, if you’re going to update or remodel any room in your home, these are the two to focus on.  These are the biggest rooms that “sell” a house.  Try to include appliances if you can.  Many first-time buyers don’t have these at their disposal, and it’s another thing that will help keep their costs down.  If you must take yours with you, consider offering an appliance credit instead.

I hope these tips help both potential buyers and sellers.  And to all my readers, have a very Happy Thanksgiving!  Visit me online.

What to do with all these foreclosures

So inventory is high with all these foreclosures and, therefore, property values are down.  So what does the government want to do about it?  According to the Wall Street Journal, they have two interesting options to help drive home values up again.

The first scenario is to sell packages of foreclosed properties in batches of hundreds or thousands to investors who would in turn agree to rent them out.  At the end of June, Fannie Mae, Freddie Mac, and the Federal Housing Administration owned about a combined 250,000 homes.  There’s about 830,000 that are still in the foreclosure process that would eventually land in their laps.  

 The second option they’re looking at is to “let investors enter joint ventures with Fannie or Freddie to invest in a pool of converted rental homes. A national property-management business would handle day-to-day landlord responsibilities. Investors would pay for rehabbing and maintaining properties and would share revenue from monthly rental income and the ultimate sale of the property.”  So they basically figure they can rent out the homes in order to keep them from being listed currently and to earn some money back.

Since there’s a lot less buyers today qualifying for loans or even willing to purchase, it’s investors who are picking up some of the inventory.

Both scenarios are interesting propositions.  I worry about the second one since that basically would make the government the landlord.  And that’s just another controlling factor that they shouldn’t be a part of.  And then on top of all the foreclosed homes they’re so slow to deal with already, how are they going to handle late rent payments or problems in the property?  They mention that a national property manager would deal with it, but that’s a huge influx of properties they will need to take over.  So can they really handle it?  I appreciate what they’re trying to do, but I don’t know if this is the best solution.

I’m definitely interested in hearing more about the first scenario, selling foreclosures in bulk.  By offering a package deal, that would also keep a lot of foreclosures off the market. 

I’d love to hear your thoughts on these scenarios and if you have other suggestions for how the government can or should be involved.  Please leave me a comment or visit me online.

 

Help on the way for unemployed homeowners

With talks still ongoing this weekend about the debt ceiling and if lawmakers will reach an agreement, there is good news to come from Washington, at least for those unemployed homeowners.

The Obama administration has announced that they will extend unemployed homeowners a few months’ forbearance on paying their mortgages to 12 months.  This is another action by Washington to put a halt to foreclosures and keep people in their homes.  Obama has been quoted as saying the housing market has been a terrible issue to solve and that “The continuing decline in the housing market is something that hasn’t bottomed out as quickly as we expected, and so that’s continued to be a big drag on the economy.”

He also mentioned that they will be communicating with banks in the hopes that they will work more efficiently to help modify loans for those in need.  And in order to qualify for the 12 months’ relief, homeowners must be in the process of looking for a job.  And for those that can afford to pay a portion of the loan, they must do that, as well.  You wouldn’t be mortgage-free the entire time.

Comments to this USA article suggest that programs like I’ve described just drag this crisis out longer and makes it tougher for those not struggling to make money on their home.   What are your thoughts on this?  By offering relief to some, is it negatively impacting others?  Will this keep the housing market at an all-time low for too long?  I’d love to hear your thoughts.  Please leave me a comment or visit me online.

Summer selling tips

A couple weeks back I wrote about how to save money by cooling your home.  I’m sure those of you choosing to sell right now would appreciate some tips on selling in the summer months.  While it seems like the housing market is at a standstill, there are plenty of buyers out there now who need to purchase a home.  I just read an article that lots of buyers now are cash buyers, which is good for people selling rentable units, as a lot of these buyers are investors.

1. Keep it cool.  Make sure the air conditioning is on in your home, even if you’re gone – actually, especially if you’re gone.  If the outside air is 75 degrees or higher, I recommending turning on the air.  You don’t have to make it feel like a meat cooler, but make sure it’s cool enough in there so your potential buyers aren’t sweating the second they walk through the door.  If there’s no air conditioning, make sure to put fans in there to circulate the air and open windows.

2. Stage your balcony if you have one.  Make sure you have some colorful flowers and a comfortable place to sit.  A balcony is extremely inviting and not only does it make the balcony look spacious by adding furniture, but it adds to the living space, making the entire unit seem more spacious.

3. Stage the inside.  It’s really hard these days to show a vacant unit.  They seem a lot smaller and lifeless.  You can stage it without spending a fortune by picking up furniture at garage sales or on Craigslist.  You don’t need to furnish it to the nines.  Just enough to put a bed in a bedroom to see how that fits, a dining room table in a dining room, etc.  It really will make the place look bigger.  It’ll be worth the investment.

4. If you live in attached housing, get FHA certified.  This is something that your condo association will need to do, not you individually.  It makes it much more attractive to buyers who use FHA financing, and that represents about 30% or more of buyers these days.  

5. Spread the word.  And this isn’t just for summer.  Yes, it’s your Realtor’s job to market the listing.  But you never know who you might run in to that is looking to move or knows someone looking.  Post ads on your social networking sites, let your colleagues at work know, tell people at church.  

A few more great tips can be found in this article.

Any more tips you can offer those trying to sell in the summer?  I’d love to hear your suggestions.  Please leave me a comment or visit me online.