It might also be useful information if you were thinking about opening a business. A strong real estate market is a key indicator that the overall economy is doing well. We find that when the real estate market is doing well, customer sentiment is generally high.

And as we all know (thanks to the recession), the converse is also true.
When the real estate market is suffering, customer sentiment usually plunges.

To really benefit from real estate analysis, you need to look at data on the neighborhood level. We have all heard, that in real estate, location is everything. This is very true. Real estate prices can vary
wildly from neighborhood to neighborhood.

So for this analysis, I decided to focus on Bronzeville Chicago.
Bronzeville Chicago has a lot going for it. There are many great neighborhood amenities including restaurants, parks, the lake, etc.

I was curious if the Bronzeville market conditions were improving or declining.
So I decided to analyze all condo sales dating back to 2007.
This information was extracted from the MRED MLS system.

The graph shown below shows the average selling prices by year.

bronzeville_real_estate_average_sales

We see that the average selling price hit a bottom around 2011. Since 2011, prices have been steadily increasing.
That is a good sign. Rising prices equates to rising demand.
We also see that prices have fallen significantly since 2007.

The pie charts shown below examine the ratio of traditional sales to distressed sales. We can see that foreclosures still make up half of the market in Bronzeville.

bronzeville_pie_charts_foreclosures

The following chart looks at the total units sold by year.
It looks like 2014 will end up with less units sold than in 2013.

bronzeville_sales_by_year

Well, that is all for now. If anyone out there is still awake, please leave
me a comment. Thanks!

Until the next time,

Mark Killion
Kale Realty
542 W. Roosevelt Rd
Chicago, IL 60607

Send me a note!

Visit me online: www.773property.com

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2013 Downtown Sales Analysis

Until the next time,

Mark Killion
Kale Realty
542 W. Roosevelt Rd
Chicago, IL 60607

Send me a note!

Visit me online: www.773property.com

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2013 Hyde Park Real Estate Sales Analysis

Until the next time,

Mark Killion
Kale Realty
542 W. Roosevelt Rd
Chicago, IL 60607

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Visit me online: www.773property.com

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Chicago Real Estate Sales Analysis – Nov 2013

Until the next time,

Mark Killion
Kale Realty
542 W. Roosevelt Rd
Chicago, IL 60607

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Visit me online: www.773property.com

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Bronzeville Rent Analysis – Chicago

Let’s take a quick look at rent prices in Chicago’s Bronzeville neighborhood.
This analysis is based on the 12 month period ending NOV-21-2013.
The picture above shows us the distribution of rent prices in Bronzeville.

The biggest slice of the pie represents the price range of $1,400 to $1,599.
The 2nd largest slice covers the price range of $1,200 to $1,399.
Together, they account for 50% of all rental transactions. So, half of the rentals
in Bronzeville are between $1,200 and $1,599.

A total of 206 units were rented during the last 12 months. So an average of 17
units are rented each month in the Bronzeville neighborhood. Here are the median
rents based on bedroom and bathroom counts:

=====================================
1 bed/1 bath: $837
2 bed/1 bath: $972
2 bed/2 bath: $1,254
3 bed/1 bath: $1,104
3 bed/2 bath: $1,533
3 bed/3 bath: $1,955
4 bed/1 bath: $1,225
4 bed/2 bath: $1,514
4 bed/3 bath: $1,997
========================================

Out of curiosity, I also wanted to compare the average rent for a 3bed/2bath
to the previous year’s amount. This way we can tell if rent prices are rising or
if they are falling.

During the previous 12 month period, a 3bed/2bath rented for $1,483 on average.
So the rent amount has increased by 3.4 % versus the previous year.

Well that’s all for now. I hope you found this information useful. If you are a tenant
looking for a Bronzeville rental, or if you are a landlord looking to rent out your
property, please contact me here.

In closing, I will leave you with a nice picture of a Bronzeville Mural.
This outdoor painting is near 40th and King Drive.

Bronzeville Mural

Until the next time,

Mark Killion
Kale Realty
542 W. Roosevelt Rd
Chicago, IL 60607

Send me a note!

Visit me online: www.773property.com

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Downtown Chicago Condo Rentals

Hello to all my blog readers out there.
I wanted to take a quick look at rental activity
in the West Loop.

This analysis is based on properties that were rented
from JAN 1st 2013 through MAR 20 2013 in the West Loop
Chicago neighborhood.

This year we had 93 units rented through March 20th.
Last year we had 108 units rented through March 20th.
So the total number of units rented has decreased by 16%.

However, the median rental price this year was $2,125.
Last year, the median rental price was $2,000.
This represents a rental increase of 6.25%.

Here is the median rental price breakdown by unit size:

Studio = $1,300
1 bedroom = $1,752
2 bedroom = $2,558
3+ bedroom = $3,643

For this analysis, I considered the West Loop to run
from 400 West to 1600 West and 700 South to 500 North.

If you are thinking about renting a condo in the West Loop
neighborhood, this analysis should give you a good idea
of current market values.

If you need assistance with renting a condo, please send
an e-mail to mark@markkillion.com

I help owners and tenants!

Until the next time,

Mark Killion
RE/MAX Premier Properties
1205 N Dearborn
Chicago, IL 60610

Send me a note!

Visit me online: www.773property.com

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Newport Condos - Kenwood Chicago

Financing a condo can be tricky.
Here are some important questions to ask the listing
broker BEFORE you submit an offer on a condo:

1. How many units in the building are rented out?
Most lenders require that at least 51% of the units be owner occupied.
So if there are a lot of rentals in the building, it will be hard to finance.

2. Are there rental restrictions?
Many associations are starting to restrict rentals. So if you are planning
on buying a condo as an investment property, be sure to check if rentals
are allowed in the building. If there are restrictions, you might be required
to complete an owner-occupant addendum which states that you intend to use
the property as your primary residence.

3. How much does the association have in reserves?
It is important that the association have adequate funds in reserve to
pay for future repairs. If the association is underfunded, lenders will
be hesitant to finance a condo there. Also, if the association is underfunded,
they are likely to hit you with a special assessment in the near future.

4. What special assessments have been mandated in the past five years?
Occasional special assessments are often unavoidable. But frequent special
assessments probably indicate that the property is being mismanaged, or the association is
underfunded.

5. Is the condo building in litigation?
If the association is facing a pending court case, or is currently in litigation,
start looking for another condo to buy.

6. Are more than 10% of the units owned by a single entity?
If several units are owned by the same person, the lender will view this as
being risky. For instance, if a developer hits hard times, multiple units can
go into foreclosure simultaneously. The property value of the remaining condos
in the building will probably decrease significantly as a result.

7) Have there been any recent sales in this building? And did they involve financing?
If a condo has been sold in the last 6 months, and it was financed,
then you are probably in good shape. If all the recent transactions were
cash deals, then this might indicate that the building didn’t qualify
for financing.

8) Do you have FHA financing?
Most condos and condo buildings will not qualify for FHA financing.
I estimate that for every 100 condos on the market, only 5 of them will
qualify for FHA financing.
So if you are shopping for a condo, you should line up conventional financing
instead of FHA financing.

Conventional financing will require higher credit scores and a higher down payment.
Most lenders would like you to have at least a 680 credit score and a 10%
down payment to go with it.

9) How many units are behind on their assessments?
If several owners are behind on their assessments, this could be a red flag.
If the owners are not paying their assessments, they are probably in financial
distress. It will only be a matter of time before they stop paying their
mortgage. If several owners are behind on their assessments, most lenders will
not finance a condo in the building.

10) How many short-sales and foreclosures are on the market in this building?
If there are other condos in this building on the market, are they distressed sales?
If so, it could mean trouble. Lenders only want to finance condos in stable buildings.
If more than a couple of units are in some stage of foreclosure, then you should probably
find a condo somewhere else.

As you can see, financing a condo can be tricky. It is now more important than ever
to work with an experienced real estate agent that understands the complexity of condo financing.
Otherwise, you may waste a lot of time viewing condos that won’t qualify for financing.

Until the next time,

Mark Killion
RE/MAX Premier Properties
1205 N Dearborn
Chicago, IL 60610

Send me a note!

Visit me online: www.773property.com

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Hello to all my blog readers out there. Today I want to
take a look at investing in condos. This is an interesting
niche for investors. There is an interesting dynamic happening in some Chicago neighborhoods.

Condo prices are relatively low and rental prices are relatively high.

This creates an excellent opportunity for investors.
Today I will look at the Bronzeville neighborhood in detail.
Bronzeville is one of those neighborhoods that has great
investment potential because of this very dynamic.

I have helped investors purchase condos in this neighborhood.
I have also helped many tenants rent condos in this neighborhood. So the next logical step for my business is to provide a complete solution for investors. I will help with the purchase of a condo and provide assistance all the way through finding a qualified tenant to move in. This is a turn-key, A to Z, solution.

So today we will look at two case studies.
We will also answer an interesting question:

Which is more profitable: a 2 bedroom condo or a 3 bedroom condo?
The answer may surprise you.

CASE STUDY 1

A three bedroom two bath condo was recently purchased in Bronzeville near King Drive and Oakwood. It is 1,475 square feet. It has hardwood floors, a fireplace, and it comes with a parking space.

It was purchased for $67,000 and it was in move-in condition. The property was purchased by a cash buyer.
This is a typical purchase price for this type of
condo.

Analysis:

The median rent for an updated 3bed/2bath condo in Bronzeville
is about $1,500 per month. If your unit is in great condition
like our subject property, I can get it rented in about 30 days.
You should have low turnover because Bronzeville is in demand by renters.

At $1,500 per month, the gross scheduled income is $18,000 per year. Next, we will look at expenses so that we can figure out our Net Operating Income (NOI).

Expenses:

Taxes: $3,666
Assessments: $1,800
Water: $600
Insurance: $1,000
Vacancy: $900
Repairs: $900
Prop Mgmt: $1,440
———————–

Our expenses total $10,306.
This gives us a Net Operating Income of $7,694.
Here are our key metrics for this investment:

Net Operating Income: $7,694
Cap Rate: 11.5%
Years to Break even: 8.71
Monthly Cash Flow: $641.17
NOI/square foot: $5.22
Price per square foot: $45.42

So, we see that this is a pretty good investment. Our
capitalization rate (cap rate) is 11.5%.
For Chicago investments, most investors are looking for
cap rates between 10% and 12%. A cap rate in this range
is considered a good one. Since there is no loan involved,
your cap rate in this case will equal your return on investment.
This investment will pay for itself in just under 9 years.
You may realize additional gains if the home values appreciate
during this time period.

==============================================================
Now let’s look at our 2nd case study which is a 2 bed/2 bath condo in the same neighborhood.

CASE STUDY 2

A 2bed/2bath condo was recently purchased near 48th and Vincennes.
It is a 950 square foot condo. It was purchased for $42,000.
This one was also purchased by a cash buyer.

This was rented about a month later for $1,250 per month.
The gross scheduled income is $15,000 per year. Next, we will look at expenses so that we can figure out
our Net Operating Income (NOI).

Expenses:

Taxes: $2,028
Assessments: $1,5480
Water: $400
Insurance: $1,000
Vacancy: $750
Repairs: $750
Prop Mgmt: $1,200
———————–

Our expenses total $7,676.
This gives us a Net Operating Income of $7,324.

————————————————————-
Side bar:

At this point in my analysis, I thought to myself
“Wow Mark! what a stunning revelation”

A two bedroom condo yielded a NOI of $7,324 which is only $370 less
than what a 3 bedroom condo yielded.
But, the purchase price was $25,000 less!
So all you Bronzeville Chicago condo investors out there, I just revealed something quite valuable. You will get a better return on your investment by purchasing two bedroom condos instead of three bedroom condos.

But, back to my analysis.
————————————————————–
Here are our key metrics for our 2bed/2bath investment condo:

Net Operating Income: $7,324
Cap Rate: 17.4%
Years to Break even: 5.73
Monthly Cash Flow: $610.33
NOI/square foot: $7.71
Price per square foot: $44.21

Look at the yields for our 2bed/2bath investment condo.
At a cap rate of 17.4%, this is an outstanding investment.
This condo will pay for itself in less than 6 years.

CONCLUSION:

Investing in condo rentals can be very profitable.
Our 3bed/2bath purchase gave us a respectable yield of 11.5%.
Our 2bed/2bath purchase knocked it out the park with a yield of 17.4%.
Imagine if you added 5 of these condos to your portfolio.
You would have a net monthly cash flow of about $3,000
(assuming you paid cash). Not bad at all!

Remember, I can offer you a turn key solution, from purchase to rental to positive cash flow!

Until the next time,

Mark Killion
Real Estate Broker
Century 21 Affiliated
5200 S. Harper Ave
Chicago, IL 60615
24 Hour Voice Mail: 312-242-1822
Send me a note!

Visit me online: www.773property.com

SINGLE FAMILY SALES ANALYSIS

In 2012, the median selling price in Beverly was $233,750.
In 2011, the median selling price in Beverly was $225,000.
So, Beverly home values appreciated by 3.89% in 2012.
The number of homes that were sold also increased by 7.59% in 2012.

In 2011, 158 homes were sold in Beverly Chicago.
This number increased to 170 homes in 2012.
So, things are definitely headed in the right direction.

The average home in Beverly Chicago took about 5 months to sell. The rate of sales in Beverly is about 14 homes per month.
As of Jan 8, 2013 there are 90 homes available for sale.
So, there is about 6.5 months of inventory on the market in Beverly.

A 6 month supply signals a healthy and balanced market.
To put this in perspective, in 2009, many Chicago areas had
over 18 months of inventory.

DISTRESSED SALES

Distressed sales accounted for nearly 25% of Beverly’s real estate transactions in 2012.

Here is the breakdown by sales type:

Court Approval 2%
Foreclosure 16%
Short Sale 6%
Traditional 76%

AVERAGE PRICE PER SQUARE FOOT

The average price per square foot was $137.50 in 2012.
So if you were thinking about putting a 2,000 square foot home on the market in Beverly,
its estimated selling price would be about $275,000.

If you have any questions regarding the Beverly Chicago
Real Estate market, please send an e-mail to mark@markkillion.com

Beverly Homeowners: I am offering a free property analysis!

Until the next time,

Mark Killion
Real Estate Broker
Century 21 Affiliated
5200 S. Harper Ave
Chicago, IL 60615
24 Hour Voice Mail: 312-242-1822
Send me a note!

Visit me online: www.773property.com

Bronzeville Condo Price Trend Analysis

The chart pictured above shows the price trend for Bronzeville condos.
It is based on average selling prices per quarter in 2011 and 2012.
It appears that selling prices may finally be stabilizing in the Bronzeville (Grand Boulevard) neighborhood.

The average 3 bedroom condo is selling for roughly $84,000.
The average 2 bedroom condo is selling for roughly $36,000.
The average market time for 2 bedroom condos is 97 days.
The average market time for 3 bedroom condos is 138 days.

If you have any questions about condo values in the Bronzeville
area, please send me an e-mail to: mark@markkillion.com

Until the next time,

Mark Killion
RE/MAX Premier Properties
1205 N Dearborn
Chicago, IL 60610

Send me a note!

Visit me online: www.773property.com

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