Historically low mortgage interest rates have been a lifeline for many town first time homebuyers in recent years, keeping home ownership within reach for many who wouldn’t have otherwise been able to make the leap. For them, and for all the other than first time area homebuyers, the fact that home values have continued to rise has been an added boon.

But, as just about every mortgage industry expert will tell you, the gig is almost up for those rock bottom rates. Yet the question for many first time homebuyers remains: is it time to buy or not?

It’s a good time to take a hard look a few of the known facts—

According to web giant Zillow, as of Q1 2015, potential home buyers should expect to spend about 15% of their income on a mortgage for an average home in the U.S. When you compare this with the historical averages, it makes today’s rates temptingly low: the typical percentage has been closer to 21%. In terms of dollars spent monthly, that’s a big (and terrific) difference!

At the same time, the historical average has a typical renter shelling out 24% of income. Today, that’s closer to 30%…making first time homeownership that much more inviting.

Taken together, Zillow’s new calculations definitely appear to make finding a home to buy the more affordable option. On the other hand, it’s also true that a number of factors work against first time homebuyers—in Naperville and nationwide. College debt, for one, is far more of an obstacle than it used to be.  And the other side of those all-time high monthly rents in many places are making it that much harder for would-be first time homebuyers to save for a down payment.  But with the widespread phenomenon of growth in rents outpacing growth in home values, the rental affordability problem isn’t likely to improve any time soon. With mortgage rates likely to be on the increase as early as this fall, the long term outlook may not grow rosier as time passes. The implied takeaway: strike now while the iron is hot!

Whether this real estate foray is your first or tenth, if you’ve been considering taking advantage of this summer’s Naperville home buying bargains, contact me today for an introduction to a qualified mortgage broker—and to discuss whether this might not just be the perfect time to start your search!

For years, there was little debate about the need for open houses in town: almost without exception, unless the seller of one of our listings objected, at least one or two open houses were an accepted part of how most real estate agents went about marketing the property.

Today, along with all the other changes that define modern real estate marketing, the potency of open houses is up for serious debate. Virtual online tours are increasingly popular among area real estate sellers and buyers—the ‘use’ statistics that tell agents how often the different parts of their sites are viewed prove that. Since open houses were formerly held in order to display a property to members of the general public—and since virtual tours do the same thing—it’s truly a question that deserves a hard look.

Here are three of the main reasons I see frequently cited for why open houses are still useful—and some both pros and cons for each:

  1. Open Houses Can Bring Higher Prices

Pro: Open houses are most important for high demand properties when there is low inventory for similar homes. It can be possible to stage open houses in combination with delayed offer reviews—in this scenario, the seller hosts several open houses leading up to a final date when he or she will review competing offers.

Con: The same is accomplished with well-produced virtual tours. Interested viewers then contact the agent, who is able to qualify the prospects who will be invited for an actual on-site showing. Competing offers are just as likely to develop.

  1. Open Houses Are More Convenient for Sellers

Pro: People want to sell their Naperville area homes as quickly as possible if for no other reason than they must keep their houses spotless and organized while on the market. Open houses are one way for sellers to have to prepare fewer times for their home to be displayed to buyers.

Con: Virtual tours accomplish the same thing for a far broader cross-section of the public. Professional photographers use their photo session to record the property at its spotless best, which is then on display 24/7/365—not just for one or two days!

  1. Open Houses are More Convenient for Prospective Buyers

Pro: Interested parties can pop in for an on-site tour without the hassle of contacting the agent and scheduling an appointment—basically, of making even a minor level of commitment in advance of knowing much about the property. Open houses thus broaden the property’s exposure.

Con: Serious home shoppers are going online en masse; the effort expended on an open house is better spent preparing for interested, qualified buyers.

Every home we have for sale presents uniquely individual marketing opportunities and challenges. Ruling out open houses (or ruling them in) as a one-size-fits-all solution is not the way I expand the reach and appeal of the properties I represent. To talk about how we can maximize your own area real estate opportunity, just give me a call!    BTW…I just sold a house at my last “Open” on Sunday!

Putting together a listing in Naperville is serious business. It has to be brief, to-the-point, and at the same time, engaging. The photos and language of our listings is the tip of the marketing spear: if it’s dull, and just a repetition of the specifics that are enumerated in the columns of numbers that follow, it’s less likely to get more than a glance from potential buyers.

At the same time, every one of our listings has to be fastidiously accurate. If it exaggerates or mischaracterizes a property’s features, it will waste time and effort by creating traffic from prospects who were never going to be interested in the first place. They’ll be rightly annoyed. A well-crafted listing for a Naperville home will highlight the distinctive features that make it stand out from the crowd. It will attract qualified buyers who will want to investigate further.

As a matter of course, we in the real estate profession check out lots of listings from many other areas. It’s part of the job, keeping abreast of what is new elsewhere—comparing how others in other areas meet the challenges of language and imagery. Of course, after years of experience, you encounter few surprises.

But last week there was news of a listing unlike any other. I’m not sure that the details and language are going to be useful for describing our properties, since this detailed a foreign estate (on the Côte d’Azur) being put on the market by “a talented artist and musician.” The asking price is $33+ million, so it’s also a bit pricey for most buyers. But as an attention-getter, this listing ranks right up there at the top.

First off, the talented artist and musician is Johnny Depp, whose comings and goings generate headlines at all times. The listing language, in fact, is most precisely quoted by the Australian Domain real estate site—rather than a French source. The Australian public has been keeping track of Depp because of his continuing brush with authorities there over alleged dog-smuggling activities (his Yorkies, Pistol and Boo, are now safely out of the country). Domain tells us that the estate consists of “more than a dozen buildings, including a main house, several guest cottages, a chapel, a bar & restaurant, a workshop/garage, a staff house and much more.

Students of listing lingo might decide that this descriptor belongs in the ‘subtly understated’ category, particularly when the “much more” is teased out: the estate, it turns out, is actually a small Provençal village. More than a decade ago, Depp bought an entire early-19th-century village. It may have been a bit run down—but it did include its own church (the actor turned it into a guest cottage, with the confessional becoming a wardrobe). Depp took on the project as a sort of extreme DIY project. The restaurant became his dining room. He brought in a covered wagon for another guesthouse (it’s unclear how that worked out).

Not every local listing rates being quoted in a feature story in The Wall Street Journal, but this one surely did. “A wine cave in the main house has a Pirates of the Caribbean motif,” according to the Journal (as one reader commented, “Go get’m Sparrow!”).

You don’t have to have a French village, though, if you are thinking of adding your own estate to this summer’s local listings. Just give me a call!

People often ask whether they should buy a home now or wait. Recently released data suggests that waiting may not make sense as prices seem to again be on the rise. Let’s take a look at some of the data and commentary on the subject:

Ed Stansfield, chief property economist at Capital Economics:
“The current tightness of supply conditions would normally be consistent with much faster price growth. The continued steady growth in home sales that we expect this year will only add to this upward pressure on prices.”

Case Shiller Home Price Index
“The S&P/Case-Shiller U.S. National Home Price Index, covering all nine U.S. census divisions, recorded a 4.1% annual gain in March 2015 … with a 0.8% increase for the month.”

Anand Nallathambi, CEO of CoreLogic
“All signs are pointing toward continued price appreciation throughout 2015… Tight inventories, job growth and the impact of demographics and household formation are pushing price levels in many states toward record levels.”

Danielle Hale, Director of Housing Statistics at NAR
“Even without further acceleration, the pace of price growth remains too high. Strong buyer demand and low inventories coupled with relatively low new construction are helping to push prices up, keeping the housing market tipped in favor of sellers.”

FHFA Principal Economist Andrew Leventis
“The first quarter saw strong and widespread home price growth throughout most of the country. Home prices are now, on average, roughly 20 percent above where they were three years ago. This run-up has been historically exceptional and is particularly notable in light of the limited household income growth and modest rate of overall inflation observed during that same time period.”

Bottom Line

If you are planning on buying a home in the near future, waiting probably doesn’t make sense from a purely pricing standpoint.

One-Question Exam: A Credit Report True/False Quiz

Here is a one-question True or False exam that every future first-time home buyer should take:
True or False:
One sure way to build a strong credit report is to pay your bills on time.
(Answer: False)
Particularly for a first-time Naperville area home buyer, being able to present a strong credit report can make the difference between being able to afford a quality home that satisfies all your ‘must haves’—or one you just sort of settle for.
It’s about how much you can comfortably afford. The interest rate you will be offered is directly related to your bill-paying history, and a percentage point (or more) can make a big difference in your monthly budget. Because lending institutions charge more or less based upon the degree of risk they believe a loan carries, the stronger your credit report, the “more house” your monthly payment will cover.
Of course, since a string of unbroken records of punctual payments is what lenders look for, you might think that the answer to my one-question True or False exam would be an unqualified ‘True’—but not so fast. There’s a small catch is in the unbroken records that they look for. The word records.
Just paying your bills on time doesn’t build a strong credit report unless there are records of it—and for area first-timers who have been paying rent for years, all those prompt payments could well be missing in action. The surprising reason lies in the nature of our whole credit reporting system.
It’s voluntary.
As the L.A. Times spotlighted last summer, landlords, phone and cable companies, “and many other creditors don’t report your payments” to the big three credit bureaus (Equifax, Experian and TransUnion). They aren’t required to do so. If you’re planning on becoming one of our west suburban first-time home buyers, that might be a big deal—especially since rent payments usually make up the lion’s share of what you buy on credit. But you can do something about it!
Recognizing the difficulty some first timers were having in qualifying for home loans precisely because of such missing data, about five years ago, the credit bureaus teamed up with services like RentTrack that enable tenants to pay their rents online—and get credit for them. TransUnion and Experian also introduced services like “ResidentCredit” and “RentBureau” that encourage property managers to report rent payments for their tenants. That makes sense for landlords, too, because when rent payments are recorded, it enables them to better gauge the creditworthiness of their next batch of applicants.
Making sure your payments are being recorded will put today’s renters ahead of the game when they eventually decide they’re ready for the next step: home ownership. It simplifies the answer to that One-Question True or False credit report question greatly…to a simple “True”!

Spring is definitely an inspirational time of the year. After a long, wet Winter, we Midwesterners are looking forward to some renewed energy and sunshine! With a change of pace we can’t wait to experience what Mother Nature has to offer. Bringing all that fresh energy inside couldn’t be easier with the crisp and homey color selections for 2015. Pantone always presents a true change in color and this year was no different with their regal red called “Marsala”. If that is too bold, Sherwin-William’s color of the year is Coral Reef which definitely adds a bit of spice to a room. In our case, we like a touch of green and that was satisfied by Benjamin Moore’s color of the year Guilford Green. It is a great choice to bring the outside in with a calming green that would be an excellent choice for welcoming family and friends in the entryway. Of course, neutrals always provide an extended scale of whites, browns, grays, blacks, and blues that allow for something new without going overboard.

How will you incorporate these colors into your Spring and Summer updates? Are you envisioning a Coral Reef accent wall or a Guilford Green backsplash in the kitchen?

Spring is in full force; the summer months are right around the corner. If you are debating moving up to your dream home, here are four great reasons to consider buying today instead of waiting.

1.) Buyer Demand is High & Inventory Is Low

Recent numbers show that buyer demand is at the highest peak experienced in years, and inventory for sale is at a 4.6 months supply, which is still markedly lower than the 6.0 months needed for a historically normal market.

The National Association of Realtors, Chief Economist, Lawrence Yun put it this way,“Demand in many markets is far exceeding supply, and properties in March sold at a faster rate than any month since last summer.”

Listing your home today can greatly increase exposure to buyers who are out in force and ready to act.

2.) Prices Will Continue to Rise

The Home Price Expectation Survey polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts. Their most recent report projects appreciation in home values over the next five years to be between 11.7% (most pessimistic) and 27.5% (most optimistic).

The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting for your current home’s value to increase before selling could price you out of your new home if you aren’t careful.

3.) Mortgage Interest Rates Are Still Near Record Lows

As we reported last week, interest rates have remained below 4% for some time now, and are substantially lower than the rate previous generations paid when getting a mortgage.

The Mortgage Bankers Association, Fannie Mae, Freddie Mac & the National Association of Realtors are in unison projecting that rates will rise over the next 12 months.

An increase in rates will impact YOUR monthly mortgage payment. Even an increase of half a percentage point can put a dent in your family’s net worth. Whether you are moving up or buying your first home, your housing expense will be more a year from now if a mortgage is necessary to purchase your home.

4.) It’s Time to Move On with Your Life

The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise. But, what if they weren’t? Would you wait?

Look at the actual reason you are buying and decide whether it is worth waiting. Have you always wanted to live in a certain neighborhood? Would a climate change be just what the doctor ordered? Would you like to be closer to family?

Bottom Line

If the right thing for you and your family is to move up to your dream home this year, buying sooner rather than later could lead to substantial savings.

Whether we see it as evidence of the advance of a wider green homes movement or simply of rising environmental consciousness, Naperville area green homes are becoming properties with a distinct marketable sales advantage. What were once viewed as altruistic gestures practiced by only the most dedicated preservationists are going mainstream—and at a rapid clip. The National Association of Realtors® recently found that 70% of those surveyed believe eco-friendly features add value to a home. In other words, the practical advantages of ‘going green’ are becoming more and more evident to prospective buyers.

For sure, one reason for the increasing popularity of green homes in our area is a growing and sincere concern about sustainability.
But there’s also another reason: a growing and equally sincere desire to save cash!

There are in fact a number of practical reasons why green homes save their owners money—

    • Tankless water heaters are one example of a technology that’s been around for a while, but which is now gathering popularity. The engineering is based on the fact that constantly storing and re-heating of a volume of water means wasting a lot of energy. Tankless units don’t store heated water; instead they pass it over coils that are only energized when hot water is needed. As a consequence, tankless water heaters can actually save their owners up to 50% on hot water costs!
    • As global critics increase their cries for the conservation of fresh water, the idea that green homes can make a major difference is gaining traction. The EPA’s website lists multiple ways that green homes can save the precious resource, from WaterSense-labeled faucets and toilets to high-efficiency showerheads.
    • Energy-efficient heating and cooling systems can make the most dynamic contribution to green homes. Regularly-maintained Energy Star appliances, combined with home management practices like heating and cooling only areas that are in use via programmable thermostats can make a welcome dent in the monthly bills.

Together with the ongoing wallet relief that green homes provide their owners every month, changing over to ecologically championed household appliances and practices is an increasingly practical exercise. When it comes time to sell your Naperville area home, too, being able to provide those penny-pinched utility bills can make all the difference to cost-conscious prospects. For more ideas on ways you can increase the value and sales appeal of your own property, we hope you won’t hesitate to give us a call!

According to the Reuters news service, the home market for those with high net worth incomes (HNWI) has remained surprisingly strong — even when there were dips in other sectors. Luxury homes are hot on the radar of those with the means to swing multi-million dollar purchases.

One listing tactic for the marketing of luxury homes — whether in Kenilworth,, Hinsdale, or here in Naperville– is the “pocket listing.” Pocket listings give the owners of luxury homes the ability to conduct a discreet, private sale by keeping it off the Multiple Listing Service. The most common reason my sellers opt to steer clear of the MLS is to give maximum leeway concerning general public knowledge of the offering.

I recall seeing one notable recent example (I believe it was reported by TMZ): the simultaneous pocket listings of both of their high-end homes by celebrity pair Kim Kardashian and Kanye West. For public personalities whose careers are dependent on careful nurturing of their images, maintaining control of public access to their domestic doings can be viewed as a business necessity. Instead of being exposed on the usual multiple-listing services, it’s marketed directly by their agent.

Selling Naperville luxury homes through pocket listings can also provide the homeowner and agent the maximum ability to vet potential buyers. Too, business people wishing to avoid upsetting customers or employees can avoid speculation that they may be leaving the area. And for those who are wary of listing their luxury homes during a less than roaring market, a pocket listing leaves the door open to selling to the right buyer for an ideal price.

However (and it’s a big however), the same qualities that make pocket listings an attractive path to a discreet sale also carry a notable drawback. By their very nature, pocket listings severely cut down the number of potential buyers — considerably cutting down the chances of reaching the best possible sale price. If you are an adherent of the axiom any publicity is good publicity, a pocket listings word-of-mouth technique (the first cousin of no publicity) probably isn’t an attractive alternative.

If you are looking to sell your home with little fanfare, call me to discuss your options and the pros and cons of each. Local luxury homes can sometimes be well served when they stay in the pocket!

When you Google “seeking the best professional,” in about a half a second you are presented with 403 million candidates (not to play favorites, SearchEngineWise, when you ask Bing the same thing, it gives you a mere 62.6 million…which might actually prove more useful, since it would only take you a little more than a year to scan each for 2 seconds).

Narrowing the quest, when you Google “seeking the best Realtor®,” it gives you just a few less than 2,000,000 likely results. Since anyone seeking the best real estate professional to buy or sell their home isn’t after one eight states away, almost everyone quickly narrows the search to ‘best Realtor in Naperville.’ That number varies from time to time, but almost always more than 500,000 show up (the ones at the top are paid ads).

This isn’t actually as whimsical a quest as such results suggest: it’s a quite serious undertaking. Even if you are a veteran homeowner—someone who has bought and sold homes multiple times in the past—today’s market is so vastly different from what it was even ten years ago (thank you, Internet!) that you need to connect with a Realtor in the Naperville area who will bring you success in this vast new arena. This will be someone whose marketing know how is as current as this morning’s Tweet—but whose depth of knowledge and experience in adroitly handling the old-fashioned local workings (and, alas, paperwork) are also encyclopedic. Today, your “best Naperville area Realtor” will have mastered it all.

So, what’s the right way to go about finding her/him? What’s a homeowner or prospective home buyer to do when they are bound and determined to actually find the best professional in the area? There are positive steps to take:

    1. Word of mouth: ask around to people whose opinions are substantial. Even if you are looking to sell and someone whose opinion you trust has experience only as a buyer, take the agent’s name. The best Realtors in your area are great on both fronts!
    2. When you are out and about in the neighborhood, note the “For Sale” yard signs planted in the lawns of appealing-looking properties. Jot down the agent’s contact number.
    3. Check the newspapers (and even notices posted on local store bulletin boards) for open houses…then attend them!
    4. Check the local MLS: see which agents are prominently represented in the Naperville listings—especially for properties in the same general price range. Look for eye-catching, well-written listings.

And finally, having compiled a list of your likely suspects, take the final and most important step of all:

1. Stop Googling—and start interviewing!

The search for the best Realtor in your town will take a bit of energy—and a bit of your time—but given the significance of the task ahead, is guaranteed to be worth your while. Since you’ve found my western burb blog, I hope you will put me on your list of best area Realtors—please don’t hesitate to give me a call!