Chicago home prices down less than U.S. in Nov

Chicago home prices fell in November but not as much as prices nationwide, which a widely watched index shows dropped by the sharpest annual rate on record.
But the silver lining might be that more families can finally buy a home for the first time in years. Falling home prices coupled with lower interest rates have shaved hundreds of dollars off monthly mortgage payments, and that is luring buyers back into the market, new data this week showed.
The Standard & Poor's/Case-Shiller 20-city housing index released Tuesday tumbled by a record 18.2 percent from November 2007, the largest decline since its inception in 2000.
Chicago prices fell 12.5 percent compared with November 2007 and 2.8 percent compared with October 2008, the S&P/Case-Shiller data show.
Both the 20- and 10-city indices have recorded year-over-year declines for 23 straight months. Prices are at levels not seen since February 2004.
But the numbers may not be as ugly at second glance, according to Patrick Newport, an economist with IHS Global Insight.
"If you adjust for inflation, they're not record declines," Newport said. "Home prices are still dropping at about a 20-percent clip, but it's not as bad as it's been in last six months."
But the recession and sweeping job losses don't bode well for a near-term turnaround in housing prices. Newport estimates prices will drop another 10 percent to 15 percent this year.
In fact, Americans' mood about the economy darkened further in January, sending a widely watched barometer of consumer sentiment to a new low, the Conference Board said Tuesday.

The National Association of Realtors said Monday that the median home price fell a record 15 percent last month to $175,400, down from $207,000 a year ago. That led to a surprising jump in sales from November's level.
With current interest rates and a 10 percent down payment, anyone who buys a median-priced home now would save $254 a month compared with the median price and interest rate of a year ago. more...

10 Cities Boasting Mini Sales Booms ...

Some cities that were hardest hit by the real downturn are experiencing mini sales booms.Las Vegas real estate properties are down 28 percent in price, but sales of homes are up 15 percent.Motivated buyers accounted for 64 percent of Las Vegas sales in October, says Radar Logic, a derivatives firm. That’s the highest rate in the country."There's a pretty active housing market, it's simply at a lower-priced inventory," says Michael Feder, chief executive of Radar Logic. "And there are now bidding wars taking place over homes in foreclosure."Phoenix and San Diego are reporting similar experiences. "We're clearing out the bad news," says Kiva Patten, a director at Merrill Lynch specializing in housing derivatives."By the end of 2010 – that's where we're calling the bottom in the forward market. You're going to get a small price appreciation in 2011," says Patten. "It's not like the turn is 10 percent per year, it'll be something like 3 percent or 4 percent."Here are the cities where experts say it makes the most sense to buy now.
Las Vegas
Sacramento, Calif.
San Diego, Calif.
Los Angeles
Detroit
Phoenix
San Francisco
Washington, D.C.
San Jose
AtlantaSource: Forbes, Matt Woolsey (01/12/09)

Short Sale v. Foreclosure

Both short sales and bank-owned homes you are negotiating with lenders rather than sellers. In a short sale, the seller might be desperate to accept any offer to avoid foreclosure, but that doesn't matter if the primary and junior lien holders don't agree to it. With bank-owned properties, you will be dealing with the "real-estate owned" or REO department of the lender who took ownership of the house at the auction. In both cases, you should be prepared to be patient, since lenders are overwhelmed with distress sales these days and may take weeks to respond to your offer. According to a survey of real-estate agents conducted in November by Campbell Communications the average wait time to get an answer from a lender on a short sale is 8.1 weeks, up from 4.5 weeks in a survey conducted earlier in 2008.
While it isn't unusual to see both short sales and bank-owned properties listed at prices far below those offered by traditional sellers, don't expect them to sell for much more than 20% below asking price, says Fort Lauderdale, Fla., broker Scott Coloney, who has assembled a "foreclosure response team" of financial and legal partners to facilitate distress sales. In fact, properties in good condition and in desirable locations may even spark bidding wars...more