Monday July 17

Welcome to our blog, North Shore Real Estate. Our focus is on Chicago's North Shore communities, listed above, where we live and sell homes.

The North Shore is a great place to live. We've lived in Evanston and Wilmette since 1985 when we moved here from New York City. I was going to grad school at Kellogg (Northwestern University) and Mindy was working downtown in advertising. We fell in love with the area, stayed after graduation and raised a family. Since 1985 we've seen a tremendous run-up in housing prices up and down the Shore. We've seen cities like Evanston go through a massive downtown/infrastructure re-development and we are now watching a significant number of Wilmette homes get knocked down and rebuilt ... larger and more expensive.

But through it all, these communities and neighborhoods remain a wonderful place to live.

As we pass the half way mark in 2006 there is universal agreement that this real estate market is very different than those of previous years. As we look at it, this isn't a "bad market" but a return to a "real" real estate market. Buyers aren't buying as fast because they don't have the "pressure" to buy. Last year they bought based on "fear": if they didn't write a contract the night they saw a house, they were afraid they'd lose it. Today, buyers think before they buy. They actually visit a home a few times, talk about it, look at mortgage rates, bring Mom and Dad through and then decide. This "thinking about a house" takes time. Consequently a home's Days On Market metric (the time required to sell a home) increases. And that's okay; this is how people used to buy homes. We must recognize that we are dealing in HUGE sums for these properties. In Spring 2006 the average price for a home in Wilmette was over $900,000; in Winnetka it was over $1,200,000. At these levels sellers need to be sharp on pricing and buyers should take time to make a good "money" decision.

On the other side of the transaction Sellers are experiencing greater anxiety because buyers aren't moving fast. Beyond the reasons listed above, buyers are also balking at, what appears to be, a methodical and almost mindless pricing model that simply adds 8-10% to a house price each year. Well, buyers know that housing prices don't increase in a linear fashion like that. Some years prices go up a lot, other years they don't. To make matters worse for sellers, interest rates have SURGED almost 40% in 18 months, from approx. 5% in 2005 to around 7% today. Higher interest rates increase the cost of money for buyers.

It all comes back to Pricing. If a house is priced out of line with the market, it sits. It doesn't sell that day, that week or even that month. And that is what causes many home sellers undue anxiety. The smart sellers know this dynamic and set their prices accordingly. They create a great value proposition for buyers. They sell their houses and now live in their new homes.

Is this a "Buyers' Market"? We don't know. There's a lot written every day on this topic. Labels can be misleading. The media loves labels. It's their equivalent of a sound bite. The bottomline is actually quite simple: if a house is priced well, buyers and sellers reach agreement quickly and a house sells. Every marketer knows that price is what drives decisions. A great home with a high price doesn't set a great value proposition. Sellers have to be good at pricing; buyers have to be able to recognize a well priced home. It's almost that simple.

This blog will discuss the marketing of a house, the factors that affect the market, what we're seeing every day in our communities. If you're a seller come back often: there will be great ideas and comments. For buyers this blog will also provide commentary on market dynamics and developments you need to know in order to make a buying decision.

Thanks.

DS

Visit www.mindyshea.com to learn more about us.