Welcome to Wilmette

A Review of Real Estate Transactions in Wilmette Through August 2011

A Few Themes for the End of Summer

Overall:
The average sold prices of single family homes (SFR) in August was down Interestingly, 60% of the homes that sold were sold at a price LESS THAN $750,000 The lending market is dysfunctional BUT well-qualified buyers are getting awesome rates

Sellers:
Inventory is declining which is very good. More homes for sale will exert downward pressure on pricing. Stretch pricing and I need pricing does not work (see point 1 under Buyers below) How your home looks versus the competition is immensely important it validates price.

Buyers:
Buyers are still highly selective about what they look at AND extremely price conscious They are looking at many more houses (often more than 15, sometimes more than 25!) before making a buying decision They are less likely to assume debt just to acquire a larger home; FUNCTION and UTILITY are key.

All Data Created by Don Shea, The Shea Group/@properties

Key Metrics For Active Inventory Compared to August 2010

Single Family Homes For Sale:
187 units down from 228, down 18%

Median Price Homes For Sale:

$699,000 in 2011 vs. $725,000, down 4%

Days on Market:
130 Days versus 140 Days in 2010

Distressed Homes For Sale:

17 bank-owned versus 19 in 2010
All Data Created by Don Shea, The Shea Group/@properties

Chicago's North Shore - Evanston to Winnetka Single Family Homes Sales December 2008 - August 2011
Median Price
$800,000
$700,000 120 $600,000 100 $500,000 $400,000 $300,000 $200,000 Transactions $778,750 Median SP$

# Transactions
$760,000 $720,000 140

80

60 40 20 0

$100,000
$-

2009

2010

2011

Since the high we reached in February 2010 there is a moderate downtrend in pricing for North Shore Single Family Homes. Line "1" above suggests MORE homes will sell in 2011 than 2010 and certainly 2009. I suggest this is the direct result of smarter pricing by Sellers. I am worried that the last three high points, red dots above on the Price line, are lower. Looking at the inventory, that downward trend indicates Larger Homes selling at Lower Prices. The good news here is that lower prices are resulting in more sales. All Data Created by Don Shea, The Shea Group/@properties

Wilmette Average Sold Price September 2007 to August 2011

$1,400,000 $1,300,000 $1,200,000 $1,100,000 $1,000,000 $900,000 $800,000 $700,000 $600,000

July 2008 - Multi-Year High: $1,257,156

Feb 2011 - Three Year High: $1,161,667

$500,000
$400,000

Nov 2009 - Multi-year Low: $533,412

August 2011: $705,997

2008

2009

2010

2011

There is no doubt that the last four years have been a hairy ride in real estate. The vaunted Real Estate Recovery perpetually seems just over the horizon. As we come into the last Quarter of 2011 we may be seeing the beginnings of a price stabilization that would precede a recovery. It took me a while to see this: on the chart above note that since August 2008 the Average Price of Sold Properties has banged around between $1,000,000 and $600,000. I caution that in 2008 and 2009 there were so few transactions that the month-to-month moves seemed violent. In late 2010 and this year the moves have been more predictable, at a lower rate unfortunately. I attribute the less frenetic moves to more accessible financing, Sellers who are tuned into the market and pricing lower and buyers who recognize the value in the real estate on the market.

Analysis of Wilmette SF Sales Median Price by # of Bedrooms

3BR
$1,450,000

4BR

5+BR

$1,250,000

$1,050,000

$850,000

$650,000

$450,000

$250,000

There is still a persistent downward trend in home with 5 bedrooms and 3 bedrooms in Wilmette. The Good News is the STABLE price action for homes with 4-bedrooms (red box) - prices have held steady at approximately $650,000 for almost 12 months. 3BR homes and 5BR homes seem to be less fortunate: 5BR home sales (33% of homes sales) are still in decline over the last12 months; 3BR sales (just 30%. of sales) also are in decline. These are significant numbers. So the strength in 4BR sales IS GOOD. All Data Created by Don Shea, The Shea Group/@properties

Closed Transactions - Trailing Three Months

Wilmette March 2007 - August 2011
Price
1250000
40 35 Average Transactions Average OLP$ Average SP$

Avg. #
45

1050000

1
850000

30 25

3
650000

20 15 10

450000

250000

2007 OLP: $1,103,828 SP: $1,022,260

2008 OLP: $1,047,862 SP: $ 936,527

2009 OLP: $ 861,608 SP: $ 753,983

2010 OLP: $ 915,162 SP: $ 822,161

2011 YTD OLP: $ 830,271 SP: $753,883

5 0

There may be too much info on this chart but there are very positive themes here: Line 1 - in black - shows the average closed price over a rolling three month period. It is in a steep, downward trend. For Sellers the lower pricing will bring buyers into the market and stimulate sales. Line 2 in dark red is the Original List Priceover the same time period. Likewise, it's in a downward trend that absolutely mirrors the Sold Price trend line. That confirms the market action adjusting for tougher lending conditions and conservative buyers. Line 3 in bright red is the trendline for Average Number of transactions. Ideally this would be pointing upward but with the lows reached in 2008 and 2009, a neutral trend is absolutely fine. I worry about the spread between OLP and SP but it appears to be closing indicating fewer price reductions and faster sales.

What to Look in Q4 2011

A Moderately higher level of transactions
Lending is beginning to loosen upfor well qualified buyers Consumer confidence is stagnant There are BUYERS out there.

Pipeline is Okay
Inventory is down YTD thats great: scarcity supports price

THERE IS POSITIVE ENERGY IN THE MARKET

Buyers want to buy.

All Data Created by Don Shea, The Shea Group/@properties

How to Reach Me
Address: 30 Green Bay Road Winnetka, IL 60093 Telephone: 847-833-8572 Email: donshea@atproperties.com Facebook: The_Shea_Group/@properties
All Data Created by Don Shea, The Shea Group/@properties