Lake County home market either boom or bust
By Judy Masterson email@example.com November 30, 2012 10:08PM
Home for sale by New Century Real Estate at 2290 Masters Lane in Round Lake Beach. | Thomas Delany Jr.~ Sun-Times Media
Realtor: Banks key to recovery
Tom Yingling, owner of New Century Real Estate in Round Lake Beach, said banks hold the key to solving the underwater mortgage crisis, arguing they should reduce loan principals to align with current appraisals.
Under such a plan, if the owner sells within 10 years, any profit over the re-set principal would go to the bank while anything over the original principal could be kept by the seller.
“That way it’s a shared loss,” Yingling said. “We see so many deals fail because a house is up for a short sale and we try to put a fair price on it but the bank puts them off. They (the bank) don’t want to pay any costs. The deal falls through and the property comes back as a foreclosure.”
Banks “should bite the bullet for a few thousand and move on,” said Yingling, who said he sees many people mired in lopsided mortgages through no fault of their own and with no relief in sight.
“The banks are what’s killing our whole market,” Yingling said. “They need to play nice.”
Updated: January 30, 2013 1:15AM
The housing recovery in Lake County is anemic in some communities, non-existent in others and bouncing along in a lucky few, with either boost or bust in home prices closely tied to other indicators of economic health.
In Lake Forest on the North Shore, where equalized assessed valuation per public school student is $2.2 million, where 34 percent of residents hold advanced educational degrees and where the median household income is $150,000, the median for recent home sales is reaching toward $670,000 — a 2 percent jump over last year.
“The number of sales are up, particularly in the $500,000 to $800,000 range,” said Brunhild Baass, an agent for Baird & Warner. “Builders are starting to build again. Distressed sales — short sales, pre-foreclosures, bank-owned — are down, lower than last year. We’re cautiously optimistic and we’re excited about the market for next spring.”
But there is no excitement in towns including Waukegan, the Round Lakes, Zion and North Chicago, where unemployment is still high and where there’s more bone than meat in the tax base. In those communities, home prices are still flushing, by 5, 9, 14 percent or more, forcing more owners into short-sales and foreclosures.
Alex Attiah, principal broker of Grayslake-based REIT Homes, is adamant that the market in Lake County is still a very sick patient.
“To say it’s a recovery is misleading and irresponsible,” said Attiah, who cited variables based on area, price point and economic and political climate.
“What we still find is the same sense of insecurity and instability,” Attiah said. “That hasn’t changed, The economy is driving a lot of what’s occurring in the housing market. Specific areas are either flat or have very slightly increased in value.”
Areas like North Chicago, where the rare new business is either a fast-food place or a hair salon, properties are selling, but for rock-bottom sums; as many as 90 percent of them through foreclosures or short sales, in which the mortgage lender agrees to take less than the balance owed.
“We’ve had a lot of sales over the past four-to-five months, but value has decreased dramatically,” said Debbie Richards, whose real estate firm operates out of the North Chicago house where she grew up. “That’s driving a lot of investors.”
Many owners in North Chicago and other low-income communities in Lake County, are “bailing” on their mortgages, walking away from their homes and working to re-establish credit, rather than continuing to pay into under-water investments hat may take a decade or longer to resurface.
“A lot of people are saving money by saying bye to big mortgages,” Richards said. “Values are shot, money is limited, they’re barely holding on. It’s survival out here right now.”
In the Round Lake area, single family home prices dropped by 13 percent from 2009 to 2010 and by another 10 percent through October 2012, according to Midwest Real Estate Data, Realtor Tom Yingling sees prices “starting to inch-up.”
Like Richards, Yingling saw an influx of cash purchases. “We hardly had any mortgages last year,” he said. “I never saw so much cash — from 401(k)s, borrowing from mom and dad, savings accounts. Banks wouldn’t lend any money. Now they’re falling all over us trying to get our business. I think they feel we’ve bottomed-out and it’s okay to start lending.”
Yingling called short sales “the kiss of death,” but noted that more people are managing to avoid them.
“We’re just starting to see where people can put a house on market and just barely stay out of a short sale situation, whether it’s retirees who want to move or people settling estates,” Yingling said. “We’re starting to have normal sales.”
Other communities in Lake County are holding their own or almost — like Libertyville, where prices are up 3 percent and Gurnee, where they’re down 2 percent.
“If there’s a silver lining — and the established, financially stable communities in Lake County are best case — it’s their values have stopped dropping and there’s a slight increase,” Attiah said.