In a quick study of 4 west suburban markets of Chicago, the evidence is there that amazing deals abound in foreclosed homes, and short sales.  One zip code showed a 22% difference between projected value based on the Case-Shiller index and the actual sale prices of the “distressed” properties. That was an average of $57,000!

The tool used to calculate the projected value for the study was the Keller Williams Fox Valley home Valuation Model.  It is a powerful spreadsheet built by 2 agents at the Keller Williams St Charles market center, Vince Coniglione and Stephen Saunders, and their managing Broker, Steve Senter.  It utilizes data from the home price index for the Chicago market area as calculated by Case-Shiller.  The Case Shiller index is a widely quoted and recognized as a dependable benchmark for tracking home prices month to month.  Data exists for the Chicago Metro area from the year 1987 to the present.

In my study, I took four towns in the western suburbs, St Charles, Geneva, Yorkville, and Naperville.  In each town I pulled 4 recent sales of 4 bedroom, 2.1 bath homes.  For each property, I looked for the previous sale in the tax record and plugged the sale data into the KW valuation model.  When the past sales data is plugged in, an estimated price is calculated by the model, based on when the prior sale happened, how much the property sold for, and the price index data from Case-Shiller.

In all four towns, distressed property actual sales prices were significantly lower than  the projected sale price based on the KW Home Valuation Model.  The best deals, as I mentioned, showed a 22% below projected sale price (Yorkville).  St Charles posted the “worst” average, with average sale price below the projected index of 14%, a paltry $44,000.

It is interesting to note also that Yorkville had the greatest number of distressed properties sold as a percentage of all properties in the study, with over 1/3 (39%) either short sales or foreclosed properties.  This means that the banks are now competing against each other to sell and equates to amazing opportunities for buyers!  With interest rates at record lows, and prices like those we are seeing, affordability may never be better.  Now IS the time to buy!