A bungalow on Chicago's far north side on the verge of being sold for the 2nd time within less than a year should be setting a wonderful example for the entire real estate community. Let this serve as proof positive that distressed properties and stagnant neighborhoods do not have to continue to hinder the residential market any further.
Within the past year, this home has gone from three to four bedrooms, has a fully finished lower level added (including the 4th bedroom), an entirely new kitchen put in, new bathrooms, outdated carpeting turned into shiny hardwood flooring, and a rebuilt 2-car garage among its many improvements.
Those of you that know Chicago will also appreciate this location, which is very close to public transportation and shopping, along with having a square block sized city park just one-half block away. There is free parking available on the street which does not have any form of Permit Parking which is dominant within much of the city limits.
As a result, this property, as of press time, shows as "Contingent" for sale at a price which is literally more than double the price paid for it within the past 12 months. The dollar amount spent to engage all of the improvements and amenities was most likely significant. Even so, it is safe to think that the current seller is doing well on the deal, while the eventual new owner will have one of the most valued homes within the entire Hollywood Park community of Chicago.
Late last year, the current seller purchased this home for $225,000. The contingency sale now posted is at $459,000. A study of this community shows this to be more than $100,000 above the current median price for homes.
The added significance to this price is that Chicago continues to rank among the highest cities in the nation in terms of the percentage of homes which are still underwater on mortgages.
Because of all of the work done to improve this house, the entire community benefits from the rise in property values. Yet, the new owner will benefit from an upgraded property, and the current seller comes away with what is likely a nice profit. Everybody wins.
This seller made it happen by making this home what it is today. This owner did not sit around and wait for magic beans to appear and fix the real estate market for everyone. He/she/they made it happen, and in less than one year.
Yet, this is only a part of this important story. It so happens that this home was foreclosed upon during 2015 for less than $200,000. In so many instances in Chicago and around the country, people sit back and allow that low price to harm and reduce property values for the neighborhood. By taking action, the recent owners increased the value of this very same home to the point of RAISING the home values for the very same area.
Now I can reveal that I had been inside that very home within the past three years due to my personally knowing the earlier owners who were foreclosed upon. Their circumstances were such that a severe disability of one of them limited their ability to maintain the home, let alone even consider any upgrades. Frankly, it was a mess with parts not cleaned regularly. That gives me the knowledge of exactly how much work and effort it took to upgrade this property to the point of increasing its value.
If only I had known that they could lose their home before it happened. Maybe I could have helped them to work with a contractor to make these improvements and share in the profits to benefit all concerned. And to help keep neighborhood home values from dropping (for no reason) because of the foreclosure price.
Maybe we can cause other homeowners in trouble and the big banks to see the benefits of taking action to upgrade instead of hurting all concerned with foreclosures. Now we have proof in Chicago that it can happen!
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