Tuesday, July 22, 2008

Please join me over at my New Blog!

Well, gentle readers, it's taken me two years to finally come to the conclusion that this blogging phenomenon was finally going to take off.

Who knew?

Heck, back in the day, I was known to say "Harrumph! Computers talking to each other! Who needs it?" Kinda like when Bill Gates said 64k was all the RAM any computer would ever need. I think the oldest cell phone in my closet has more memory.

In any case, I have finally taken the plunge and built my own Word Press blog and am hosting it over at www.yourwindycityguide.com. Of course, there's a link to it from trusty old www.darrowwest.com. I hope you'll link on over, and be sure to leave a comment or two.

If you are one of my kinder patrons that links here, would you update the link in your blogroll?

The interface looks a little cluttered today, but I am learning. And I believe I will have the whole template and spacing sorted out within a couple of days. So if you view the blog tonight - you'll see what I mean. If you view the blog in a few days or later - expect perfection!

Looking forward to seeing you over at www.yourwindycityguide.com!

Saturday, July 19, 2008

Q & A with your Chicago Real Estate Expert

A loyal reader writes and asks:

Brokers, have you ever bought a property (as an investment, to rehab and flip) for yourself from someone who came to list with you or company you work for?  Do you consider yourself to be to an advantage then others, since you get to it first? Is it fair, ethical and legal? If a client comes in to list their property and you want to buy it from them, who interested are you looking out for? Or if you don't buy it for yourself, did you have a preferred buyer who was counting on you to notify them of hot properties?

Here in Illinois, according to my Real Estate Broker Class Instructor at the Real Estate Education Company, it is ILLEGAL to buy your own listing.  A conflict of interest is created that Illinois License Law will not accommodate any resolution of this conflict.

So, Realtors, if you want to buy a piece of property that you go and see on a listing presentation, it is imperative under the law that you decide whether you want to try to purchase this property before taking the listing.  In fact, during the listing presentation process, it is frequently customary for a seller and the prospective agent to discuss the situation that has brought about the sale.  It can be interpreted under Illinois License Law that the use of this information by the agent in negotiating on the home would also be illegal.

Of course, I am always out there looking for prospective properties to purchase.  Lots of agents do this.  But my first source of property information is usually the Multiple Listing Service (MLS) and then popular websites that contain lots of For Sale By Owners (FSBO's.)

It's best to wear only one hat when out conducting business.  When I am on a listing appointment, I am wearing the hat of Marketing Specialist and Real Estate Agent for my company. 

When I am looking at investment properties, I make my phone calls and I introduce myself as a prospective buyer WHO ALSO IS A REAL ESTATE AGENT.  It's best to let people know right away that you are a Realtor when calling on properties that you might be interested in buying.  I have been in court accompanying other close friends who were sued for not disclosing that they were Real Estate Agents at the first point of contact, even though Illinois License Law states that you must list your licensee status on a contract on a piece of property.

And yes, if I go out and list a property that is perfect for one of my clients, I usually call them from the car in front of the house as I leave with the signed listing agreement.  I think that's good service to both the seller and the buyer.

Local Starbucks Closing. Thank God I'm Covered!

Much ado has been made about the closing of several Local Starbucks stores. Some community activists have even suggested that Starbucks is discriminatory as there are more closings in Cities than in Suburbs or in the Country.

In any case, I am losing TWO of my local stores. Thank God I'm still covered...




View Larger Map

Friday, July 18, 2008

Realtor Boquet - seen in Evanston

Hung from the service door to the Evanston Galleria

Thursday, July 17, 2008

Bringing you up to speed on Your Windy City Guide

Loyal readers will note the absence of posting by your guide for Three Whole Weeks - an unforgivable eternity in the blog posting world.  We hope you can forgive us our transgression and hope to retain your loyal readership.

The reasons have been threefold:

1.  I have not had an original thought in my head for a solid two weeks out of the last three.  The heat of the Summer must have gotten to me.  Perhaps too strong a desire to go sailing rather than think about anything real estate related. 

2.  On a positive note, we have been crazy busy.  Listing like crazy.  Wrote some contracts.  Listed some more developments.  Not the thing to do in the lazy dog-days of summer.  On top of that, our Trusty Management Expert - Steve West - also got busy.  He took over the management of a 100 unit complex in Old Town which led to a 50 unit mid-rise in Old Town, and a couple more projects coming on line in the next few weeks.  Poor Steve, work is getting in the way of his summertime fun, too.

He'll have some excellent stories to tell from the Property Management side of the business soon, though. 

3.  I have contracted with a technologically superior web-guru to overhaul the www.darrowwest.com website AND this humble blog.  I thought the project would be completed by now, but each day brings a few new wrinkles to the plan.  Before another day went by, I thought I had better get back on the bandwagon before my dearest friends forgot I was here.  Or worse - started removing links.

Boys n girls club statue park 003 

But this week while driving home from my latest listing at 3753 West Dickens (single family home for $359,900) I drove past this odd sight on Palmer out by Kedzie.  How fun is this?!

Boys n girls club statue park 001

Such a weird thing to see inside what appears to be quite an ordinary kiddie playground next door to a school.  It turns out to be the BARNET HODES Sculpture Garden. 

The centerpiece of the Logan Square Boys and Girls Club’s Barnet Hodes Sculpture Garden, this sculptural bench and fountain project holds the distinction of being the city’s first freestanding, community-built artwork-- a feat that involved the use of reinforced concrete, landscape design, and mechanical and electrical engineering. The undulating seats evoke the shapes of reclining figures: the glass mosaics in the fountain basin recall Taino designs and symbols. The form of the work was inspired by Pedro Silva’s Grant’s Tomb Mosaics (1972-1974) and Antonio Gaudi’s Güell Park ceramic-fragment-encrusted benches (1900-1914), as well as by the work of David Harding in Glenrothes, Scotland, who introduce the Chicago Mural Group to concrete as a community art medium in the 1970s.

Boys n girls club statue park 002

Hey, I'll take any inspiration that comes my way these days.  Here's hoping you find me traveling off the beaten path more often in the coming days.

Wednesday, July 2, 2008

Slightly better news for Chicago from R|E|A|L

From the Regional Economics Applications Laboratory, Institute of Government and Public Affairs at the University of Illinois on behalf of the Illinois Association of Realtors, some news that sales in May were slightly higher than in April.

Housing sales continued to decline in April and May compared to April and May of 2007, but the number of homes rose 17% in Illinois and a little less than 14% in Chicago from April to May, 2008.

Two main factors have been identified by the authors of the report:

An 11.5 month supply of homes are on the market.  The outlook appears grim as a large number of foreclosed homes are coming on the market and more are expected.  The report indicates that foreclosure filings were up 65% in April compared to April, 2007.  A survey of households indicates that the number of people planning to buy a home within 6 months has fallen from 3.4% in March, to 2.5% in April, to 2.1% in May.

The other factor is economic news.  The national unemployment rate jumped to 5.5% with the number of unemployed rising by 861,000 in May.  Economists and analysts were surprised to hear that the Illinois economy added 4,000 jobs in May, however.

With this news, analysts are kicking the projected real estate market recovery into 2010 rather than in 2009.

 

Monday, June 30, 2008

In Chicago, Demand remains tepid as falling prices hurt confidence

Your guides participate in and receive a survey from our friends at Credit Suisse (formerly from Bank of America) who ask 2,500 Realtors in the US top 20 markets about what they are experiencing in the Real Estate Market.  The survey shows trends on a month by month basis.

In Chicago for the month of May traffic remained unchanged at weak levels from April.

Agents said buyer confidence remains very weak as many potential buyers are overwhelmed by the combination of continued price declines and a deteriorating economic outlook. According to one agent, “People are waiting for prices to go down further, as they are convinced it will get worse before it gets better.” In fact, one of the only agents satisfied with current traffic levels dealt solely with foreclosed properties and has benefited as an increase in vulture buyers has accompanied rising foreclosures. We think improved affordability from a combination of lower prices and lower mortgage rates is needed before we see any sustained improvement in traffic.

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Thursday, June 26, 2008

This weekend in Chicago: The fests keep getting BIGGER...

So, weary festival warrior. You thought you might get a break one of these weekends.  But, NO!  The festivals keep getting larger.  This weekend brings you the two King Kong's of Chicago Festivals.

Tickets

First up:

Opening Weekend for the Taste of Chicago in Grant Park.  Acres and acres of live music, crowds, food-on-a-stick, crowds, heat, crowds, all culminating with the HUGE fireworks display on the 3rd of July.  (Rain date, July 4th.) 

Samosa

Umm, did I mention street closures?  Pretty much all the streets that go through Grant Park: Columbus, Jackson, Monroe, all the way to Balbo are closed. 

Check out the cool interactive map.

Taste of Chicago opens Friday, June 27.  Open Daily starting at 11:00 am for you downtown workers.

Next:pride-parade

The 39th Annual Gay Pride Parade in Lakeview.  Join nearly a half-million of your closest friends and mob the sidewalks along Halsted, Broadway and Diversey to watch Chicago's largest parade on Sunday, June 29.  The parade (theoretically - you know the gays) starts at Noon at the corner of Belmont and Halsted. 

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Look for your guides on the @properties float which should attract your attention with an ear-splitting sound system.

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Keep your eye out for @properties founder, Thad Wong, as the consummate attention junkie will be found running alongside the float handing out hats, beach balls or at least his business cards.

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The crowds paralyze East Lakeview starting at 10:00 am on Sunday, so don't even think about trying to drive across the neighborhood.

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Honorable Mentions:

  • BAM ! Fest in Roscoe VillageRoscoe Village will celebrate its 2nd annual Belmont Arts & Music Festival (BAM!) as it livens up the neighborhood streets on June 28th and 29th. Bursting with local artwork, music, food and spirits along Belmont Avenue running west from Damen, BAM! is a reflection of the diverse and vibrant arts scene in Roscoe Village.  (Belmont to Roscoe, near Damen.)
  • White Sox vs. Cubs in the second half of the Crosstown Classic this weekend on the South Side at US Cellular Field.  Go Cubs!
  • Fifth Annual Randolph Street Festival:  Formerly known as the Chicago Antique Market, this European-style indoor/outdoor fair showcases antiques and vintage collectibles from more than 200 dealers along Randolph Street, between Ada Street and Ogden Avenue.

Get out there and have some fun!

 

Wednesday, June 25, 2008

Street names in Chicago. K-town; and why there's no Q-town.

K-Town, Chicago

Did you ever wonder how all the streets got named in the section of Chicago where all the names start with the letter 'K'?   Otherwise known as K-town? 

Starting at just west of Pulaski, and extending for one mile, all the north-south street names begin with the letter 'K'.  And immediately following, all the streets start with 'L'.  There's also an 'L' section and and an 'O' section.  But no 'Q's.  (We could make a claim for copyright infringement against the unfortunately named Boy Band "O-Town."  Don't follow the link. It's bad.)

Even more interestingly, the plan was to start naming the north-south streets with the letter 'A' at the Illinois-Indiana border.  Each letter was supposed to be used for one mile, and then the next letter would begin.  On the south-east side of Chicago, there is a section of Chicago with several streets starting with the letter 'A' - primarily in Hegewisch.

But residents that lived in the older sections of Chicago that would have had to change the names of their streets to begin with the letters 'B' through 'J' objected, and the plan was not implemented in those neighborhoods.

How handy to know that when you hit Kostner, you are 11 miles west of the Indiana border.  12 miles when you hit Landers.  13 at Mango (I am not making this up.)

Alas, the letter Q would land west of O'Hare Airport in an undeveloped forest preserve and partly outside Chicago.

 

Tuesday, June 24, 2008

Hey, where did the seasons go?

Time sure flies!

I should have been paying attention.  Season's change.  It takes a while to sell out a development.  I took the photographs for the Mansions at Leland Hall back in January.  I wish someone would have reminded me how ridiculous the snowy building shots look on a nice sunny June Summer Day.

Here's what the place looks like today:

Leland Summer 010 

At least from the photo below, you can see the whole building without all that pesky foliage blocking the view.  Who needs leaves anyhow?

3100 Leland ext2 (Large)

Please bring this to my attention the next time you see this happen on my website?

 

Bad Real Estate Photos - a continuing series

blurry_living

blurry_fridge.jpt

I have not changed these photos in any way.  These are for a property that is currently for sale in Chicago and these are the marketing photographs that the listing agent uploaded into the MLS for publishing to the web.

 

Friday, June 20, 2008

Open House on Saturday, June 21

942 North Fairfield

The Fairfield Greystone

Open House on Saturday from 11:00 to 1:00

Two beds from $255,000 and one duplex left for $325,000

www.fairfieldgreystone.info

 

2034 West Arthur & 6504 North Seeley

The Warren Corner

Open house on Saturday from 11:00 to 1:00

1 bedrooms from $135,000

2 bedrooms, 1 bath from $155,000

2 bedrooms, 2 baths from $215,000

www.warrencorner.info

 

Tuesday, June 17, 2008

It's not easy to find a foreclosure deal in most Chicago neighborhoods

It has come up in a couple of conversations with clients recently, as well as a discussion during a recent office meeting, that buyers are asking about locating homes in foreclosure in order to get  a deal.  It turns out that they're not quite as easy to find as you might think.

First, one important statistic:  Half of all foreclosures are occurring in six states.  Those states are California, Florida, Arizona, Nevada, Michigan and Ohio.  (CNN Money)

All the other foreclosures in the US are divided among the remaining 44 states.

A personal anecdote:

One of my buyers asks regularly about locating a foreclosure deal.  Working at odds, however, is her desire to live in the Gold Coast. 

Well, they don't call it the Gold Coast for nothing.

Most of the condominiums we have seen are for sale by sellers making a lifestyle choice, not out of necessity.  Realtors showing us their listings in the Gold Coast tell how the condo is their sellers' second or third home; an in-town apartment or perhaps a former first home before relocating.  Almost universally, though, no tales of woe or hardship.  Some of these homes are also listed for rent.  Some owners will simply keep the home empty or enjoy it for another Chicago Summer.

Some of our younger buyers are devotees of Robert Kiyosaki's and Sharon Lechter's famous book "Rich Dad, Poor Dad" which goes into great detail about finding the best investment deals.  Invariably this leads to the foreclosure discussion.

Second important statistic:  A foreclosed property is usually available for at least a 30% discount.  Often more.

Third important statistic:  There are plenty of foreclosures in Chicago. (Stats from RealtyTrac.)

The Catch:  Most of our company's clients are home buyers and are searching for a place for themselves and their family to live.  Take a look at the map of where these foreclosures are taking place (Map from RealtyTrac.) The areas with the highest concentrations are the south and west sides.  But the buyers don't want to live where the foreclosures are; they are asking for traditional lakefront neighborhoods.

When confronted with these facts, some of these buyers stubbornly remain insistent.  And homeless.

Another factor to take into consideration when pursuing foreclosed properties is the condition of the property.  In most cases, the property is neglected.  In some instances, ransacked. 

The best condition I have ever seen of a foreclosed property was a condominium in an amenity high-rise in Edgewater.  A small investor purchased a condominium in original condition and began renovating it in the hopes of fixing it up and selling at a profit.  When the project took more time and resources than he predicted, he stopped making payments and the condo was foreclosed on.  A buyer of mine who already lived in the building purchased the unit and finished the renovations.

Many foreclosed properties in Chicago are houses or small apartment buildings.  If vacant, these tend to fall into dis-repair quickly.  Our advice is that chasing deals on properties in distress is best left to the most experienced investors & rehabbers.  A Chicago winter can be very hard on a building with no running utilities.  Burst pipes, broken windows, vandalism are just some of the problems that foreclosed and neglected buildings are subject to.  They're not 30% to 50% off for no reason.  Even experienced investors can be surprised by how much time and money it can take to get a property back in good condition for renting out or selling at a profit.  Cost overruns, improper planning, shortages of man-power or materials, and even City bureaucracy can stymie you at an inopportune time sending your finances into peril.  It's all to easy to fall a few months behind schedule and a few thousand bucks in the hole and the property is right back in the bank's possession again.

Check with your local expert in your marketplace during the planning stages of your new home search.  Even though foreclosures are everywhere in the media, they might not be so right where you're looking for your next property.

 

Sunday, June 15, 2008

Happy Fathers' Day - Some background on your Guide

Fathers' Day 2008

Dedicated readers who truly have too much time on their hands, along with a few of my clients, have asked on occasion about the quote in my bio about “having real estate in my blood for my entire life.”

This Fathers' day post is a perfect time to look back at how it all started.

I think my earliest real estate development memories begin with our family building a new house across town from the first house I remember. My father and uncle each purchased lots in a suburb of Chicago in the early 1970's as potential investment lots or as the site for a new house. My uncle decided to sell and selected somewhere else to settle; my dad chose to build on his.

I remember this lot being one of the last undeveloped pieces of land in our town. It was quite a favorite play space for neighborhood kids. A city park was located only a block away, but I remember all the neighborhood kids playing on the lot rather than at the park. Perhaps it was the unkempt and uncontrolled nature of the lot. Though only 100 feet by 65 feet, at the time it seemed enormous – with a wild slope to the rear and even a dirt dune for climbing or BMX bike riding. It was regarded by the neighborhood kids as quite the tragedy that construction began on a new home on this treasured play area.

It was completely natural for my father to take both me and my sister, Jeanne (VP, Finance, Fancy Schmancy Downtown Developer), where we watched the whole process for the first time. Looking back, I distinctly remember excavation being punctuated by hours spent playing on bulldozers and earth moving equipment. It seemed like forever for the puring and curing of the foundation. Thinking back, this must have been the typical late fall pour before the winter, with a hiatus until the weather broke again in Spring. Framing was quite a marvel to behold.

Installation of major systems – electrical, heating, plumbing, each brought new revelations. Leftover junk became treasure – I collected punch-out slugs leftover from electrical boxes and saved them for years. The neighborhood kids warmed up to us as they were welcome to climb all over the construction as well as get to know the new playmates that would eventually move in.
At the same time as the house, Dad was also working on the first of four memorable construction events that I can recall. I am sure there were more, but the four were milestones in our childhoods.

First was a racquetball club in Westmont. The size and scale of this building was wondrous, what with nearly 30 foot tall ceilings in the courts and enormous glass walls for viewing. I can only describe the the interior as the ultimate in late '70's chic. Envision the d├ęcor influenced by both whoever imagined the set for the original movie version of “Hairspray” along with a healthy dose of modernism inspired by the Picasso in downtown Chicago. Shagadelic, baby! (Indeed, the vending area and lounge were finished with textured and patterned carpet that seamlessly scaled up the walls.)

Though I never saw our family name in the newspapers nor was anyone ever indicted for bestowing political favors, somehow my father became aware of the development and construction of what was Illinois Highway 5 which is now I-88 running roughly parallel to Ogden Avenue through the western Suburbs. Envisioned as the main artery for a High Tech Corridor, major technology companies such as Amoco Oil and Bell Labs were planned and built near major interchanges in Oak Brook, Westmont, and Naperville. Somehow dad know where and when the major interchanges were going to be located and bought up the parcels that he could afford.

Next door to the Racquetball Club in Westmont, Dad and my uncle developed a small office park. The small one and two story office parks in a landscaped setting that were all the fashion in the late '70's and through the 80's. I don't know if anyone goes for this kind of space anymore, but at the time was a perfect setting and product for the booming small business economy.

Next out in Naperville, Dad started on another, grander, racquetball AND tennis club (very exciting and innovative) along with a strip mall next door.

Today, the whole concept of a strip mall is quite routine. But back in the day, I remember that we were the landlords for a Chines Restaurant, a Quick Printer, AND a dry cleaner. This was quite impressive to me.

Dad and my uncle held onto most of these developments and managed them, but at some point during my High School career, Dad went corporate and took a job as a commercial appraiser for one of the downtown appraisal research firms. During my College years, I think the mini-empire was slowly sold off.

When I returned from the U of Iowa, we still owned the Westmont office park, and Dad had returned to working for himself. The brothers had sold the racquetball club to the Westmont Park District (I think it's still there today.) I went to work at the family owned commercial Real Estate Brokerage which was just breaking into Residential Sales. I think it was East-West (no relationship with Steve West, my current Real Estate partner) Darrow Realty.

The Naperville club was converted into an office building and I think the strip mall is still there. Oddly, these two are the smallest buildings around as the Naperville Road interchange on I-88 is home to some pretty famous corporate HQ's and is surrounded by towering hotel towers and mega-malls.

Shortly thereafter, Dad decided to close the residential brokerage and I located a job with a Relocation Company. The Relo company had me first in Lombard, then Naperville, Downers Grove and Oak Brook. At some point, I transferred to the Chicago office. It wasn't long thereafter that I switched to brokerage and have stuck with the same career ever since.

Dad retired to the Gulf Coast of Florida, and in keeping in character, started buying up land, lots and pre-consruction condo's in advance of the coming aging Baby Boomer migration to the south. I don't think I envision myself in the "Republican Riviera" but I certainly wish I sent some cash that way a few years ago...

Saturday, June 14, 2008

Interactive map of Chicago's neighborhoods showing number of units sold in 2007

Another fun widget from our friends at ChicagoCondosOnline.com. This widget displays the number of units sold in 2007 in each neighborhood of Chicago and its ranking.


Friday, June 13, 2008

Open Houses for the weekend June 14 & 15

Saturday, June 14

The Warren Corner Condominiums

Open from 11:00 to 1:00

2034 W. Warner & 6504 N. Seeley

Newly renovated condominiums from $155,000. Two bedrooms from $199,900

www.warrencorner.info

Sunday, June 15

2946 N. Wood Street, Unit D

Open from 1:00 to 3:00

Wellington Park Townhome. Two beds plus den, two and a half baths, on four floors of living with a two car garage plus a two car driveway. Just dropped the price to $539,900 for a really fast sale!

www.wellingtonpark.net

Thursday, June 12, 2008

Another busy weekend in Chicago. Things to do. Or avoid.

This weekend brings a full schedule of fun things in Chicago.

Or perhaps you can avoid the congestion and street closures that accompany these festivals.

Thursday Night

U.S. Air Guitar Championships Regional Finals - 9:00 pm at the Metro

www.usairguitar.com and also check out the Blog

Friday Morning

Bike to Work Day Rally - 7:30 am at Daley Plaza

Chicago's Bike to Work Day website

Live music, free T-shirts, food and free breakfast for dedicated souls who ride their bicycles to work on Friday. 

Not to be too much of a party pooper, but it IS Friday the 13th.  And the weather looks crappy.  Your guides are leading a tour of Rogers Park on Friday, so we'll be in the gas guzzler.

Saturday

Resurrection Lutheran Church is proud to announce the 6th annual Wrigleyville SummerFest.

June 14, 2008 from 11:00 a.m.–10:00 p.m. on Seminary Avenue at Roscoe Street.

In addition to the bands and the Kids' Zone, plenty of food and beverages will be available, and many local vendors will be showcasing their products and services. We are proud to partner with Chicago Beverage Systems to provide Miller Lite, Miller Genuine Draft and Heineken beers this year.

Friday Night, Saturday and Sunday

59th Annual Old Town Art Fair - Just west of Wells & Lincoln and north of North Ave.

(Do not try to drive anywhere near here this weekend)

The tree-lined streets of Chicago's historic Old Town Triangle District will again provide a charming setting for the 59th Old Town Art Fair, the oldest and most prestigious juried outdoor art fair of its kind. Produced by the Old Town Triangle Association, this annual fundraiser benefits a host of local schools, youth groups and neighborhood preservation projects. With the support of more than 750 neighborhood volunteers, this year's Fair will be held on June 14 and 15 from 10am to 6pm rain or shine. The main gate is at Lincoln and Wisconsin Avenues. Requested donation is $7.00 ($5.00 after 4:00) ; there is no requested donation for children 12 and under.+Neighborhood parking is extremely limited. Public transportation is highly recommended.

Saturday and Sunday

43rd Annual Midsommarfest in Andersonville - Clark at Foster

For the Northsiders:   Midsommarfest is one of Chicago’s most unique street fairs. Born out of Andersonville's Swedish heritage, Midsommarfest retains its quaint, international flavor. Old-world Swedish traditions, including a festive dance around the Maypole, are incorporated into an unrivaled array of entertainment for families and adults.

Interactive map of Chicago Neighborhoods & sales rank

Another nifty widget from our friends at ChicagoCondosOnline.com that ranks Chicago's neighborhoods in sales and price. Remember that these figures are for condos and townhomes only (Type 2/attached).



Tuesday, June 10, 2008

It slowed down in the real world; Online stats back up seat of the pants.

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Online viewing of Real Estate seems to be on the decline just as it has felt in the real world in the past few weeks.  From a high of nearly 8,000 views per week, viewership seems to have fallen about 1/3 to approximately 5,000 views per week. 

Viewing in person seems to have fallen off even more than the 30% drop off in online viewership.

At some point every summer, the level of traffic at open houses eases off about 50%.  Throughout summer, we will still get good traffic from phone calls and Realtors, but curious buyers just getting started who are willing to drive around and explore different neighborhoods have their wish lists and goals focused by this time in the shopping season. 

Stats from Realtor.com for  25 active listings.

Thursday, June 5, 2008

Holy Smokes, Even More to do in Chicago this weekend

Up northwest in Jefferson Park - Jeff Fest

When it comes to musical diversity, the 8th annual Jeff Fest (Jefferson Park Community Festival) on Chicago's northwest side pretty much has something for every taste!

Among the performers at the three-day event (Friday-Sunday, June 6-8) will be legendary British blues-rockers Foghat& Chicago party band Dick Holliday & the Bamboo Gang& good-time Southern rockers Heartsfield& the funk of TimePeace& the Latin stylings of Rico& and '60s music cover band The New Invaders.

In addition to music, Jeff Fest will feature food booths from the neighborhood's eclectic mix of restaurants as well as arts & craft vendors and activities for kids.

Not quite so northwest in Lincoln Square - Ribfest

Lincoln / Damen / Irving Park Intersection.Two exciting days of food and fun! Two stages of live music with 20 bands! It doesn't get any better than this.

Kick off the summer at Ribfest Chicago! What started in 1999 as a community block party has exploded into Chicago’s most anticipated street festival. This hot summer event offers something for everyone -- rib aficionados can vote for the restaurant with the “Best Ribs,” not to mention, fest goers can also honor restaurants with a “Fest Fave” award (favorite food item at the festival) and “Hot Off the Grill” award (best overall griller). Love to dance in the streets? In true Ribfest tradition, we’re bringing you some of the best music you’ll hear all summer -- and won’t hear at other festivals! Bring the kids! Our famous Kids Square provides hours of entertainment for kids of all ages … allowing children to slide, climb, run, complete, jump, ride, sing and dance all weekend long. Ribfest Chicago promises to provide a memorable weekend of lively music, family fun and satisfied appetites as we celebrate ten years of unforgettable barbecue.

Does "Short Sale" belong in Real Estate Advertising?

foreclosure-home

So "Short Sales" and Foreclosures are all over the news lately.  These terms are also being tossed about an awful lot in Real Estate Advertising and Marketing.

I wonder why Realtors and Real Estate Companies are so willing to advertise the distressed nature of some of the homes for sale?

A number of real estate experts have been quoted on regional blogs and in local media that the sales price for homes that are identified as "Short Sale" or "Foreclosure" properties is in the range of 20% to 43% below the value established in a CMA (Comparative Market Analysis) of similar homes in the same area.

I can understand that a home that has already been foreclosed on, and has been vacant for some time, may very well need to be discounted due to the home falling into disrepair from being vacant for a period of time.

But what about the home where the seller has fallen behind on their mortgage payments and the foreclosure process is just getting underway?  Here in Illinois, it's possible for a home owner to remain in possession of a property for as long as a year before the foreclosure process results in the final eviction of the residents of the home. 

I sold my first pre-foreclosure condominium about 13 years ago here in Chicago - way before the huge wave of foreclosures happening right now.  The owner of a condominium in a desirable high rise in Lincoln Park lost her job and couldn't make her mortgage payments.  As the mortgage company started the foreclosure process the seller listed the condo for sale with an aggressive Re/Max agent who marketed the home through all his company's normal marketing channels.  None of the marketing for this condo mentioned that the home was in foreclosure, and my buyer paid full retail price for the condo affording the seller a small profit after paying off her outstanding mortgage. 

As the condo was in perfect condition and completely salable, the question comes to mind: 

Should my buyer and I have known about the status of the mortgage before making an offer?

If so, why?

My company has a whole company e-mail address for agents to get the word out about open houses, new listings, company announcements and the like.  An informal survey of the bulk of the email received yesterday and today reveals four emails addressed to the company promoting a new listing that is in pre-foreclosure or will be a short sale.

Other blogger's have noticed a marked increase in the advertising and marketing of properties and their pre-foreclosure or short sale status through the Multiple Listing Service and even in their newspaper advertising.  Yikes!  I have not seen the practice being adopted too frequently here in Chicago.  Yet.  But a search of all property types, for the words "foreclosure" or "short sale" reveals 161 listings.

But this begs the question:  If you have a listing where the seller is having trouble making payments on the mortgage but the home is in otherwise perfectly marketable condition, should the Realtor reveal the status of the mortgage in the marketing for the home?  Even though the disclosure of this information will virtually guarantee that the home will sell for a discount of 20%, 30% or even 40% off of its full market value?

I am sure I know the answer to these questions.  It's : No.

Here's one for you, though:  Lots of buyers love to ask why the seller is selling?

What do you say when a buyer asks you why the home is for sale?  Or why the seller is selling?  Or why are the sellers moving?

Or even more direct:  Is the seller in foreclosure?  Is the home in foreclosure?

My favorite answer when the question is asked during a home showing is:

"Why, they've decided it's time to move!" Delivered in the sweetest voice and with a broad smile like it's the most natural answer in the world.

Usually this will stop the line of questioning.  Sometimes a potential buyer will follow up with a serious look and repeat the question.  In those instances I'll meet their icy stare and tell them that I can't answer the question.

About one in 100 will ask me why? 

Of course it's because it's my duty to promote the best interests of my clients.  And revealing anything about their reasons and motivations for moving is a violation of my duty to them.

Which brings us back to the "Short Sale" or foreclosure status.  Doesn't it make sense that announcing to anyone and everyone this info also violates the duty that you have to your sellers?

I'd love to hear from any of you especially if you're in the real estate industry. 

Wednesday, June 4, 2008

Chicago makes it into Final Four for Olympics in 2016

Olympics

Announced today by the International Olympic Committee, Chicago is in the final four cities under consideration to host the 2016 Olympics.

This means that the IOC believes that Chicago can technically meet the demands of being a host city, however their message also indicated that they believe that Chicago has some weaknesses to overcome.

Not making the cut today were  Prague, Czech Republic; Doha, Qatar, and Baku, Azerbaijan.

A final decision should be made in November 2009.

Check out the complete announcement at Crain's

Tuesday, June 3, 2008

More stuff to do in Chicago this weekend - Blues Fest

It certainly doesn't feel like it with a cold front swirling over the great lakes and temps are hovering in the 50's, but Summer is officially now in full swing.  Chicago's 25th Annual Blues Festival is this weekend where you can hear live legends like B.B. King, Buckwheat Zydeco and Chicago favorite Lonnie Brooks all in Grant Park and all for free.

Blues Fest 25th Annual Chicago Blues Festival, Thursday, June 5 through Sunday June 8, 11:00 a.m. until 9:00 p.m. each day, Free admission, Grant Park

Thursday, June 5
11:00 a.m. - Blues in the Schools w/ Katherine Davis, Erwin Helfer, Eric Noden and the Stone Academy Blues All Stars, U.S. Cellular Front Porch Stage
12:45 p.m. - Professor Fernando Jones Columbia College Blues Ensemble, U.S. Cellular Front Porch Stage
2:30 p.m. - David "Honey Boy" Edwards and Friends (Billy Branch, Louisiana Red, Paul Kaye, Aron Burton, and Johnny Yard Dog Jones), U.S. Cellular Front Porch Stage. Edwards is one of the last original delta blues guitarists still currently performing, so be sure to catch him while you can.
2:30 p.m. - Keith Frank and the Soileau Zydeco Band, Louisiana Bayou Station and Social Club Stage (Also playing the U.S. Cellular Front Porch Stage, Friday, June 6, at 11:00 a.m. and the Gibson Guitar's Crossroads Stage, Saturday, June 7 at 12:00 p.m.)
4:00 p.m. - Diamond Jim Greene, Maxwell Street Corner Stage
8:30 p.m. - Johnny Winter with James Cotton, Petrillo Music Shell. "Bring your sunglasses to keep the glare of his albino skin from blinding you." - Chuck.

Friday, June 6
2:30 p.m. - Louis Jordan: Hitmaker of Blues, Jazz and R&B, a discussion with Howard Mandel, Bill Milkowski, Lonnie Brooks, Bob Porter, and Ernest Dawkins, The Zone Perfect All-Natural Nutrition Bars Route 66 Roadhouse. July 8th would be Jordan's 100th birthday, so it's a good time to catch this discussion on the man often called "the father of rhythm and blues."
2:30 p.m. - Omar Shariff, Louisiana Bayou Station and Social Club Stage (Also playing the same stage on Saturday, June 7 at 4:00 p.m.; not to be confused with actor Omar Sharif)
4:30 p.m. - Jim O’Neal moderates “'Sweet Home Chicago': Anthem or Cliché?" featuring Billy Branch, Bill Gilmore and Bill Dahl, The Zone Perfect All-Natural Nutrition Bars Route 66 Roadhouse. Another great discussion, this time on the legendary blues song.
7:25 p.m. - Eddy “The Chief” Clearwater’s West Side Strut with special guests Lonnie Brooks, Jimmy Johnson, Ronnie Baker Brooks, Otis Clay and Billy Branch, Petrillo Music Shell

Saturday, June 7
2:30 p.m. - Juke Joint Duo: Cedric Burnside and Lightnin' Malcolm, Mississippi Juke Joint Stage (Also play the same stage on Sunday, June 8 at 1:30 p.m.)
8:35 p.m. - Buckwheat Zydeco, Petrillo Music Shell

Sunday, June 8
12:00 p.m. - Rodney Brown’s salute to Louis Jordan, Gibson Guitar's Crossroads Stage
2:30 p.m. - Tony Joe White, U.S. Cellular Front Porch Stage
8:15 p.m. - B.B. King, Petrillo Music Shell.

Chicago Condos Market Overview

From our good friends over at Chicago Condos Online

Stats for condominiums located in Chicago for the Month of May.

Comparing 2008 to the same time last year, the total sales volume appears to be dramatically down, but prices are ever resilient showing a modest 2% gain.  It appears that anyone who doesn't need to sell is simply holding onto their condominiums until better days come along, and the units that do sell are appreciating slightly.

Year over Year - May 2008 - May 2007

Category May 2008 May 2007 Change
Actives 14,227 15,020 -5%
New Listings 3,455 4,167 -17%
Closings 1,247 1,966 -37%
Median Sales Price $329,000 $299,000 +2%
Total Sales Volume $496-million $659-million -25%
Avg. Days on Market 126 123 +2%
Supply 9.5 months 9.3 months +2%

 

From April to May it appears that sales increased along with prices.  Time on the market increased a bit along with months supply of inventory, but the market picked up during May compared to April.

Month over Month - May 2007 - April 2008

Category May 2008 April 2008 Change
Actives 14,227 14,127 +0.7%
New Listings 3,455 4,464 -23%
Closings 1,247 1,148 +9%
Median Sales Price $329,000 $320,000 +3%
Total Sales Volume $496-million $441-million +12%
Avg. Days on Market 126 123 +2%
Supply 9.5 months 9.4 months +1%

Sunday, June 1, 2008

Printer's Row Book Fair, Chicago, next weekend


Printer's Row Book Fair, originally uploaded by kookybites.

Coming in one week is Chicago's Printers Row Book Fair. Your guides thought it was this weekend and were remiss in not reporting on it. No fear, however, it is scheduled for next weekend, June 6 &7.

The Printers Row Book Fair was founded in 1985 by the Near South Planning Board to attract visitors to the Printers Row neighborhood (once the city's bookmaking hub). By 2002, it had grown to five city blocks (on Dearborn, from Congress to Polk), attracting more than 190 booksellers from across the country displaying new, used and antiquarian books, and featuring seven stages with more than 90 free literary programs. It is considered the largest free outdoor literary event in the Midwest-drawing more than 90,000 book lovers to the two-day showcase.

Friday, May 30, 2008

Open Houses for the weekend May 31 and June 1

Sunday, June 1

942_N_Fairfield_Unit_2F_FrontView (Large) 942 North Fairfield - the Fairfield Greystone

Open from 11:00 am to 1:00 pm

Newly renovated Greystone building featuring brand new condominiums with two-beds, two-baths from $255,000.

www.fairfieldgreystone.info

2946_D_wood 003 (Large) 2946 North Wood, Unit D - Wellington Park Townhome

Open from 12:00 to 2:00 pm

Contemporary townhome in Wellington Park. Two beds, plus den, plus penthouse family room. Front yard, front balcony plus roof deck. Room for 4 cars in your 2-car garage plus 2-car driveway. List price $539,900.

www.wellingtonpark.net

1800_W_Erie_St_14_FrontView 1800 West Erie, #14 - West Town Penthouse

Open from 2:00 to 4:00 pm

Top floor condo overlooking Chicago Skyline with an amazing rooftop deck above. Two-beds, two-baths with gorgeous finishes. List price $400,000.

www.darrowwest.com/1800_w__erie,_.htm

Thursday, May 29, 2008

Olde Tyme Chicago on Lincoln Avenue in Lincoln Park

Lincoln Avenue north of Fullerton was transformed late last week into a bygone era of newly refrigerated movie theatres and gangsters for the filming of the new John Dillinger biopic starring Johnny Depp, "Public Enemies."

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The Biograph is actually the Biograph Theatre. It's a bit more modern today. Still air-conditioned.

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The Chop Suey restaurant is actually a Burrito joint!

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The fake trolley tracks screwed up traffic for nearly a week!

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That's how they do it!

Meeting the parents when the kids are shopping for real estate

I had a showing yesterday with a delightful young couple who returned to the Wellington Park Townhomes for a second viewing of a few of our units for sale.  Both members brought their parents and a brother and sister.  It was a three-car-full entourage!  Meeting the parents is always a bit of a gamble.   Teresa Boardman over at the St. Paul Real Estate Blog recently

posted an excellent article about meeting the parents.

Sometimes parents talk the children out of buying a particular home, other times they say go for it.  I would like to make one suggestion though to parents and their twenty somethings.  Shopping for a home is comparison shopping.  Buyers compare one home to another and are usually working in a particular price range, looking in a certain neighborhood and looking at a limited style of house that fits their needs.

If the parents have not been kept in the loop they don't have anything to compare the home to.  The children select a home and bring the parents but the parents don't understand that the home was in the best location, best condition and for the best prices as compared with the other 25 that the buyers looked at.  The parents see the home and raise objections.  The buyers explain that they really think the home is the best one for them.

To the buyers I suggest keeping the parents in the loop.  Email them links to some of the homes that are being considered.  Tell them about last weekends adventure in house hunting.

Mom from yesterday's showing would not stop asking everyone (me, the sellers, the buyers' agent - Brian, random neighbors outside, the other child in the couple, the other parents...) if they had seen the front page article from USA Today.  It was all about how economists were all atwitter whether the real estate market had finished crashing or not.  Also how prices have sunk 14% during the first quarter 2008 compared to Q1 2007.

It's just like our distinguished founder, Thad Wong says: 

Talking about nationwide real estate statistics is like talking about the average temperature in the US in January.

Of course, there was no convincing Mom that in Chicago, we have a slower market, but with slight price appreciation, or that in the Lakeview neighborhood, the market is less sluggish than the rest of the city with market times only 10 to 15%  longer than last year, and with price appreciation.

Teresa said it best:

Parents need to understand that the buyers have spent many hours shopping on the Internet and visiting homes in person.  They have done their homework and I have provided them with a great deal of information.  The process is almost like a treasure hunt and when the children bring you along to see the home they would like to purchase they have put a lot of thought into it.  Without anything to compare it to parents should point out the good and the bad as they see it but should also recognize that they have not seen enough homes to judge weather or not the home their children have selected really is the best home.

Wednesday, May 28, 2008

John McCain advisor Phil Graham still lobbying for banks, but that's not the interesting part...

MSNBC's Keith Olbermann reported on Tuesday on former Senator Phil Graham's role in the deregulation of commercial banking which had been strictly regulated since shortly after the Great Depression, as well as Mr Graham's role as an advisor on national finance issues to the McCain campaign.

Notwithstanding the conflict of interest in having a current lobbyist for UBS Bank as an advisor to the campaign, what is more interesting to your guides is that Senator Graham's efforts towards deregulating the commercial finance system could be a key factor in today's mortgage crisis.

Senator Graham's efforts at deregulation introduced the entire system of mortgage backed securities whereby banks could bundle mortgage instruments with other similar mortgages, and sell them as securities.


More tenants sign up for space in Chicago's Block 37

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Your guides were downtown last night to take advantage of the Memorial Day sales at Macy's and catch the 7:30 performance for Wicked and were delighted and wistful at the progress at Block 37. 

For my entire life, the block on the west side of State Street from Randolph to Washington has been vacant.  There was never much going on in Summertime, but in Winter, the city opened up a makeshift ice skating rink.  The empty space afforded good views both of and from Marshall Fields (now Macy's) department store.

Anyhow, there are about 6 stories of glass and steel rising from the street now, crowding Macy's (see the green clock in the distance) and the Ford Oriental Theatre across the street.  What's amazing is that there has been an entire vacant city block right in the heart of downtown Chicago for 40 years!

New anchor tenants include a snazzy new CTA train station - transfers, tourist tickets, and airport check-in, the new street-level glass studio for Channel 2-CBS/WBBM (a-la-channel 7 and NBC's Today Show in New York) and the newly announced Puma Sports Wear store.

Cain's reports that the developer is also speaking with computer maker/retailer Apple to take 6,000 square feet for a Chicago flagship store.

Read more over at www.glasssteelandstone.com.

Tuesday, May 27, 2008

Chicago "No Parking" street signs contain new fine print...

Blog May 27-2008

Always a fixture in Chicago's neighborhoods, the "Street Sweeping - No Parking" signs have a new look this Spring.

The fine print (or not-so-fine-print) foretells of new photo enforcement. No longer will a lazy officer slowly troll down side streets hand-writing (gasp - the horror) parking tickets for unfortunate residents who didn't see the sign put up the night before. Nope, a high-tech van simply zips through the neighborhood snapping photos of every license plate on the street. You'll get your parking ticket in the mail.

How convenient!

Sunday, May 25, 2008

Cool stuff in Lakeview & Chicago on Monday, Memorial Day


events, originally uploaded by digifun.us.

The Wellington-Oakdale Old Glory Marching Society (WOOGMS) parade, a Memorial Day tradition in Chicago's Lake View neighborhood, steps off from Pine Grove and Wellington at 11 a.m. on Monday. It will end with entertainment that includes the Jesse White Tumblers on the lawn of St. Joseph Hospital, 2900 N. Lake Shore. Visit www.44thward.org.

Remember - everybody walks; nobody watches!

A special recognition of the Illinois Gold Star Families who have lost loved ones in military conflicts since Sept. 11, 2001, will be part of the Chicago Memorial Day wreath-laying ceremony and parade on Saturday. The ceremony will begin at 11 a.m. at the Eternal Flame on Daley Plaza, Dearborn and Washington. The annual Memorial Day Parade steps off at noon on State and Wacker, and heads south to Van Buren. Call (312) 744-3315 or visit www.cityofchicago.org/specialevents.

Saturday, May 24, 2008

Chicago still ray of light in gloomy Real Estate Market

The National Association of Realtors reported Friday that existing-home sales in April dropped by 1 percent, to a seasonally adjusted annual rate of 4.89 million units, matching the all-time low set in January. These figures are nationwide.

Locally, the Illinois Association of Realtors said Friday that sales of single-family homes and condominiums rose 8.5 percent in April over March but were down more than 27 percent from April 2007.

Prices are also still on the rise. In Chicago the median price of a home increased 3.4 percent, to $300,000, from a year ago. These prices are being driven by codominium sales, which make up 64% of home sales in Chicago.

Thursday, May 22, 2008

Photo Goodness in Chicago for Thursday, May 22

On quiet, tree lined, Arthur Street in West Ridge springs forth "Arthland" - I have no idea why.  The baby cow is riding a mini-motor cycle.

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The Buddhist Temple on Ashland at Wilson is preparing for Buddha's Birthday Celebration.  This should be quite a weekend.  Happy Birthday, Buddha.

 

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Today's Lawyer Joke

Q: How many lawyers does it take to change a light bulb?

A: How many can you afford?

Thanks to Your Daily Personal Lawyer - Jonathan Dixon - link in the sidebar. Jonathan publishes daily on his website as well as hosts a "Talk to a Lawyer Night" here in Chicago once a month.

"Ask The Lawyer Night" is in session on the first Tuesdays of each month from 6:30 to 8:00 at Ennui Cafe (6981 N. Sheridan -- Lunt and Sheridan) in Chicago. Anyone is invited to stop in to ask any legal questions they have. We'll either get you an answer, or point you to where you can get an answer.

The next "Ask The Lawyer Night" is Tuesday, June 3 from 6:30 to 8:00 at Ennui Cafe!

For daily legal updates, visit his legal blog at www.yourdailypersonallawyer.blogspot.com, which is updated daily M-F. Each day he focuses on a specific area of law:

Monday's daily focus: estates, wills, trusts, and probate law
Tuesday's daily focus: condo law
Wednesday's daily focus: residential real estate law
Thursday's daily focus: landlord/tenant law
Friday's daily focus: divorce and family law

Friday, May 16, 2008

Things to do in Chicago this weekend

  mayfest_2008 Finally, Festival Season is upon us.  Closest to our neighborhood, Mayfest is held on Friday night through Saturday night in the parking lot for Augustus Burley School, at Ashland and Barry.  There is supposed to be some sort of German Heritage being celebrated here, but I couldn't find out exactly what as the website is overcrowded with logos for Hoffbrau Haus beer as well as that old German standby, Pabst Blue Ribbon.  Don't miss the "Traditional Keg Tapping" (see what I mean) on Friday at 8 pm.

 

Not so much an event, but noteworthy nonetheless, American Science and Surplus (5316 N. Milwaukee, at Foster) is having its annual scratch and dent sale.  Odd since I thought everything at American Science and Surplus was scratch and dent merchandise.  Where else on earth can you find an Ancient Radiation Meter:

Are the kids growing up with pride? Radiating good cheer? You can tell for sure with...What? It’s for nuclear radiation? An old Civil Defense meter? Bummer. Apparently, this OCD radiation meter from the Victoreen Mfg. Co. was Radiationmade to sniff out the residue of the nuclear holocaust when you emerged from your bomb shelter. Calibrated 5 r/hr (Roentgen) with a X 0.1, X1, X10, X100 sensitivity selector, it runs on (1) “D” battery (not included.) The Civil Defense yellow boxes are about 8” x 4–1/2” x 3–1/2”. It comes with complete instructions for use. The CD V–777–2 includes two 4–1/2” long x 1/2” dia dosimeters and a 2” x 4” x 4” dosimeter charger. This one is used, but it works fine, even if it looks a bit scuffed.

And in case you're still on the hunt for the perfect bargain, check out the Ravenswood Manor Annual Garage Sale.  There's a link in one of the topmost entries with a map of all the participating houses.  This is one of the oldest and largest garage sales in Chicago.  And if I do say so myself, these homes probably have some pretty noteworthy trash/treasures to rummage through.

Thursday, May 15, 2008

Open Houses for the weekend of May 17 & 18

Saturday, May 17

The Warren Corner Condominiums

Open from 2:00 to 3:30

2034 W. Warner & 6504 N. Seeley

Newly renovated condominiums from $155,000.  Two bedrooms from $200,000.

www.warrencorner.info

Sunday, May 18

2946 N. Wood Street, Unit D

Open from Noon to 2:00

Wellington Park Townhome. Two beds plus den, two and a half baths, on four floors of living with a two car garage plus a two car driveway.  Just dropped the price to $539,900 for a really fast sale!

www.wellingtonpark.net

3450 N. Ashland, #3N

Open from 2:00 to 4:00

Two bedroom, two bath condo in a new construction walk-up with an open kitchen, rear balcony, and garage parking all included.  List Price $418,000.

www.darrowwest.com/3450_n__ashland_.htm

Wednesday, May 14, 2008

More interesting stats on Chicago's Real Estate market

So the news over the last few days has not been good. The number of homes sold across Illinois, as well as inside Chicago is down from one year ago. And the average price of a home in Illinois, and in Chicago is down.

One interesting statistic is that the average price for a condominium (attached property including townhomes, condos and co-ops) in the City of Chicago is up 7%. The number that have sold in Q1 2008 is down dramatically from Q1 2007, but prices are holding up. Very interesting.

For example, in Lakeview, the price for a typical 2 bedroom, 2 bath condo is up 4% from last year, but the price for a typical single family home is down 3.3%.

Other news today, Appraisal Research Counselors report that in the Downtown area, nearly 6,000 condominiums are scheduled to come on the market as they near finishing of construction. This will be the greatest number of new condos to go up for sale in history - even counting the boom years in the early 2000's.

On the downside, sales of newly built downtown condominiums plummeted by about 83 percent during the first quarter, to 201 units from 1,207 units a year earlier, according to the same report to be released Wednesday by Appraisal Research Counselors. Yikes!

Most of the buildings that make up the figures contained in the report are already under construction, so most likely can not be cancelled. Your guides predict a mass conversion to apartment buildings later this year. These will be pretty darn nice apartment buildings as most of the condominiums under construction are quite luxurious.

Tuesday, May 13, 2008

Illinois home prices hold steady, number of sold falls dramatically

Illinois median home prices held their own in the first quarter while sales were constrained by the ongoing credit crunch and a softening economy. According to IAR's first quarter report, home sales totaled 21,576, down 27.0 percent from 29,553 home sales in the first quarter of 2007. The first quarter statewide median home sale price was $187,500, down 4.3 percent from $196,000 a year earlier. “Extreme winter weather on top of shaky consumer confidence due to rising gas and food prices and the uncertain economy affected overall home sales activity statewide. REALTORS do anticipate a boost in activity as we enter the spring housing market from pent-up demand held over for so many months,” said IAR President Kay Wirth, in the release. “The fundamental elements of a solid housing market are in place with low interest rates and ample inventory of homes.”

Home-Price-Appreciation-Chicago-IL

You can see from Zillow's latest Home Value Report the breakdown by neighborhood of home value declines.  All of Chicago's Lakefront neighborhoods posted slight gains or held prices steady in the first quarter 2008 compared to 2007. 

You can also drill down into every neighborhood at the @properties Market Report which breaks down prices, appreciation and number of units sold by neighborhood and by unit size.

Buying in Chicago? Know your closing costs.

So you've finally saved up your down payment for your new home.  Heck, you even realize that now might be a good time to buy if you have predicted that we've hit bottom and prices are as low as they're going to go.

But do you know all the costs involved in buying a new home in Chicago?  Let's dive in.

First, you'll pay your lender an application fee.  They generally run $250 to $500.  You will pay this up front at the time of your loan application.  This fee covers your credit check (around $50 worth) and the appraisal on your property.  Some lenders will credit this back to you at closing.

Most people want a home inspection.  You'll pay your inspector anywhere between $250 for a simple condo to $800 for a 4-flat building.  You'll pay your inspector up front.

Points:  Points are pre-paid interest to reduce the interest rate on your loan over the long run.  I haven't had anyone pay points in the last 10 years, so let's not worry about them.

The City of Chicago will charge you $7.50 per $1,000 of your purchase price.  Or $750 per $100,000.  On a typical $300,000 condo, this works out to $2,250 in transfer taxes.  This is the big one ~ so be aware.  (There are taxes levied on the seller as well, but let's save those for another post.)

If you put less than 20% down on your new place, you'll probably pay PMI (Private Mortgage Insurance.)  This will typically cost 0.5% to 1% of your loan at closing.  (And more over the life of the loan.)

Here in Illinois, Lawyers run the closing.  Most attorneys charge a flat fee to look over your contract, and then babysit your contract to closing, as well as babysit you at the closing table.  You'll pay $450 to $800 for the privilege.

Title Insurance:  the seller will buy you insurance - so you think you're covered, right?  But you have to buy it for your Lender/Bank/Mortgage company.  This will run about $400 additional.

Other fees will add up to around another $400 to $800.  These B.S. fees include things like:

  • $35 for a flood certificate.  This irks me to no end, because the entire City of Chicago is NOT in a flood plain, but buyers are required to purchase a certificate that SAYS the same thing from the U.S. Government.
  • Escrow charges.  These are fees that the Title Company charges to mind the incoming and outflowing money.  It's usually a requirement of your lender ~ and therefore, you're stuck paying a fee to rent the conference room at the title company.  Otherwise you could close in your living room.
  • Wire fees.  Of course, you borrowed the money, but your lender charges YOU $50 to send the money to the Title Company.
  • Overnight fees.  You just signed your big fat loan package.  The Title Company charges you $50 to FedEx it back to the lender.
  • Recording fees.  These are worth it.  A representative from the Title Company goes down to the Recorder's Office and stands in line; pays your recording fees, and records all your documents into the public record.  And they charge you a premium to do so.

Other little surprise items: 

  • Did you buy in a new condominium?  Then you'll pay up 2 or 3 months of assessments to get the reserve fund started.  Bye Bye $300.
  • Ditto?  Then you'll pay the developer back for the building insurance policy that he pre-paid for, but you get the benefit of after you own your new condo.  Another $200.

On the same $300,000 condominium from our example above, it would be wise to budget an extra 2% - $6,000 - in closing costs on top of your down payment for the property. 

Now, let's see if the math holds up.

  • $450 Loan app.
  • $300 Inspection.
  • $2,250 Chicago Transfer Tax.
  • $500 Attorney fee.
  • $1,450 PMI
  • $400 Lenders policy
  • $35 Flood
  • $200 Escrow charges
  • $50 Wire
  • $50 Overnight
  • $100 Recording
  • Grand Total:  $5,785  (Not Bad!)

All of these charges are added up on your "Settlement Statement" which also goes by the name "HUD1" or "RESPA."  It's a standardized spreadsheet or balance sheet that is prepared for every closing.

Ask your lawyer to send you a copy of your statement a day or 2 in advance - maybe he'll have all the figures.  But it's also likely he won't, and you won't see your settlement statement until closing.  On the other hand, you should be given the "Final Figure" which is the size of the check you should bring to closing - and it contains all the numbers on the "RESPA" but not all typed up and formal.  You should find out your "Final Figure" a day before closing so you have time to go to the bank.

The final piece of advice - you will need to bring a cashier's check to the closing.  No personal checks.  And remember to bring your Drivers' License.  You need proof of identity to close.

Monday, May 12, 2008

Upcoming Festivals in Chicago for May

Gospel_singer May 16 & 17 - Chicago Mayfest

3100 North Ashland Avenue. $5 to enter

May 24 - Memorial Day Parade

250 North State Street. Free

May 28 to 31 - Chicago Turkish Festival

50 West Washington - Daley Plaza. Free

May 30 to June 1 - 24th Annual Gospel Music Festival

Millennium Park, 201 E. Randolph Street. Free

May 31 to June 1 - Belmont/Sheffield Music Festival

3200 North Sheffield - $5 to enter

Thursday, May 8, 2008

Some Suburbs and Neighborhoods of Chicago now "Declining Markets."

For the first time, this week I heard the term "declining market" applied to a Suburb of Chicago - Western Springs. I heard from a loan officer friend of mine that this new designation pretty much torpedoed a deal he was working on.

So, what's a declining market?

When a property is located in an area identified as declining, Fannie Mae will now require the lender to offer financing at LTV and CLTV ratios that are five percentage points below the maximum ratios allowed for the selected mortgage product. For example, when the highest LTV allowed for a particular mortgage product is 100 percent, maximum financing would be 95 percent if the subject property is located in an area identified as declining.

Yikes!

Here's a map from Countrywide Mortgage of their "declining markets."



It's important to know that the map is dynamic - constantly changing. It could even happen that a town or a neighborhood may not be labeled "declining" when you apply for your loan, but get the designation at some time during the mortgage processing.

In my friend's example above, the first mortgage was approved. But the second mortgage didn't get processed in time to beat the dreaded designation, and was denied.

This is a stern reminder to borrowers out there to be ever more vigilant about monitoring every step of their mortgage process. And a vivid reminder that it's not just the borrower that has to qualify for the mortgage. So does the property; and today - so does your new neighborhood.

Monday, May 5, 2008

Reader question on Security Deposit Interest in Chicago

A reader wrote:

Thanks for your article "Series: Getting started with Chicago Investment Property. Part 3." Very good info there. I am new to the rental market; I have a condo unit in Chicago to rent; I wonder where should I put the security deposit? The city requires 1.26% for the year of 2008. I checked into several banks but the trust account only pays O.5% interest. Which bank has a better offer? Or is there a better way to deal with this money? I only have one unit. Can I be exempt from the rule that I must hold this money separately? I looked into a CD that requires a certain amount, that means I must put some of my money into it in order to meet the requirement, however that must be under my name. The rate is much better. Is it legal to do it? Please advise!

Hi Jean,

The short answer is that, if you are subject to it, there is no way to get out of complying with the Chicago Landlord Tenant Ordinance. And if you own a condo, it sounds like you're not living in an owner occupied two, three or four unit.

However, the Ordinance only states that you must keep the security deposit funds in an interest bearing, Federally insured institution that is located in Illinois. It does NOT require you to keep it in a "trust account." To comply with the law, you merely need to open a savings account. You can even open a CD. Savings accounts seem to be paying around 3% and CD's appear to be paying around 5% . Open a savings account and have your bank (Federally insured) name the account "Your Name – Security Deposits."

You should then only use this account for Security deposits – NOT FOR ANY OTHER PURPOSE. Any personal money that you have or rent money, etc, should never go into or out of this account.

All banks vary what interest they pay on basic savings accounts so, check with the bank you like to work with. If you have more than one account with a bank they may give a more favorable rate. Keep in mind however that on a $1,500.00 security deposit, the difference from what you earn and what you pay is not that huge. In your example you said you could get 0.5%. If the required interest you pay is 1.28% then 0.78% is what you have to come up with out of your own pocket. On that $1,500.00 security deposit, that amounts to a $19.20 interest payment of which you made $7.50 in interest. That means your total annual out of pocket is $11.20. That's not too bad.

Check with your accountant as well, because you should be able to write off any excess interest that you pay to the tenants.

Guide to articles

Part 1: Identifying potential property
Part 2: Marketing
Part 3: Taking an application and lease
Part 4: Move in day