Thursday, January 31, 2008

New development in the works across the street from Wrigley Field

I swear I did not intend to post two articles in a row related to the Chicago Cubs. I have been working on this post about a proposed development across the street from Wrigley Field in Lakeview for a couple days now. Then I learned about Carlos Zambrano's new home sale on the news just this afternoon.

In any event, your guides were very pleased to see the plans for a mixed use development along Addison and Clark Streets just south of the ballpark. A Chicago developer has just announced a proposal for two 9-story buildings that could contain a hotel, 150 apartments, 100,000 square feet of commercial space for a grocery store and other retail, and 500 parking spaces.

The area is highlighted on the map above. It's not quite a perfect rectangle as shown, but slightly irregular leaving the one story commercial building on the corner of Clark and Addison in place.

Otherwise, the development site is a motley collection of parking lots, a 7-Eleven, an old building housing a Starbucks and apartments, a muffler shop and a couple of taverns. The taverns on Clark Street represent the cream of these real estate holdings.

Neighborhood reaction has been mixed, but generally saturated with longtime residents complaining about the increased density adding to the already congested nature of the neighborhood. I really have to say that a nice project like this would truly enhance the neighborhood.

It was only 25 years ago when no one in their right mind would want to live this close to Wrigley Field, and the only neighbors that had the chops to withstand the tough neighborhood were the all-night convenience store, the auto repair store and a McDonald's 24-hour drive through. All the other spaces were parking lots devoted to extracting crisp $20 bills from tourists who drove to the ballpark and wanted to park really close so as not to have to walk terribly far to the game. As Lakeview developed into a desirable and affordable neighborhood rivaling Lincoln Park to the south, the immediate area around Wrigley was shunned. Too many crowds. Too many rowdy drunks. Too much traffic and noise.

Today, the surrounding area features $600,000 condominiums, $1-million 3-flats and well over $1-million houses. The area is ready for something classier than the muffler shop, the ticket stub and the dumpy flats housing run-down apartments.

It's perfectly clear that the demographics of the neighborhood are demanding better shopping alternatives than the 7-Eleven as evidenced by the popularity of the brand new Whole Foods that just opened on Halsted at Waveland (two blocks away.) Yuppies are not going to raise their families on Slurpees and Jerky. Real food is actually in demand.

As to the complaints about additional congestion, I can only imagine that no intelligent resident of these new apartment homes would knowingly take their cars out the garage on game day. It's perfectly logical to assume that these residents who have knowingly chosen to live near such a busy attraction could only have one of two choices: (1) leave the neighborhood well before game time or (2) abandon their cars inside the garage in favor of public transport. The additional 500 parking spaces may actually serve to HELP neighborhood congestion rather than hurt it as fewer cars will be clogging up the streets trolling for smaller parking lots throughout the neighborhood.

The developer met quietly and privately with a small group of residents in early December to discuss the proposal and hear some feedback. Other meetings have been held over the past 12 months and have already resulted in scaling down the size of the project from 10 or 12 stories. Stay tuned for announcements on upcoming community meetings. These should prove to be very interesting.

Starstruck in Chicago - Real Estate

Right around the corner from your humble scribes a big-time Chicago celebrity has purchased a new home for his summers in the big city.

Carlos Zambrano, pitcher for the Chicago Cubs, has just closed on this three-year-old house, which has six bedrooms, four full and three partial baths, and two fireplaces. Set in Chicago’s West Lakeview neighborhood on a block that was, until six years ago, industrial property, the 6,700-square-foot house stands on an extra-wide 37 & 1/2 foot lot. The sale price was $2.8-million.

Of course, this is Carlos' modest Summer Home here in Chicago. He is rumored to have other homes in his native Venezuela and other locales. We're glad to have you in the neighborhood, Carlos; Welcome!

Wednesday, January 30, 2008

Interesting statistics

I realized that a posting containing facts and figures does not appear on the front page of the blog at the moment and therefore felt compelled to compile some interesting statistics.

When I called to schedule a Video Home Tour on Monday for a new listing (see 1753 West George in the sidebar) the photographer informed me that the company had received 400 requests for photography shoots for new listings on Monday. Yikes!

In Lakeview, there are 68 new listings (condos, houses and 2-4 flats.)

In Lincoln Park, there are 30 new listings.

In the Near North (Gold Coast, River North, Streeterville, Old Town) there are 59 new listings.

Uptown - 25.

West Town (River West, Wicker Park, Ukrainian Village, Bucktown) - 52.

Refer back to this previous post about Condo Sales in 2007. The figures for Lakeview's new listings seem to confirm Lakeview's strong showing in 2007.

Bad real estate pictures - a continuing series

A co-worker of mine brought my attention to this snazzy photograph of a bedroom in a house for sale in the suburbs. What does this photo say to you?

"I just got a new camera and haven't taken the plastic off yet?"

"Barbara Walters just stepped off camera?"

Tuesday, January 29, 2008

Another possibility in the quest for retirement property in Mexico

As the temperatures plummet from above 50 degrees today towards zero tonight, our minds are wondering off towards warmer climates - even if only wishfully. After spending time in Costa Rica last year, we decided that we may be leaning more towards Mexico as an escape from Chicago.

A goal would be to have a house located on the oceanfront with beach access. It seems that condominiums are the only option affordable at the present time. Acknowledging this reality, we've taken to considering houses that are located off the beach.

This house is located outside of Cancun, Mexico, a few miles from the beach and a couple miles from downtown Cancun. The home is new construction and is offered by the developer, Sundial Property Development Group.

The house features 4 bedrooms, 4 baths, a roof top patio with wet bar, front garden and a larger back yard with swimming pool. It's an open floor plan with floor to ceiling windows that open on to the backyard, becoming one big interior/exterior space, along with the deck & pool. It has granite counter tops in all baths, kitchen & the rooftop wet bar. There's even a 4 car garage.

The house is available for $245,000 (U.S. dollars) which seems perfectly reasonable for a brand new and spacious home such as this one. Contact info here. Unless we buy it first.

Monday, January 28, 2008

Will real estate agents host open house on Super-bowl Sunday?

I was curious as to whether my compatriots would host open house on Sunday even though it's the day of "The Big Game." The football game doesn't start until 5:15 here in Chicago. With that in mind, I asked all of my co-workers whether they are hosting an open house on Super-bowl Sunday? And if so, do they think the festivities of the day will impact the number of visitors to their open houses.

And the results:

Yes - I will host an open house on Sunday = 7

No - No open house on Sunday = 14

Comments from my co-workers...

I will be holding an open house from 11:30-2:30. I figured since the game is in the evening, people could get some house time in earlier. I might even do one from 11-2.

My clients have requested that I NOT do open houses, as they have big plans and want the day to prepare and relax and enjoy!

Traffic could not be any lower at my listing than it already is, but if I had been getting people out to see it, I would expect that to dry up on Super Bowl Sunday. However, I do seem to recall that last year many agents (myself included) were very busy with showings on the buy and list side the day before the Super Bowl, despite some wickedly cold temperatures, as buyers tried to get their business done so they could spend all day Sunday with their beloved Bears. This year IS a potentially historic Super Bowl, after all, so if someone's inclined to hold an Open House this weekend I might consider Saturday instead of Sunday.

Personally I don’t hold open houses in January and until the first week after the super bowl.

I would not host an open on Superbowl Sunday. The game may be later in the day but the parties start early.

I would not do an open. Pregame impacts traffic.

No open houses for our group. I don't think people will be out at all.

I wouldn't because I don't think people are out home shopping. I think they are hosting or going to a party and not really thinking about real estate. If my clients insist, I would just do 12 - 2pm only.

Ab-so-lutely! I did one last year & was busy. Lots of non-football men and women.

I'm not. I held one yesterday when there were no games.

No, I will not host any open houses on Sunday. Over the last few years, there has been little or no traffic.

I would, there are a lot of people like me out there, who have zero interest in football. Last year I sat line on Super bowl Sunday when the Bears played, from 12-3pm and had 18 people register with @home agent.

In my experience, Superbowl Sunday is a lot like a holiday weekend --- there's fewer open houses and fewer buyers, but those buyers that are out there --- more serious.

No. I have found it historically to be a super quiet day.

No. Unless it’s a development.

I’ve done them over the years on Super Sunday. Do it early if at all. But as much as I like to make an excuse not to do an open house, I have gotten traffic.

Personally, I wouldn’t because I think most people like to enjoy the whole Superbowl Sunday. It’s nice to be able to watch the commentators and athletes talking about the event, expectations and whatnot. The anticipation before the game is fun! Plus, usually people go to Superbowl parties a couple of hours prior to game time. Having said that, I suppose for those who are in immediate need of a home they’d probably come on this big day regardless. It probably won’t necessarily impact OH traffic but it’s hard to tell. I would suggest an early one if doing it. Say, 11-1pm.

Yes, to answer your question I am having my development open and I am going to sell the remaining two units. And darrowwest is still a cool name and a rockin’ team. And you’re good people as they sometimes say in the mid-west.

Staging a vacant condo. Also known as "Very Fortunate Realtor"

I swear that I did not plan on the previous post and this post to appear next to each other. That they did sort of makes me come across as a bit of a know-it-all or a show-off. Notwithstanding, I am delighted to have convinced one of my developers that staging would greatly aid in the marketing of the units. These condominiums are sprawling floor plans that have 1,700 square feet. They have a lot of rooms in a gracious old-world layout with the living room in the front, a formal dining room towards the back and the kitchen at the very rear of the home. In addition, what was an exterior porch has been incorporated into the homes creating a sun-room off the master bedroom.

With so many rooms, prospective buyers who visited inevitably wandered from room to room asking "Now what do we do with this room?" A nice problem to have. But if a buyer doesn't know what to do with a room, he or she doesn't place any value in having it. Sales were lagging as prospects didn't know what to do with so many rooms even though it was clear that the home was enormous.

The sunroom is one of the hardest to explain to buyers. Without some kind of purpose, this feels like wasted space.

Prospects frequently could not visualize how to place furniture in this bedroom.

This seems like too much space just to devote to a dining room. Buyers often worried that this would be a big empty hole in the middle of their new home.

Now see what these same rooms look like after a professional stager has come through and filled each room with appropriate furniture.

This room - the sun-room - benefits from the greatest improvement in perceived value after being staged. Now buyers can envision themselves enjoying a quiet relaxing moment on a sunny morning, perhaps catching up on some reading.

Here the layout of the master bedroom is completely natural. And inviting.

Even with a four-place dining room set, the room feels perfectly utilized.

Here, the kitchen simply looks finished with the addition of the appliances and barely a few simple accessories. A whole world of difference.

It goes without saying that these condos are available for sale and ready for occupancy. Check out the development website at Or click on the property photo in the slideshow in the sidebar.

Bad real estate pictures - a continuing series

It almost seems cliche to do these kids of posts, but I cannot resist. There are many blogs that chronicle the history of bad real estate photography, so I thought this would be superfluous. However after coming across a few local examples, and realizing that many of the larger repositories of bad real estate photos elsewhere on the internets seem to have overlooked our local talent. Therefore, your guides are pleased to present the first in an ongoing series - Bad Real Estate Pictures.

What does this picture say to you?

"I am too busy to visit this property during the day?"

"Photo courtesy of Transylvania Realty?"

Tuesday, January 22, 2008

Interest rates have fallen to new lows. Forecast to fall some more.

At our office meeting today, the mortgage experts from Guaranteed Rate gave us a quick rundown on what's happening in the market with interest rates. If you haven't been paying attention, rates on conventional 30 year mortgages have quietly settled down to 5.625%.

This morning, the The Fed lowered its federal funds rate, which impacts how much consumers pay on credit card debt, home equity lines of credit and auto loans, to 3.5% from 4.25%. The Fed also lowered its discount rate, which is what it costs banks to borrow directly from the central bank, by three-quarters of a point, to 4%. This was the biggest rate cut by the Fed since October 1984.

The guys from Guaranteed Rate predicted that we could see home mortgage rates at 5.25% or 5.125% within a couple of weeks. Some major banks have also aggressively lowered their jumbo adjustable mortgages to match the new low rates on the conforming loans.

It may be time to start up the refinancing machine again.

Monday, January 21, 2008

Buying an investment property, should you form an LLC?

A reader writes and asks:

My wife, My brother, and I are considering purchasing a multi-unit property to rehab and rent. Should we form an LLC? On the same topic, we will all be cosigning on the loan. Given current market conditions, is there any hope that we can go bigger and only put 10-15% down?

It sounds like a good idea, doesn't it? The Limited Liability Company will indeed protect you from liability - which is always a good thing when owning property that tenants occupy. Liability from lawsuits brought against you would be limited to the value of just that one property - not your total net worth. A definite plus if you own more than a handful of properties. But the LLC presents a few obstacles, too, which can be difficult to overcome.

If you take ownership of your property in an LLC, financing will almost certainly need to be commercial financing. This may mean stringent credit requirements, higher interest rates and at least a 25% downpayment. On the other hand, if you purchase a 2 to 4 unit building in Chicago, and one of you is willing to live in one of the apartments (at least temporarily) you may qualify for conventional financing with lower down payment requirements and interest rates that are customary for home buyers.

In the situation described above, with family members purchasing a smaller investment property together, your interests can probably be protected with much simpler solutions.

Probably the smartest way to go would be to purchase the property as either joint tenants or as tenants in common (depending on how you want the property to transfer if one of you were to pass away) without all the complicated hassles of forming a corporation. Then, take out an insurance policy on the property to cover its damage and destruction for replacement value, and a liability policy for $1-million. Do this for each building you purchase.

Then, add an umbrella policy that covers additional liability against accidents or negligence by you, your employees and your contractors in the amount of another $1-million or more - depending on how much of your net worth you need to protect. The umbrella policy that covers these situations also covers your liability against unforeseen situations that may not even have anything to do with your real estate investments. The best part is that these umbrella policies are usually extremely affordable.

The umbrella policy that covers both Steve and myself for an additional $1-million in liability only costs $200 a year - an outstanding bargain.

Give me a call if you would like to speak with our Allstate Insurance agent here in Chicago about checking out these options for yourself.

The Best of the Bad (it's sooo good!)

This great video video of some of the worst in Real Estate Videos on the web comes from IntoTheBox.TV - The home for daily videos about real estate-obsessed NYC. Not all videos are specific to NYC real estate - hence this post...

Saturday, January 19, 2008

Baby it's cold outside...

No, that's not steam. It's so cold that water evaporating off the surface of the lake and the river instantly turns to ice crystals that hover over the surface of the water.

Montrose Harbor. Early boating season starts April 15! It's right around the corner...

Friday, January 18, 2008

A guide to staying warm

With temps hovering around zero all this weekend - with wind chills between -10 to -20 - I tried to come up with some suggestions on activities for this weekend that you could undertake while still staying warm. During my research I came up with this great article from Public Radio.

I don't need to play beach volleyball, I just want to get out of the house. Take a walk. And not, you know, die of hypothermia. What would it take to take a walk anywhere in America, any day of the year? The easiest thing to do, I figured, was go downtown to the flagship store for REI, the outdoor apparel and equipment chain. Gabe Maricich is a salesman there. Dress in layers, he said. But how many and what kind?

"Kind of a three layer kind of trifecta is kind of how I describe it," he said. "So you've got something against your skin that pulls the moisture off, keep your body dry, insulating layer in between, and then a shell of some kind, something water resistant or water proof or wind resistant or wind proof."

I asked Maricich to select the warmest stuff they had. What would be the price of maximum warmth and the closest thing to a guarantee of a pleasant stroll anywhere in the nation, even Alaska?

He started totaling it up. "Looks like we got basically everything going on here. We got the shell on the outside for our pants. We've got our insulating pants -- it's a fleece pant here. And then we've got our long underwear we wear right against our skin. Only one layer of socks but with the insulating boot we've got right over here. It's going to be just great."

The socks alone were $13. We'll get back to Maricich. But that's just what to wear. For tips on what to do in hardcore cold, I stopped by Matt Schonwald's house. He's the program director and senior guide for Mountain Madness, a company that runs expeditions to places far-flung, daunting and really cold. Schonwald knows about cold. Couple years ago, he was snowed in for five days while leading a group up Vinson Massif, the highest point in Antarctica.

"To put in perspective, in terms of the temperature range we encountered, the teams at Camp 1 said that even with the winds, they were thinking it was -40. And we were 2,500 feet higher," he said. "And one of the things that happened besides our pee freezing is that the rubber seals in our stove shrank. So fuel would shoot out, so we can only guess it was -50 or maybe colder."

Wait a second. Your pee freezes?

"It actually -- as it exits it's still liquid, but when it hits the ground it's a solid. Yeah, you took your time and made sure your back was to the wind. "

Okay, now it doesn't feel so cold where you are, right? So that's one way to stay warm -- compare your neighborhood to Antarctica. Schonwald says another way is to conserve the heat you generate and maintain the fuel to make more: "And also right at the base of your head and neck you lose a lot of heat. And so those are places that you want to protect from heat loss. One of the ways I manage that is I'll often make sure I get everything tucked in really well and pull my pants up high. That way my back is protected by my pants and my jacket, and I don't expose my lower back to the elements. Cause that's one way, once you get a chill up and down your spine, it takes a lot more energy to reheat yourself than to stay warm. And just any flesh that's exposed. Like I had my face mask tucked under my goggles and there was one sliver an inch long and a millimeter wide. A couple weeks later when I finally looked in the mirror, a little piece of skin peeled off like a sunburn."

And remember the chicken soup mom gave you to stay warm? She was on to something.

"Some people bring tea or coffee," said Schonwald. "I also do that, but I tend to bring broth because when you work, you expel salt, and a lot of times just the electrolyte balance helps, like a warm cup of miso or chicken broth, just a little cup of that will do a lot for you."

In short, use layers, pull your pants up, drink something warm like soup and be grateful you're not in Antarctica. I think I have some broth at home, and I can remember to keep moving and cover my lower back. Back at REI, Gabe Maricich was almost done totaling up our cart. Three layers of coats and pants, mittens that resembled oven mitts, boots, socks, a hat that looked perfect for robbing arctic banks. Grand total: $797. For that price, Gabe said, you could be warm and dry anywhere. Pricy. But at least you can go for a nice walk.

Handy Transfer Tax Calculator

The Chicago City Council is considering an ordinance that will increase the Chicago Real Estate Transfer Tax by $3.00 per $1,000 of your purchase price. This tax is on top of the current $7.50 for the buyer and the current state and county transfer tax of $1.50 imposed on the seller. REALTORS(R) are opposed to this measure and we ask you to call your alderman today to tell them to vote no to a CTA Transfer Tax Increase.

Under the proposed Real Estate Transfer Tax increase to fund the CTA Pension Fund, Transfer Taxes will increase by over 40%. To see what this would mean for you, enter your home's value in our Transfer Tax Calculator, and see just how important it is to fight this increase.

Link to the Chicago Association of Realtors website and calculator.

Find your Chicago Alderman.

Tuesday, January 15, 2008

Interesting stats from my friends at Chicago Condos Online

Despite 7% Fewer Unit Sales in 2007, City’s Condos Appreciate 7%

As sales of houses in Chicago slide 27%, condo sales, with their fourth-highest year, provide a silver lining.

CHICAGO, Jan. 11, 2008--After a downturn in real estate in 2007, who is better off: owners of houses or of condos? In Chicago, the clear winners are condo owners. Condos appreciated 7%; single-family homes, 0%.

According to figures calculated from the Multiple Listing Service by, “The Ultimate Condominium Resource™,” the number of condo units sold in Chicago in 2007 was 18,120, down 7% from 2006. But the median sales price of those units was $297,000, 7% above the 2006 median. And the combined sales value of those units was $6.3 billion, up 1%.

“Compared to double-digit downturns in home sales in Chicago, and of houses and condos in many other U.S. markets, sales of Chicago condos represent a silver lining,” said Jim Kinney, president of Rubloff. “Our city’s condo market, comprising 64% of all residential sales, is relatively strong,” Kinney added. “The key source of that strength is job growth in our diverse local economy. One reason condo sales fell one-fourth as much as home sales is that contracts for many condos that closed in 2007 were signed two or three years ago, when the market was better, which is not true of homes.

“With more listings than a year ago and hundreds of unsold units in new developments,” Kinney continued, “this is a great time to buy a condo.” For 2008, Kinney predicts a 1% increase in units sold and an appreciation rate of 5%.

The record year for condo sales was 2005, with 21,601 units, followed by 2006, with 19,406. The 2007 sales were just below the 18,544 in 2004, making 2007 the fourth-highest year--16% (3,481 units) below the 2005 peak.

The 36% of the city’s residential market made up of single-family homes (and town homes and duplexes) slid 27% in units sold, 22% in combined value. Their median sales price remained flat, at $280,000, meaning zero appreciation.

Of the city’s 77 census areas, the top three in condo unit sales were Near North (2,805), Lakeview (2,127) and West Town (1,355). Combined, those three represent 35% of all sales.

Statistics on the city’s condo market are updated monthly in Market Overview on

Monday, January 14, 2008

Is ten-percent off a reasonable starting-out offer on a property?


Wouldn't it be great if the answer was that easy?

In the past week, there have been a number of questions on the discussion boards along these lines. Another one was worded this way: "Is an offer of $420,000 on a property listed for $460,000 reasonable?"

Of course, it's difficult to say what a reasonable offer on a piece of property would be if I didn't know the property myself. This question is one of the more difficult ones to pin down in and internet-discussion-board type of environment.

Probably the most important place to start in any negotiations on a piece of property will be with a professionally prepared CMA (Comparative Market Analysis.) Properly armed with your CMA you will know whether or not the property you are interested in is priced appropriately for the market, priced too high or even priced too low.

In my neighborhood, there is one house listed for $2.6-million that I think is only worth $1.6-million. How outrageous would it be to bid "One... Million... Dollars..." (Mwaaa Haaa Haaa) lower than the asking price on a house? I would.

On the other hand, there are a few developers out there that are completely in tune with the realitites of the current market conditions and have their properties priced aggressively for the neighborhood. These developers are writing contracts rather than complaining about how few buyers there are.

It's like they're negotiating up front. "Hey - we're already 10% off! Come check out our inventory!" In this situation, you might not be able to negotiate as much. Especially if the developer is down to his last unit. You wouldn't want to miss out on a great price on a property because you couldn't get just a little more off the price.

If a property is priced just right, usually there is a little bit of negotiating room in order to preserve the tradition of making an offer and haggling a bit. Probably not 10%. Maybe not even 5%. But at least a few hundred dollars to several thousand dollars can be negotiated if presented well.

Prepare a good reason. Great negotiators will have a logical reason why they are asking for a few more dollars. Even if you don't. Do your research. Perhaps the property you are bidding on is the exact same price as the same model that sold just a few weeks ago. But perhaps that unit had newer carpeting. Or some desirable built-in cabinetry. Or a fireplace. Pointing out a feature that is important to you that is missing is a great negotiating strategy.

Another good strategy is to ask for credits. Perhaps you've saved up just enough money to cover the down-payment on your new property, but the closing costs (perhaps including Chicago's notorious buyer transfer tax) are higher than you expected. Ask the seller to cover some of these expenses. Having a logical reason to ask, and presenting your case as politely as possible goes a long way. Way better than hammering away at that last thousand dollars. Just Because.

Sunday, January 13, 2008

The fine print on the CTA Bailout

While everyone is cheering the (nearly) done deal to bail out the Chicago Transit Authority, one small provision in the new funding bill may cause additional hardship for sellers of property in the city of Chicago.

Everyone knows that the bill increases the sales tax by 0.25% in Chicago and by 0.5% in the collar counties. These sales tax increases leave a $100-million hole in the budget for the CTA. Illinois lawmakers have left it up to the Chicago City Council to finish the task by authorizing the City Council to add another $3 to the real estate transfer tax.

Currently, the City of Chicago imposes a $7.50 tax of each $1,000 of sales price on the buyer of real estate in Chicago - or $750 per $100,000. The Illinois legislature has authorized Chicago to raise this tax to $10.50 per $1,000 - or $1,050 per $100,000.

The funny part - if any part of this could be considered funny - is that the City Council knows that it would surely be political suicide to try to enact this tax on top of the $276-million in taxes and fees the City just passed to balance the 2008 budget. So the Mayor's office tried to convince Illinois lawmakers to give the authority to raise the Real Estate Transfer Tax directly to the CTA Board of Managers. But alas, the CTA Board has no taxing authority of its own. The prospect of giving it that authority created so much disagreement among Illinois Legislators that it threatened to kill the transit funding deal altogether. The proposal was withdrawn as quietly as it was proposed.

So, back to the tax at hand. On last year's average single family home sale of $254,000, the tax would change from $1,905 to $2,667, a $762 increase. On last year's average condo sale of $334,000, the tax would change from $2,505 to $3,707, a $1,002 increase.

This would give Chicago the distinction of having one of the largest transfer taxes in the U.S.

I fully support keeping the CTA funded, but I just cannot fathom what bailing the CTA out of its financial mess has to do with buying and selling real estate.

Prospective sellers in Chicago, learn soon who your local Alderman is. The law that authorizes the City Council to pass this tax lasts for six months. You can expect legislation to pop up quietly and without much notice on several occasions in the coming months. You may only have a few hours to voice your concern before the City Council votes on the measure.

At the City of Chicago's website - follow the links for Local Government.
At the Chicago Association of Realtor's website - choose Advocacy, then Issues & Legislation to keep your eye on any City Council action on the transfer tax.

Friday, January 11, 2008

Tour: Chicago's Graceland Cemetery

Nestled within the north end of Chicago's Lakeview neighborhood and running centrally through the area up to Uptown you'll find the often overlooked but always in-the-way Graceland Cemetery.

Your guide picked up a book filled with glossy photos of Chicago from the discount rack at Borders during shopping season in order to have more reference books to lend to our frequent Chicago visitors. This particular volume contained a collection of photographs taken of gravesites of famous Chicago founders and residents. This was quite a unique addition to our list of recommended tourist destinations. My interest piqued, doing additional research on Graceland Cemetery I discovered that Graceland his the final resting place for hundreds of notable Chicago historical figures.

One of the most famous and most photographed monuments doesn't even have any names or description on the front of it. If you look on the back of the monument, you'll find that the grave belongs to Dexter Graves. Graves was one of the first settlers who, according to the inscription on the back of the polished black granite slab, “brought the first colony to Chicago, consisting of 13 families, arriving here July 15, 1831 from Ashtabula, Ohio, on the schooner Telegraph.”

Probably the most famous person or family laid to rest in Graceland is Marshall Field and the site of his family's plot. This giant of commerce is commemorated in a memorial created in by the two men who later would be responsible for the Lincoln Memorial – architect Henry Bacon & sculptor Daniel Chester French. Field, who went from store clerk to Chicago’s richest man, developed his famous company into the world’s largest wholesale and retail dry goods enterprise. French’s statue, the sad-faced woman titled “Memory,” holds oak leaves, a symbol of calm courage. The caduceus on the base, the staff of Mercury, is used today mostly to represent medicine. But we are told that here, it stands for commerce. Mercury was the classical god of commerce – as well as of skill, eloquence, cleverness, travel and thievery.

My favorite residents of Graceland are Potter Palmer and Bertha Palmer who are laid to rest in a grand Greek temple. The twin sarcophagi gives a clue to the lavish lifestyle of its occupants. Potter Palmer pioneered customer satisfaction in his dry goods store, with money-back guarantees, merchandise on approval, and attractive store displays. He sold his successful business to Marshall Field and Levi Leiter, and became successful in real estate. (You’ve heard of the Palmer House, no doubt.) McKim, Meade & White of New York designed the temple, as well as Bertha’s parents' French Gothic tomb across the road.

I compiled a list containing 24 pages of Chicago's deceased who's-who. Names tell the stories tied to city landmarks, parks and many streets. Names such as Charles Wacker, John Peter Altgeld, Fred Busse, Timothy Webster, Ida Noyes, Carter Henry Harrison and Henry Brown Clark.

City founding fathers include the above described Louis Sullivan and Marshall Field, John Root, Daniel Burnham, Howard Van Doren Shaw, as well as other skyline shapers including William Le Baron Jenney, Ludwig Mies van der Rohe and Fazlur Khan.

This is a fantastic history lesson well worth viewing, and it will definitely make the list of "must-see" sightseeing for my out-of-towners from now on.

Continue reading at these great websites:
The Encyclopedia of Chicago
Weird & Haunted Chicago

Update on 1/18: I just found out that walking tours are given on regular dates throughout the year. Check this website for dates and times.

Wednesday, January 9, 2008

Three predictions for Chicago real estate in 2008

It appears that at this time of the year, it's a blogger's duty to write an article filled with predictions for the upcoming year on their topic of expertise. Making predictions is fraught with peril for the prediction writer as we don't really have a crystal ball in which to divine the future or a time machine with which to travel to the end of the year and confirm our predictions. Let's hope I don't wind up on the list for 2008's worst predictions like these for 2007.

Chicago real estate prices have already hit bottom.

The fundamentals in Chicago were never as messed up as they were anywhere else. For a two main reasons, real estate in Chicago just didn't have as far to fall as real estate prices in other parts of the country. First - our real estate did not run up as far and as fast as real estate in other parts of the country. Namely - California, Florida and the northeastern states.

Some quick examples: In the Los Angeles metro area, between 2004 and 2006, the median sales prices ran up 31% over the three year period. In the Miami - Ft. Lauderdale metro area, prices ran up just under 30% over the three years. And in Chicago, our prices rose almost 14%. (Figures from N.A.R. - email me for a copy of the report.)

The Midwest economy - and Illinois' in particular - has remained healthy since 1999. Unemployment in Illinois has fallen from a high of 6.9% in August of 2003 to a low of 4.0% in November of 2006. It has crept up slightly to 5.2% in November, 2007, but the figure is still comparatively low historically. (U.S. Department of Labor Statistics.) Illinois homeowners have been able to keep their jobs.

There will be more homes sold in 2008 than in 2007.

The rate of home sales slowed tremendously in the second half of 2007 throughout Chicago. Actual figures show a high of 4,138 properties closed in June, 2006. The high in 2007 was June with 3,440 closed sales. Figures dropped crazily throughout the remainder of the year to 1,820 closed properties for December, 2007.

I predict that the number of closed sales for 2008 will be greater than last year and I attribute the increase to these factors:

There is pent up demand for homes. Many people put off lifestyle change moves last year in order to wait out the slumping market. They still want to sell their city homes and move to the Suburbs. Or vice-versa. These folks will sell their current homes and move to new homes in large numbers this year. Chicago is not as dependent on the first-time home buyer segment of the market as other parts of Chicagoland.

(See Sunday's Tribune article for an example of a sub-market that is totally dependent on first-time home buyers and the challenges facing sellers there.)

The banks that foreclosed on properties in 2007 still need to sell them and the bureaucracy to do it is finally in motion. Getting a committee of bankers to decide what to do, interview potential real estate companies, decide who to hire, process the paperwork and make the actual process happen takes months. All those houses should be coming on the market in the next four to eight weeks. They're priced aggressively and there are buyers out there looking for a great deal.

Interest rates held steady, then dropped this year. Most economists predicted that interest rates would be much higher today. Rather, today's rate on a conforming loan is 5.625%. That's a really good interest rate and brings a lot of buyers back into the market.

There will not be as many foreclosures as everyone thought just a month or two ago.

First, with interest rates hovering at near-record lows, the adjustable-rate mortgages will not adjust as high as economists had predicted (and everyone had feared.)

Second, there will be a bailout of adjustable-rate mortgage holders. The government will either write a law that forces banks to re-write their adjustable loans, or it will bail out the banking industry by propping up cash flow by pumping money directly into failing banks.

Sympathetic media stories about more American families being evicted from their homes is a scene politicians can not afford to have playing all over the news. Forcing mostly faceless corporate-owned banking conglomerates to take it easy on suffering borrowers is an easy way to gain favorable headlines ~ even if only a few actual troubled homeowners are saved.

I had planned to write at least five predictions for 2008, but the day has come to an end. Appointment times are fast approaching; look for a couple more in a near-future post.

Getting back into the groove

Since we returned from vacation, we've had a hard time getting back into the swing of regular writing. Each day in France it seemed the temperature dropped by a degree or two, a trend which continued through Germany. Towards the end of the trip the temps were consistently below zero (Celsius.)

Of course, as soon as we landed in Chicago, the weather turned on us here as well and temps steadily fell towards zero (Fahrenheit.) To the weather's credit, the temperatures did finally recover and we have enjoyed some unseasonable warmth here in Chicago, but with gloomy gray skies and plenty of rain.

Which brings me back to getting into the groove again. I considered posting my motivational pep-talk to myself combined with my next post, but decided that the post could be a stand alone post - and thereby not distract from the more serious topics to come. Plus the photos would look silly.

So, in order to get going and to re-introduce the concept of enjoying Chicago (which can be so challenging in January) here are some photos of friends of ours in town from a few summers ago taking advantage of all the city has to offer. When not huddled indoors.

Sunday, January 6, 2008

Landlords - Chicago Comptroller sets security deposit interest rate

The Chicago Residential Landlord and Tenant Ordinance (RLTO) requires the City Comptroller to set the rate of interest to be paid on security deposits held by landlords. The rate is calculated annually based on a formula tied to actual market rates.

The new rate of 1.26% applies to all residential rental agreements in which the lease term begins from January 1, 2008 through December 31, 2008. The rate of interest on security deposits is determined by the rate in effect on the date the lease term begins. Owner occupied buildings of six units or less are not required to pay interest on security deposits.

The interest rate to be paid on security deposits for apartments outside Chicago has been set by the State of Illinois at 0.35%.