2010 Illinois Housing Market Forecast
The 2010 Illinois Housing Market Forecast released by the Illinois Association of Realtors® (IAR) is generally optimistic, predicting increases in year-over-year condo and single-family home sales and median prices declining at a slower rate than in 2009.
Economists from the University of Illinois Regional Economics Applications Laboratory (REAL) prepared the IAR study, which credits the First-Time Homebuyers’ Tax Credit extension for some of the improved sales projections.
“The momentum gained by the homebuyer tax credit stimulus and plans for more streamlined at-risk loan modifications as well as recent positive reports related to jobs and the economy should carry forward into the 2010 housing market,” said IAR President Michael Onorato.
Statewide, the IAR study predicts that total home sales (single family and condominiums) in most of 2010 will be positive compared to 2009. However, the study notes that sales had declined dramatically in 2009 so there is a lot of ground to make up.
Home and condo sales predictions made in the 2010 Illinois Housing Market Forecast for the Chicagoland Primary Metropolitan Statistical Area (PMSA), which includes Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will counties, are slightly less positive.
“Overall, compared to the sort of forecasts we were producing this time last year the outlook is much better for 2010 and we will begin to see the starts of some sustained pick-ups month after month in the positive range,” said economist Geoff Hewings, director of REAL. “The downward trends that we’ve been watching over the last year and a half are beginning to bottom out.”
Joblessness and foreclosure rates factor into the housing market recovery. Illinois employment has declined annually since November 2000. The consensus among economists is that employment levels will increase over the next 12 to 18 months, but not fully recover until 2016.
“The most critical factor for housing in 2010 is what happens to employment,” said Hewings, predicting that until consumer confidence in the economy is restored, housing transactions will primarily come from households relocating due to jobs and retirements.
Median prices for condos and single-family homes are expected to continue to decline moderately, compared to 2009 in Illinois and the Chicago region. For the Chicagoland PMSA, the 2010 median is expected to be $184,900, a 4.4 percent decrease from 2009.
“Until those foreclosed properties work their way through the system we won’t have a price recovery that will match the sales recovery,” says Hewings. “Most people are seeing the foreclosure peak occurring in 2010. Particularly in Chicago we are seeing the influence of many more foreclosed properties on the market but compared to a lot of other metropolitan areas it’s still nowhere as bad as it might have been if we look at markets in Miami and California for example.”
Illinois Housing Market Forecast data is generated from a survey of Multiple Listing Service sales reported by 37 participating Illinois Realtor® boards and associations.
Chicago Condos
Where can you find the best Chicago condos? Chicago is such a mix of cultures and nationalities with over 77 different neighborhoods that condo buyers have a variety of choices from the more upscale Gold Coast to the excitement of River North. There is no place like the city of Chicago and all it has to offer from the dozens of museums to professional sports for those who want to live in one of the most exciting cities in the world. Chicago condos have become one of the fastest growing segments in the residential real estate market for first time homebuyers or those looking to experience the excitement of downtown living.
There are literally hundreds of condos to choose from at almost any price. There are several major developments currently going on downtown and many developers are rolling out new incentives for pre-construction Chicago condos. Some developers are offering credits as high as $30,000 toward furniture as well as the services of a professional interior designer who sign up before a deadline. Others developers are offering a wide range of incentives from free parking spaces to options on floor plans at no cost and price guarantees.
Some of the best Chicago condos are scattered throughout the city and below are just a few.
• 6 North Michigan Ave
• Century Station
• Ecologic Lofts
• Joffrey Tower
• Market Street West
• Medinah on the Lake
• One Museum Park
• Walton on the Park
There is no better time to start looking for the best Chicago condos than now. Interest rates are low and pricing is the most reasonable in years with developers and sellers offering incentives to make their units stand out. That is why choosing the right Real Estate Agent to represent and market your property is a smart move. Your agent will review with you the different kinds of listing agreements or sales contracts and recommend the structure that would work best for your marketplace and property. But no matter who you choose, always look for these four parts in the agreement.
1. Timing – duration of the agreement should be clearly stated
2. Compensation – fee structure and payout
3. Cancellation – What happens if you wish to cancel the contract
4. Disputes – How will disputes be handled.
The agreement is an important document. Read and understand all sections and if you don’t ask a real estate professional or attorney.
Today’s Real Estate Market
Is now a good time to buy a home in today’s real estate market? That is a question many people are asking themselves with the volatility in all kinds of markets today. What is a good investment? When should I make that investment? When should I get out of the market? When should I get in? Too many questions and not enough good answers and everyone have their own opinion about what has happened and what will happen. One thing for sure the experts don’t really know much more than the well informed customer. The old standby indicators no longer work as seen by the bubbles that have burst over the past couple of years and the swings in the housing and stock markets.
With today’s real estate market let me pose a few questions for you if you are thinking of buying a home or condo in the near future. How long are you going to stay? There is a rule of thumb out there that if you are only staying 2 years or less now may not be a good time to buy. The reasons are simple. It costs money to not only buy but to sell and most times you are not going to recoup your costs in less than 2 years. Everyone knows of sales commissions but that is only a part of the overall costs. Costs are not the only thing to think about as well. Most people rely on appreciation when they buy a home and move on to the next. How much appreciation have you seen in the last couple of years? Are you staying longer than the national average of seven years? If you are then buying is a good investment for you in almost any market. You will have time to accumulate equity and realize all the tax benefits from owning your own home, not to mention the pride of ownership which has been a staple of American life since this country was founded.
The real estate market today is possibly the easiest way for most people to accumulate wealth. Three out of four people today have more equity in their home than they have in retirement plans, stocks, mutual funds and savings. No one can guarantee appreciation but given time it generally does so think about how long you plan to stay and what is important to you and your family. Home ownership is a part of the American dream and sometimes dreams take precedence over everything else.
Real Estate Jobs
Real estate agents are licensed professionals requiring completion of initial educational requirements and to maintain their license they are required throughout their career to take continuing education courses. It is not an easy task to become a licensed realtor and to succeed requires time, energy, creativity and money. Most real estate agents are independent contractors which means they pay their own expenses no matter if the market is booming or bust. As with most parts of the country real estate jobs are currently plentiful but opportunities are there for the taking if you have that entrepreneur spirit that most successful real estate agents possess.
Most people think real estate agents do nothing all day but drive around in their big cars, show a few homes, go to the country club and pick up a big check every few weeks. Nothing is further from the truth. The true job description of a successful real estate agent is longer than most CEO’s of major corporations. Agents are small or big depending on their success, independent business owners who must be counselors, financial experts, expert negotiators, educators, marketing specialists, public relations experts, and more often than not a chauffeur. When it comes to buying or selling real estate there is little a real estate agent does not do for their customer or client.
Real estate jobs in major metropolitan areas offer their own set of challenges and real estate jobs in Chicago are no different. Chicago is approximately 228 square miles covering over 77 different neighborhoods. As an agent how do you choose what areas in which to work? Obviously you would like to work close to home but that is not always possible or the best choice. Agents many times travel long distances and work long hours to service their customers and clients. Real estate agents derive most of their business from friends, family, and the referrals they generate which means they will list or show property over the entire metro area as well as surrounding suburbs and counties.
The real estate business can be a rewarding career but not for the faint of heart. Real estate jobs offer many challenges and opportunities for those who possess that entrepreneurial spirit and are willing to put in the time and effort required to be successful. For those of us who have made real estate a lifelong career there is no other job or career that can compare.
Real Estate Auctions
With the ever changing real estate market a centuries old process of buying and selling has resurfaced and is expected to continue to grow. Real estate auctions have become one of the most attractive ways to convey real estate in this most challenging of markets in decades. But why are auctions becoming so popular and what do they have to offer buyers and sellers.
As published by the NAA (National Auctioneers Association) over $268 billion in sales were auction originated. Auctions have become one of the fastest growing sectors of sales for most any type of property including agricultural, machinery, equipment and residential real estate. Real Estate auctions have increased for the last six consecutive years and it is estimated that approximately $58.6 billion was sold in 2008 with an expected increase for 2009.
Most public opinion about real estate auctions are far from the real truth. Auctions can offer selling conditions that are sometimes better than traditional real estate sales methods. More and more property owners, lawyers and banks are seeing that an auction can be a valuable option and can lead to profitability. There are a lot of advantages, some obvious and some not so obvious that are listed below.
- A quicker sale, most times a closing will take place in thirty to forty five days.
- There are no long drawn out negotiations and the property is selling at the true market value.
- The buyers are prepared to buy and the seller is prepared to sell creating buyer competition generating excitement and motivating buyers.
- Properties sell with no contingencies and there is no guesswork if the deal will close.
- A higher exposure sales approach, advertising campaigns using newspapers, television, radio, billboards and brochures.
- Many times promotions can produce a sale prior to auction day.
- Never have to worry about unscheduled showings, open houses are conducted prior to the auction date.
Real Estate auctions have been around a long time because they are an effective and efficient way to sell property. They create an excitement because they bring together all the potential buyers of a property encouraging direct competition which most times will bring a higher price than traditional real estate methods. While the seller enjoys a higher price the buyer can rest assured he paid no more than market value and in some cases may have purchased the property less than what was expected. No matter if you are the buyer or seller auctions are entertaining and most people come back again and again.
Open auctions
Open auctions
The fact that the U.S. Postal Service is using a open auction to sell its former Chicago headquarters, a 14-story building at 433 W. Van Buren Street, after trying unsuccessfully to sell the property conventionally, just might be an indication of the increasing popularity of the auction method of selling real estate of all kinds, whether it be a condo or a corporate headquarters.
The building known as the Main Post Office originally went on the auction block on August 27, and British developer Bill Davies submitted the $40 million winning bid for the 14-story, 3,000,000 square-foot property. Considering that the suggested opening bid was $300,000, it is easy to see how the price can escalate in the competitive environment of an open auction, when bids are made publicly. This is just one reason real estate auctions are becoming popular ways to sell property in a difficult economic climate.
Built in 1932, the building that spans the Eisenhower Expressway and two city blocks once held the record as the largest postal facility in the world, with operations conducted on nine floors. It has been vacant since 1995, when the USPS moved its headquarters to a few blocks away, to 433 W. Harrison St. Several attempts to redevelop or sell the unique property have been unsuccessful.
Before the August auction, Tom Samra, vice president of facilities for the USPS, expressed confidence that the "innovation and transparency of an open auction" would result in the sale of the building. But because Davies did not complete the transaction within the allotted time, for whatever reason, the historic structure is going up for sale again. Mark Reynolds, the USPS spokesman in Chicago said only that Davies is no longer in the running. "I'm not sure why he didn't complete the deal. Only he could answer that," he said on Oct. 15.
Of course, setbacks like that can and do happen with all types of real estate sales. When that happens, depending on what the owner decides to do, the property could go back on the auction block, the second-highest bidder could be given a chance to buy the property, or the property could be taken off the market or sold in a conventional manner. Just what will happen does not have to be decided before the auction. In the case of the post office, the runner-up bidder, Chicago attorney Nathaniel Hsieh, has been described in published reports as "outraged" that the USPS mailed letters to all the auction participants to solicit new bids, rather than just accepting his back-up contract. He said he intended to file a complaint.
Reynolds said that to his knowledge, no plan had been set up before the open auction to determine what would happen if a deal fell through. He said the USPS "is in communication" with other bidders and a decision has not been made about how to proceed. He did not rule out accepting Hsieh's offer.
"We had expected to have the building sold by now. We want to complete this as soon as possible," said Reynolds.
REO Properties
The challenges facing the real estate market in the last few years have brought to the forefront a term that many have never heard of, REO properties. REO stands for Real Estate Owned and most times is property taken back by a bank or mortgage company when they could not sell it at the foreclosure auction. Most foreclosure auctions do not result in any sort of bid because if there was enough equity in the property the owner would have probably sold the property and paid off the bank or mortgage company. Most foreclosure sales begin with a minimum bid that will include the loan balance, accrued interest, attorney's fees and any other costs associated with the foreclosure process. Since what is owed the bank or mortgage company almost always exceeds what the property is worth, foreclosure auctions normally do not result in a successful sale which means the property reverts back to the bank or mortgage company which then becomes an REO, real estate owned property.
A bank REO property may or may not be a good deal. Many people think that by buying these properties they are getting a great deal and making a killing in the market. That sometimes is true but most often not. These are things to think about before an offer is made. You should always ask, are there any inspection reports, what work has the bank agreed to, how long will it take for the bank to accept the offer and are there any special forms that will be needed to complete the sale. Bank owned properties are almost always sold "as is" meaning there may be repairs needed or other liens on the property which will need to be satisfied before clean title will be conveyed. It may sound like the bank is just dumping these properties but they may be of assistance with handling an eviction, do some repairs, pay off homeowner's association fees and negotiate with the IRS to remove any tax liens.
It is a lot of work but there are advantages to purchasing REO properties over foreclosed properties. Once a property becomes an REO property all the liens are removed and taxes are paid in full. REOs are normally listed with real estate agents and inspections are allowed prior to contract which means the property is typically restored to a salable condition. An additional benefit with REO properties is that the bank or mortgage company will many times offer better financing than they might offer for traditional properties. Lenders and mortgage companies do not want to hold on to these properties very long because of the cost to maintain so if you do your homework and are willing to take a risk it just might be your entry into the homeowner market.
Chicago Lofts
The idea of moving to an urban area and tapping into the excitement and cultural opportunities of a big city is taking hold for many Americans. Chicago lofts are exactly what many potential urban dwellers are looking for when searching for out of the ordinary city living. Are you one of those people who like wide open floor plans in which there are no preset rooms or immovable walls? Do you prefer floor to ceiling windows revealing a panoramic view where high ceilings, worn wooden floors exposed building elements such as, brick, beams, duct work are the norm? Then loft living is what you are looking for! A classic loft style condo is one large space with average living areas of 1000 to 2000 square feet with cavernous spaces beyond the reach of the average resident. It is these aspects which lure many condo buyers to the city-life, industrial chic lifestyle. Most classic loft apartments or condos were converted from old manufacturing or warehouse buildings and more contractors are meeting this growing demand by creating these buildings from the ground up. The new reproductions are referred to as "hybrids". Many loft apartments or condos come in different shapes and attributes, with or without fireplaces or other amenities. Secured video entry, in house fitness centers, and pools are just a few of the luxury items which can come with your loft or condo. Today urban dwellers are finding loft living offer the location and opportunities of city life with more space than the average condo.
Chicago lofts offers many unique joys.
- Open Spaces - the primary benefit is large open spaces that allow you to live how you want, rather than having a defined permanent floor plan of walls, doorways and rooms.
- Define your areas - floor plans can be fluid and ever changing. Temporary partitions, hanging curtains, or even changes in floor covering can define spaces.
- Eclectic style - loft living offers the opportunity for eclectic design and decorating. The mixture of old and new in a loft such as, modern furniture sitting on old hardwood floors offers much of the appeal for many urban dwellers.
Chicago lofts are located throughout the 77 communities of Chicago and now are branching out to many of the suburban areas. Many are former commercial and industrial building that have been converted and now used for residential purposes. Loft living generally feature open living floor plans, high ceilings, expansive spaces, exposed ductwork, and a general tendency toward informal living.
