Loop Storefront Numbers Prove That Chicago Is One Resilient City
March 8th, 2010 categories: Chicago Info/News, Economic Recovery
No one would deny that the recession and housing slump both hit Chicago homeowners hard. After all, the median selling price of Chicago condos and single-family homes stood at $195,000 in January of this year, down 4.9 percent from where it was in the same month one year earlier.
But Chicago has weathered the economic crisis about as well as any big city. And new numbers regarding the city’s downtown business district back me up on this.
Crain’s Chicago Business recently reported on new data provided by Baum Realty Group that show that the Loop’s storefront businesses are actually doing pretty well, despite the dismal economy.
According to the report, the Loop’s storefront vacancy rate actually dropped in 2009, falling to 7.8 percent last year from 13 percent in 2008. At the same time, the number of new deals rose. The Baum report said that 57 storefronts opened in 2009. That compares favorably with 2008, when 53 storefronts opened.
And in good news for building owners, average asking rents in 2009 rose 3 percent to $60.56 a square foot.
Of course, the report didn’t bring only good news. The number of new storefronts in the Loop paled in comparison to the 91 that opened in 2007 and the 99 that came in 2006. Of course, those businesses opened before anyone realized just how powerful of a recession the country would experience.
The Loop numbers give me even more hope that Chicago is coming out of the recession and will be stronger than ever. They also give me hope that the local housing market’s recovery will only continue.
We’ve already seen housing sales increase throughout much of the latter part of 2009 and into 2010. I understand that the Loop is only one small part of our city. But it’s an important part. And a vibrant downtown shopping district, filled with restaurants, shops and theaters, is one reason why people want to live in Chicago.
When you’re fortunate enough to live in a city as diverse and strong as Chicago, you can always take comfort in one fact: Yes, we will experience economic down times. But the city is strong enough to always survive them.
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Single Buyers Becoming A More Significant Part of Home-Buying Market
March 3rd, 2010 categories: Chicago Info/News, Chicago Neighborhoods, Economic Recovery, For Buyers
First-time homebuyers have been given a lot of credit, including in this blog, for helping home sales rise in Chicago throughout much of 2009. But the Chicago Tribune, in a story on Sunday by Mary Ellen Podmolik, revealed that there’s another group of buyers that has done its share to boost the sale of local condominiums and single-family homes: single buyers, especially women.
According to the Tribune story, the number of unmarried single buyers has been on the rise since the Chicago housing market first began booming about seven years ago. Since then, there have been twice as many single female buyers as there have been single males.
The Tribune cites data from the National Association of REALTORS® that says that for the fiscal year ended in June, single buyers accounted for 38 percent of all home purchases in the Chicago area. And single women accounted for 26 percent of these sales.
In Chicago itself, not counting the suburbs, 44 percent of buyers for the 12 months ended in June were single, the REALTORS® association data said. Single females accounted for 29 percent of the condominium and single-family home sales in Chicago during the 12-month period.
That’s higher than the national average, where single women accounted for 21 percent of all home purchases. Nationally, single men accounted for just 10 percent of home sales.
These numbers don’t surprise me. After all, Chicago is a great place for singles of any gender to live. Every neighborhood in the city boasts its own character, and the trendiest, places like Lincoln Park, Wicker Park, and Lakeview are alive with high-end restaurants, independent theaters, hip shops and busy nightspots.
At the same time, housing in Chicago’s top neighborhoods is affordable today. The city’s average median sales price is down from last year, and down even more significantly from where it stood just three years ago. This means that single buyers suddenly have more sales power. Many of them can also take advantage (for the time being, at least) of the federal government’s first-time homebuyer tax credit of $8,000.
No, the fact that Chicago is attracting single buyers doesn’t surprise me at all. In fact, I’d be more surprised if the number of single buyers went down.
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High Percentage of Chicago-Area Home Sales Were Distressed Properties in 2009
March 1st, 2010 categories: Chicago Info/News, Chicago Neighborhoods, Economic Recovery, Foreclosures, Housing Market
The good news about 2009 is that housing sales began rising again in Chicago during much of the second half of the year. The bad news? A large portion of these home sales in the Chicago region last year were of the distressed variety.
A local real estate company reported that distressed properties accounted for at least 34 percent of home sales reported in the Chicago area in 2009.
This continues a trend that started in late 2007. And it’s not one unique to Chicago. As the nation’s economy began to falter, a growing number of homeowners lost their jobs or saw their annual incomes plummet. Many of these homeowners suddenly began struggling to make their mortgage payments for the first time in their lives.
In 2009, U.S. households received 2.8 million foreclosure filings, according to online real estate data company RealtyTrac. This figure represents an all-time high for the country.
It’s little surprise, then, that so many of the Chicago area’s housing sales last year were of foreclosed and distressed properties. Fortunately, there is help for homeowners who are struggling to pay their mortgage bills. The federal government in 2009 launched its Home Affordable Modification Program, which provides financial incentives to encourage mortgage lenders and banks to somehow lower the monthly mortgage payments of struggling homeowners.
If you are having difficulty making your mortgage payments, call your mortgage lender immediately. Even if your lender isn’t participating in the federal program, it might still be willing to modify your mortgage loan. After all, your lender does not benefit from seeing you lose your home to foreclosure.
I’m glad that home sales seem to be rising steadily these days. But I’ll be even happier when a much smaller percentage of these sales comes from distressed properties.
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Price Cuts Spur Big Condo Sales in Chicago
February 25th, 2010 categories: Chicago Real Estate News, For Buyers, For Sellers, Housing Market
One thing still works for buyers struggling to sell condos in Chicago’s still sluggish condominium market: price cuts.
The HousingWire news service reported on Feb. 19 that Chicago real estate developer Belgravia Realty Group managed to sell 50 condominiums in just four weeks recently by cutting prices on units at its 565 Quincy project in the Loop by as much as 30 percent.
This made a big impact in the downtown condo market, according to Appraisal Research Counselors, the Chicago commercial appraisal firm quoted in the story. The company said that sales at 565 W. Quincy accounted for 79 percent of all new-construction sales in downtown Chicago since the first of the year.
565 W. Quincy, located at the intersection of Jefferson St. and Jackson Blvd. in downtown Chicago, provides an important point about the current state of Chicago’s downtown condominium market: Sales may be going up, but developers are slashing asking prices to fuel the jump.
It’s a good lesson for condo owners in the city, too. If you have to sell your condo in today’s residential market, make sure to meet with a skilled REALTOR® before you list your unit. A REALTOR® who knows your neighborhood and its localized real estate market will be able to help you set the right initial asking price for your unit.
Buyers today still have a lot of inventory from which to choose. This is especially true when it comes to condominium units in downtown Chicago. There are simply too many unsold units clogging the market. To sell a unit today, then, you have to do everything you can to set yours apart from your competitors. The best way to do this, still, is by offering the best price for your unit.
If you try pricing your downtown Chicago condo at an asking price that is too high for the current market, the odds are great that your unit will sit for months without attracting any solid offers. Price it right, though, and you greatly increase your chances to move your unit.
Belgravia knows this lesson. It’s one that all condo sellers should learn, too.
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Hey, Chicago, We’re Not as Miserable as We Once Were
February 23rd, 2010 categories: Chicago Real Estate News
Sometimes I don’t think people get Chicago at all. How else to explain how our city, filled with amazing theaters, top-flight restaurants and loads of recreational opportunities, consistently ranks so high in all of those high-profile lists of lousy places to live?
The latest blow came last week, when Forbes Magazine released its latest version of its list of America’s Most Miserable Cities. Chicago ranked 10th on the list, a bit of an improvement from the 2009 list, when our city came in at third.
Personally, I find such lists to be silly. Sure, they get people talking. My colleagues and I were debating the merits of Chicago’s spot on the list the day the news broke. But, really, such lists are hardly scientific. And in Chicago’s case, “researchers” aren’t taking into account all of the things that make our city so great.
For instance, there’s the amazing Millennium Park. There’s the Magnificent Mile, Wrigley Field, Soldier Field, the Museum of Science & Industry, Alinea Restaurant, the Steppenwolf Theatre … I could go on forever. How could a city with so many terrific places be the 10th most miserable in the country?
Granted, the survey does take weather into account, and no one around Chicago is too happy with the weather these days. Then there’s unemployment, which, of course, is high right now in Chicago. But there aren’t many cities across the country in which residents aren’t worried about losing their jobs.
To reassure myself that, despite what the editors at Forbes might think, people really do love our city, I just have to look at the growing number of real estate transactions I’m handling these days in neighborhoods like Lincoln Square, Lincoln Park, Lakeview and Wicker Park. People are seeking out condos and single-family homes in these areas because they’re impressed with how much in entertainment, dining and shopping these areas have to offer. They also know that real estate in these neighborhoods, despite the housing slump, tends to retain its value.
For the record, Cleveland topped Forbes’ list of miserable cities this year. The city reached the top because of high unemployment, lousy weather, equally lousy sports teams and corrupt public officials. Some of that does sound familiar to Chicago residents, I suppose. (Right, Blagojevich?) But most of the other cities on Forbes’ list simply can’t compare to Chicago when it comes to amenities and housing values.
In short, there is no way Chicago belongs on the magazine’s list.
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