Survey Shows: Local Residents Still Value Housing
February 1st, 2012 categories: Chicago Real Estate News
Housing values in Chicago continue to fall. Foreclosures remain high. It’d be understandable if fewer local residents aspired to owning a home.
However, a survey from the Illinois Association of REALTORS® shows the opposite: The vast majority of Illinois residents still want to own their own homes.
According to the survey residents, an amazing 82 percent of respondents said that owning a home remained an important part of the American dream. A total of 75 percent of respondents said that owning a home was a safer investment than was putting money in the stock market.
In a result that may seem surprising, considering how dramatically home values have fallen in Chicago and across the state, 61 percent of survey respondents said that it was better to own a home than rent.
Of course, the economy and its problems have had an impact on the housing market in Chicago and the rest of the state. That may explain why only 48 percent of survey respondents said that owning a house is a major benefit for long-term investment in their futures.
Still, the results of the homeownership survey are amazingly positive, even during the worst housing market that Chicago and the rest of the nation have seen in decades. It just shows how important the idea of owning a home is to most people.
This is probably because housing has value beyond the financial. Ideally, we want our homes to increase in value and become good financial investments. But our homes are also an escape from the rest of the world. They are the places in which we watch our children grow up. They are places filled with happy memories.
In short, homes are special. They are more than just investments.
This explains why even in the most challenging of economic times, the dream of owning a home remains a dear one for the vast majority of local residents.
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New Survey Paints Clearer Picture of Chicago Housing Market
January 30th, 2012 categories: Chicago Real Estate News
Who is buying homes in Chicago? A new survey from the National Association of REALTORS® gives a clear picture. And Mary Ellen Podmolik, a writer for the Chicago Tribune, does a good job of showcasing the most interesting numbers in a recent story.
According to Podmolik’s story, the percentage of African-Americans buying homes in Chicago for the year ended in June of 2011 rose to 14 percent. Two years prior to this, that number stood only at 10 percent. At the same time, the percentage of Chicago buyers who were Asian fell to 8 percent from 12 percent in 2009. Hispanic buyers, Podmolik writes, continued to account for 3 percent of the Chicago market.
Podmolik took this data from the National Association of REALTORS®’ most recent profile of home buyers and sellers. The survey size of Chicagoans was a small one, less than 200 buyers. Still, the association numbers tell an interesting story of how Chicago home buyers are changing.
According to the survey, the median income of a Chicago home buyer stood at $103,100 in 2010. That same figure stood at a lower $94,100 in 2008. The median purchase price of a Chicago home fell to $269,000 last year. That’s a fall of just about 5 percent from 2009. And while buyers paid less last year, they received more home for their dollars. The median size of a home purchased in Chicago last year was 1,600 square feet. That’s up 20 percent from the average size in 2009.
First-time buyers remained an important part of the Chicago housing market, according to Podmolik’s story. These buyers accounted for 61 percent of Chicago home purchases in 2011. In 2009, that figure stood at an even higher 64 percent.
The REALTORS® survey also found that the demand for single-family homes was on the rise in Chicago last year. According to the survey, 37 percent of all Chicago buyers and 25 percent of first-time buyers purchased detached single-family homes in 2011. Two years earlier, 27 percent of all Chicago buyers and 23 percent of first-time buyers chose single-family, detached residents.
The survey reflects a Chicago housing market that is changing in accordance with challenging economic times. The results aren’t exactly surprising, but that doesn’t mean that they’re not intriguing.
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As Rates Hit Another Record Low, Chicago Housing Remains An Affordable Opportunity
January 27th, 2012 categories: Chicago Real Estate News
It’s becoming repetitive, but it’s still good news for home buyers: Mortgage interest rates hit yet another new low last week.
It once was rare for mortgage interest rates to fall to historic lows. Now it seems to happen every week. Last week was no exception. According to a feature story in the Washington Post, the average mortgage interest rate on a 30-year fixed-rate mortgage dropped to 3.88 percent last week.
Citing Freddie Mac numbers, the Post story reported that the average interest rate on a 15-year fixed-rate mortgage stood at 3.17 percent. That’s a pretty low number. Surprisingly, though, it’s not an all-time low. Just the week before, the average interest rate on a 15-year fixed-rate mortgage loan came in just a tick lower, 3.16 percent.
These low rates are important because it makes borrowing money to finance the purchase of a single-family home or condominium far more affordable. Consider this equation: If you took out a 30-year fixed-rate mortgage loan to buy a condo or single-family home in Chicago, you’d pay just more than $1,097 a month if the interest rate on that loan was 7 percent. But if the interest rate on that same loan fell to last week’s average — 3.88 percent — you’d pay just more than $776 a month.
You don’t have to be a mathematical genius to realize that this represents a significant amount of savings. The savings are especially dramatic in markets in which housing prices tend to be higher, like in Chicago neighborhoods such as Lincoln Park and Lincoln Square. When you spend more on a house, the lower your mortgage interest rate falls, the more savings you’ll realize each month.
I’ve said it before, but it bears repeating: This remains a tremendous time to buy a single-family home or condominium in Chicago. Housing prices here remain affordable, and with interest rates lower than ever, borrowing money for a mortgage loan is even more of a bargain.
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December Numbers Provide Strong Finish To Chicago Home Sales In 2011
January 25th, 2012 categories: Chicago Real Estate News, Economic Recovery, FSBO's, For Homeowners, For Sellers, Housing Market
Though 2011 wasn’t the strongest year for Chicago existing-home sales — they were actually down 7.2 percent from 2010 — December, at least, closed the year off strong.
According to the latest home sales numbers from the Illinois Association of REALTORS®, December, 2011, existing-home sales in Chicago hit 1,536, up 6.4 percent from the 1,444 homes sold in the same month one year earlier.
The news wasn’t as good when it came to the median sales prices of these homes. According to the association’s numbers, the median home sale price for Chicago stood at $156,000 in December of last year. That’s down 6.2 percent when compared to the same month in 2010. Back then, the median sales price of Chicago homes came in at $166,250.
Bob Floss, president of the Chicago Association of REALTORS®, was quoted in the press release accompanying the December numbers as saying that the December rally was a good sign for the future of Chicago housing sales. The numbers give hope that Chicago’s winter and spring home-selling seasons will be strong ones, he said.
Floss, though, expressed concerns about the median sales price of Chicago condominiums and single-family homes. This number shows no sign of rising, and, in fact, continues to fall. Floss pointed to the large number of distressed residential properties on the market: Foreclosures tend to drag down the median sales prices of homes near them.
Until the number of foreclosures falls, don’t expect the median sales price of Chicago residential properties to rise.
The association press release also quotes Loretta Alonzo, president of the Illinois Association of REALTORS®. She says that buyers in December simply found too many good housing deals to pass up.
That’s good news, of course, for sellers trying to move their properties. It’s not great news, though, for sellers trying to get top dollar for their homes. Buyers today simply expect to find bargains on the condos and single-family homes that they purchase.
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2011 far from the best year for Chicago home sales
January 23rd, 2012 categories: Chicago Real Estate News
The year-end numbers are in, and 2011 was officially a better year for Chicago-area home sales than was 2010. But just barely. And home sales in the actual city limits fell in 2011.
That’s the news from a recent Chicago Tribune story (RYAN: http://www.chicagotribune.com/business/ct-biz-0121-home-sales-20120121,0,2382184.story) on the final 2011 residential sales numbers, which were recently released by the Illinois Association of REALTORS®.
According to the numbers, existing-home sales in the Chicago area rose by 1.3 percent in 2011 when compared to 2010. The news wasn’t as good, though, for the city itself; home sales within the city of Chicago — which hit 17,715 in 2011 — fell 7.2 percent when compared to 2010.
The news was fairly gloomy when it came to housing prices, too. Median housing prices for the city of Chicago fell 13.8 percent in 2011, hitting $175,000. In 2010, the year-end median sales price of existing homes in Chicago stood at $203,000.
This news isn’t surprising to anyone who’s followed the Chicago housing market in 2011. Simply put, this market remains a challenging one for anyone trying to sell a condominium or single-family home. This means, of course, that it’s a good market for those trying to buy homes in the city. After all, mortgage interest rates have hit several all-time lows in the last year, including a new low for 30-year fixed-rate mortgages last week. With prices continuing to fall, it’s easy for buyers to find bargains on homes in even Chicago’s trendiest neighborhoods.
Sellers, though, need to set the right price for their condos or single-family homes if they hope to move their properties. Those who set asking prices that are too high will receive few serious offers.
That’s why I recommend that home sellers in Chicago and its suburbs work closely with a REALTOR® to help sell their residences. Those who don’t, run the risk of setting the wrong asking price for their homes. And that will almost certainly bring with it a long stay on the Multiple Listing Service.
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