Archive for the 'Economic Recovery' Category
People Still Want To Own Homes, Even In A Down Economy
December 9th, 2011 categories: Chicago Real Estate News, Economic Recovery, Housing Market, Renting in Chicago
With so many homeowners owing more on their mortgage loans than what their condominiums or single-family homes are worth, and with all the bad press that the housing industry has received since 2008, you’d think that renters would be pretty happy. After all, they aren’t saddled with a home that’s value has plummeted in recent years.
But according to a story by the Wall Street Journal’s MarketWatch Web site, this isn’t the case. In fact, as the story points out, most renters today would rather own a home.
The MarketWatch story reports on a survey by Whirlpool Corporation and Habitat for Humanity, conducted by the National Association of Home Builders, that found that 68 percent of renters would rather own their own homes.
The survey also found that 60 percent of renters were concerned that their rents were too high. A total of 52 percent of renters said that they felt the money they were paying for electricity and gas was too high, too.
The survey shows the enduring strength of housing in the United States. Even during one of the most challenging times for the housing industry, U.S. residents, overwhelmingly, still believe in the American dream of owning their own homes.
There’s a reason for this: A house isn’t just an investment. It’s a place where families share memories, where children grow up. It’s a safe harbor in a sometimes stressful world.
And this is why housing remains so important to so many U.S. residents. It’s also why a down economy and a slumping housing market are not nearly powerful enough to derail the American Dream of homeownership.
It’s also why I advise my buyers to consider all the positives of owning a home. Yes, we want our homes to increase in value, something that, historically, they have, especially in strong markets such as Chicago. But buyers also need to consider the other benefits of owning a home. When they do, the majority of them recognize just how desirable owning their own home is.
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“Good” News, Bad News Regarding The Chicago Housing Market
December 6th, 2011 categories: Chicago Neighborhoods, Chicago Real Estate News, Economic Recovery, For Buyers, For Homeowners
The Chicago Tribune in late November brought both good and bad news for Chicago homeowners in the same story, covering reports showing that home prices in the Chicago area fell in September but that the number of local owners underwater on their mortgage loans also dipped.
First, the prices: According to the latest findings from the Standard & Poor’s/Case-Shiller home price index, home prices in the Chicago area dropped 0.8 percent in September when compared to August. They were also down 5 percent when compared to September of 2010.
Prices in the Chicago area today are at levels the area last saw in the spring of 2002, according to the Tribune story.
The “better” news? The Tribune also reported on the latest numbers from CoreLogic that showed that 24.9 percent of all homeowners with a mortgage in the Chicago area owed more on their loans than what their residences were worth at the end of September.
That number isn’t great. But it is better than the 25.2 percent of homeowners who were underwater on their mortgage loans at the end of the second quarter of this year.
Still, even with that slight improvement, 383,625 residences in the Chicago area were underwater on their mortgage loans at the end of September. Obviously, that number is far too high, especially considering nationally that only 22.1 percent of all residential properties with mortgage loans were underwater at the end of the same month, according to CoreLogic.
Both sets of numbers show that the housing market in Chicago, as in the rest of the nation, has a long way to go before it can be considered healthy again. The good news is for buyers: Home prices in the City, even in traditionally attractive neighborhoods such as Lakeview, Lincoln Park and Lincoln Square, remain affordable. Buyers today can find great bargains on good properties in the best locations.
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New Data Bring Hope To U.S. Housing Industry
November 22nd, 2011 categories: Chicago Real Estate News, Economic Recovery, Housing Market
Good news hasn’t exactly been plentiful when it comes to the nation’s housing market. But two key pieces of data released earlier this month offer at least the hope that better times are on the way.
According to a USA Today feature story, the percentage of consumers falling behind on their monthly mortgage loan payments fell during the third quarter. And in October, building permits for new single-family homes reached their highest level in 10 months.
According to numbers from the Mortgage Bankers Association, the share of mortgage holders who have missed at least one mortgage payment, but are not yet in the foreclosure process, dropped to 8 percent in the third quarter. In the second quarter of this year that figure stood at 8.4 percent.
At the same time, the share of mortgage holders more than 30 days behind but less than 60 days late on their mortgage loan payments fell to a four-year low of 3.2 percent, down from a figure of 3.5 percent one quarter earlier.
In even more good news for the struggling housing industry, permits for new home construction jumped 5.1 percent for single-family homes and 24 percent for multi-family units in October, according to data from the U.S. Commerce Department.
Of course, these two pieces of good news do not mean that the housing market is on the way back. As long as unemployment remains high across the country, the housing market will remain sluggish. And until we see fewer foreclosures across the country, don’t expect housing prices, in Chicago or across the country, to rise, either.
But the new numbers regarding permits and delinquencies do at least offer some hope. And when it comes to the U.S. housing market, hope has been in short supply these days.
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Zell: High-Quality Real Estate Still A Good Investment
September 22nd, 2010 categories: Chicago Info/News, Economic Recovery, For Buyers, Housing Market
It’s easy these days to get down on the U.S. economy. The recovery from the Great Recession hasn’t been strong enough to please anyone. The national unemployment rate is still too high. Housing values are stagnant. Home sales are down.
But, no less a financial guru than Sam Zell says that the U.S. economy is now on the right track. And that certainly qualifies as good news.
The Bloomberg news service covered Zell’s recent speech at a real estate conference in Chicago. According to the story, Zell told audience members that the U.S. economy will continue to improve and that high-quality real estate remains a wise investment.
I couldn’t agree with Zell more, especially when it comes to his thoughts on the value of real estate. I’ve argued during even the worst days of Chicago’s real estate slump that city housing remains a top investment. Yes, the value of Chicago condominiums and single-family homes is down now. But that just makes this an even better time to purchase local real estate.
Housing in Chicago’s top neighborhoods, places like Lincoln Square, Lincoln Park, Lakeview, Bucktown and Ravenswood, remains a solid investment. It’s true that no one can predict how home values will react over the years. But historically, home values have risen over time. The key is for owners to hold onto their homes for a long enough period of time – usually five years or more does the trick.
Buying a house was never meant to be a get-rich-quick investment. Remember, when you buy a condominium or single-family home, you get the benefits of living in that home. You also get tax advantages that you don’t get when you rent. You can’t say that about any other investment you can make.
During the days of the U.S. housing boom, buyers in Chicago were able to purchase condos or single-family homes in hot neighborhoods, fix them up and sell them for sometimes double what they initially paid, all in a few months’ time. That isn’t happening today.
But that doesn’t mean that owning a home is a bad financial investment. Though nothing is guaranteed, those homeowners who are patient will usually find that their homes are good investments.
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Home Sales Up or Down? It Depends on the Numbers You Use
September 16th, 2010 categories: Chicago Info/News, Economic Recovery, For Buyers, For Homeowners, For Sellers
How healthy is the Chicago housing market? The short answer is that it’s as healthy as most housing markets across the country. The more complicated answer? That depends upon what numbers you use.
According to the most recent sales statistics from the Illinois Association of REALTORS®, the sale of single-family homes and condominiums in Chicago fell 19.5 percent in July from the same month one year earlier. In July, 1,589 homes were sold. That’s down from 1,975 homes sold in the same month in 2009.
Now, that number seems awfully bad. But it isn’t as bad when you consider that condominium and single-family home sales fell 27 percent across the nation in July.
Chicago home sales also look stronger if you consider year-to-date sales. Thanks in no small part to the federal first-time and move-up buyer tax credits, both of which expired on midnight on April 30, Chicago’s year-to-date home sales are ahead of what we saw last year.
According to the numbers from the Illinois Association of REALTORS®, Chicago’s housing sales from January through July were up 25 percent from the same period in 2009. So far this year, Chicago has seen 12,397 home sales. That’s far ahead of the 9,915 home sales the city saw from January through July of 2009.
If you’re still looking for bad news from the REALTORS® association, you can always study its median sales price numbers. The median price is an important one; it’s the figure at which half of homes sold for higher prices and half for lower.
According to the association, the city of Chicago’s median home price in July stood at $196,000. That’s down 19.8 percent from the $245,000 at which the median stood in the same month one year earlier. The year-to-date median sales price of $215,000 is down 6 percent. The median price was $229,000 for the period of January through July of 2009.
The point of all this isn’t to confuse home buyers or sellers. It’s to point out one fact: The Chicago housing market is a mixed bag of positive and negative news today. In that respect, it’s little different from the majority of housing markets across the country.
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