Archive for the 'For Homeowners' Category
Chicago Condo Sales Show Some Life, But For How Long?
February 17th, 2010 categories: Chicago Info/News, Economic Recovery, For Buyers, For Homeowners, For Sellers, Housing Market
I believe that the Chicago housing market is in the middle of a turnaround. Some might accuse me of being overly optimistic; after all, I am a REALTOR®. A revived housing market is certainly in my best interests.
But more and more, the local housing numbers are backing up my optimism.
For instance, Crain’s Chicago Business last week reported that the sales of condominiums in downtown Chicago rose in the fourth quarter of 2009. This is especially significant, as city condo sales dropped dramatically as the Chicago real estate slump worsened. To see condo sales rising, even slightly, is as good a reason as any for optimism.
The Crain’s story, of course, wasn’t all good news. It’s true that builders sold 148 condominiums and townhomes in downtown Chicago during the last three months of 2009. And it’s also true that this number is a nice increase from the 56 condo and townhome sales made in downtown Chicago in the third quarter of the year.
But Crain’s does throw in some sobering news: The story quotes researchers from Chicago’s Appraisal Research Counselors who say that the Chicago condo market won’t make a true rebound until the local unemployment numbers fall. The story also says that the number of condo sales won’t rise more dramatically until local buyers gain faith that the prices of downtown condominiums will no longer continue to drop.
Gail Lissner, vice president of Appraisal Research, said it best when she was quoted as saying that Chicago buyers still have to be convinced that the local housing market has finally bottomed out and that housing prices will soon start to appreciate at a faster rate.
Still, it’s hard not to get excited by these latest Chicago housing numbers. I’m still confident, in fact, that next year we’ll look back at 2010 as the start of our city’s housing recovery. I’m not sure when, or if, downtown condo sales will again approach the sales numbers they registered during the days of the housing boom. But I am confident that buyers will begin purchasing these units again. Downtown Chicago is simply too enticing and strong of an area for it not to feature a condo revival.
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Home Equity Numbers Not As Sobering As Thought
February 16th, 2010 categories: Chicago Info/News, Economic Recovery, For Homeowners, Housing Market, Mortgage Info
Late last year, data company First American CoreLogic released a report saying that one in every four homeowners were underwater on their mortgage loans in the third quarter of 2009. These homeowners owed more on their mortgage loans than what their homes were worth.
It was a sobering statistic, especially considering how important home equity is to the wealth of most U.S. homeowners. You’d think from news like this that the total value of U.S. homeowners’ home equity would have plummeted during the recession and housing slump.
Surprisingly, though, you’d be wrong.
Syndicated real estate columnist Ken Harney recently reported on the fact that the net equity of U.S. homeowners actually grew from the first quarter of 2009 through the third quarter of that same year. It grew, in fact, by nearly $1 trillion during this period. Harney also reports that it grew by $418 billion from June 30 of 2009 through Sept. 30 of the same year.
These numbers pale in comparison to the way home equity grew during the boom years of the housing industry. But Harney points out that the most recent data suggest something positive: Prior to this report, the net equity of U.S. homeowners fell for three straight years. Perhaps the rising numbers, even if they aren’t rising as quickly as some would like, are more proof that the worst of the U.S. housing slump is over.
As far as I’m concerned, the numbers are positive. And these aren’t the only positive ones I’ve seen lately suggesting that the housing market, both locally and nationally, is finally on a rebound. Home sales continued to rise during the second half of 2009, both in Chicago and across the United States. At the same time, Crain’s Chicago Business recently wrote that even downtown Chicago condo sales rose in the fourth quarter of 2009, and that market had suffered greatly during the housing slump.
I’m not suggesting that the country’s housing market has recovered fully. But I do believe that numbers such as those showing that home equity has risen are a good sign that not only has the recovery begun, but that it’s picking up steam.
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Chicago REALTORS® – And Sellers – Looking Forward To A Better 2010
February 11th, 2010 categories: Chicago Info/News, Economic Recovery, For Buyers, For Homeowners, For Sellers, Housing Market
Chicago Tribune writer Mary Ellen Podmolik did a good job last week in summing up the mood at the 2010 Economic Forecast held by the Chicago Association of REALTORS®: 2009 was not great. This year, while not exactly shaping up to be a banner year, should be better.
The Chicago association holds its economic forecast every year. As you can guess, the last few have been quite gloomy. This year’s, though, had a different air about it: Attendees and speakers seemed to think that the worst days of the local residential real estate market were behind us.
I agree. When I look at the second half of 2009, I see a local housing market in recovery mode. Chicago condominium, townhouse and single-family home sales rebounded quite nicely even as summer turned to fall and fall turned to winter. All signs are that housing sales will continue to rise as the 2010 spring selling season arrives. Prices, however, will not rise.
The economic forecast is not only a good event at which to gauge the mood of my fellow REALTORS®, it’s also a time to look back at the year that was.
At the most recent economic forecast, we learned that 51 percent of Illinois buyers in 2009 were first-time buyers. These buyers had an average age of 29 and boasted a median annual household income of $64,400. Repeat buyers in the state had a median annual household income of $92,800.
Detached single-family homes accounted for 67 percent of the home purchases in Illinois last year. Buyers said that they generally sold their homes for 95 percent of their listing price. That would rank as a solid figure if 58 percent of sellers hadn’t also reduced their listing price at least once before selling their homes.
Podmolik also pointed out a rather grim statistic: In Chicago last year, an astounding 50 percent of single-family home sales and 18 percent of condominium sales were either short sales or foreclosures last year. Those are two numbers that simply must fall in 2010.
I think I speak for everyone when I say “good riddance” to 2009. One last look at the year is all I can take. I have a feeling, though, that when the Chicago REALTORS® hold their 2011 economic forecast, we’ll have much fonder memories of 2010.
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Even Super Bowl QBs Struggling In Today’s Condo Market
February 4th, 2010 categories: Chicago Info/News, Chicago Real Estate News, Economic Recovery, For Homeowners, For Sellers, Housing Market, Mortgage Info, Real Estate News
I don’t think Rex Grossman will have too many fond memories of Chicago. True, the former Chicago Bears’ starting quarterback led Chicago to the Super Bowl following the 2006 season. But he lost that game. He eventually lost his starting job, too. He was eventually “kicked” out of Chicago – Bears fans had long since turned on the quarterback – and is now a backup quarterback for the Houston Texans.
Now comes the news that Grossman, like so many other Chicagoans, has had to sell his city condominium at a loss. And not just any loss: According to the Chicago Sun-Times, Grossman sold his condo in River North’s Trump International Hotel & Tower for a whopping $700,000 loss.
The Sun-Times reported that Grossman sold his condo for $2 million last week. The paper also reports that he purchased it for $2.68 million in September of 2008. Grossman originally put the unit up for sale at $2.89 million before reducing his asking price to $2.3 million and eventually selling for $2 million.
Grossman’s tale is a good lesson for the owners of Chicago condominiums: Although the market has picked up considerably since 1/1/2010, unless one has lots of equity or absolutely has to sell, now might not be the best time to put your unit on the market. According to a story in the Chicago Tribune, condo prices in Chicago are now at early 2004 levels.
The Tribune cites data from Standard & Poor’s/Case-Shiller that shows that prices fell 8.5 percent for Chicago condominiums in the 12 months that ended in October.
Many condo owners have no choice but to sell now. Their employers may be transferring them to a new city. Maybe they’ve found a better job on their own in a new location. Or maybe they’re going off to graduate school across the country. Whatever the reason, these folks can’t wait out the market.
Their best bet is to do everything they can to set their condo units apart from their competition. These owners should work closely with their REALTORS® to set up a marketing plan. This may include steps as simple as giving their condo’s interiors a fresh coat of paint or something as advanced as hiring a professional stager to show off their unit in its best possible light.
In today’s Chicago condominium market, sellers need every advantage they can get.
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Struggling to Refinance? Consider the Government
January 29th, 2010 categories: Economic Recovery, For Homeowners, Mortgage Info
Mortgage interest rates are still at historic lows. But many Chicago homeowners haven’t been able to refinance to take advantage of them because the values of their city condominiums or single-family homes have fallen.
Most mortgage lenders or banks require homeowners to have at least 20 percent equity in their homes to qualify for a refinance. But the city of Chicago’s median sales price dropped to $215,000 in November of last year, according to the Illinois Association of REALTORS®. That’s down 3.4 percent compared to the $222,500 median price in November of 2008.
Those homeowners who purchased city condos or single-family homes in 2005 or in the first half of 2006 have more than likely seen their residences’ values fall even more significantly. These buyers were purchasing while the real estate boom was raging, meaning that they were more likely to pay far more for their condos or single-family homes.
What can homeowners do if the value of their Ravenswood two-flat or Lakeview condo has fallen so much that they don’t have any equity in their residences? What if they are underwater on their mortgages, owing more on their homes than what they are worth? This is hardly an unusual situation today. The latest data from First American CoreLogic shows that one in every four homeowners across the nation is underwater.
These homeowners’ best bet might be to contact their mortgage lender or bank and ask if they are offering refinances as part of the federal government’s Home Affordable Modification Program. Under this program, designed to provide some financial relief to struggling homeowners, mortgage lenders can refinance the mortgage loans of homeowners who owe on their first mortgage loans as much as 125 percent of their home’s value. This means that the owners of a $200,000 home could owe as much as $250,000 on their first mortgage and still qualify for a refinance.
Of course, you’ll have to meet certain requirements to qualify for a Home Affordable Modification Program loan. Your home’s loan must be owned or guaranteed by Freddie Mac or Fannie Mae, and you must be current on your mortgage payments.
The vast majority of mortgage lenders are participating in the federal program. But even if your lender isn’t, you should still call. Lenders can opt to refinance your loan at their own discretion, even if you are underwater.
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