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.

Crain’s quoted numbers from Moody’s Analytics saying that the Chicago-area economy should grow by about 1.6 percent in the first half of 2012 and by about 2 percent for the full year. These numbers sound positive until you consider that six months ago Moody’s predicted that the Chicago-area economy would grow by about 4 percent in 2012.

Crain’s points to the economic uncertainty caused by unstable financial markets and European debt worries. This, the story says, has made employers overly cautious when making new job hires.

Because of this, Moody’s is predicting that the unemployment rate in the Chicago area will jump to 11.4 percent in the first half of 2012. That’s up from 10.6 percent in the second half of 2011. Six months ago, Moody’s predicted that the Chicago-area unemployment rate would stand at 9.2 percent in the first half of 2012.

This is bad news, too, for the Chicago housing market. Buyers won’t be as willing to invest in a new home if they’re still worried about losing their jobs. And as Moody’s numbers show, Chicagoans have little reason to be optimistic about the safety of their jobs.

Just because a new year has started, it doesn’t mean that Chicago, and the rest of the nation, don’t still face serious challenges. Until unemployment finally falls, expect the Chicago housing market to struggle.

This latest news points out once again how important it is for home sellers to work with a skilled REALTOR® to set the right price for their condominiums or single-family homes. Buyers today are smart; they won’t overpay for a home. Those sellers who do set an unrealistic asking price will see their residence sit on the market for months, ignored by today’s savvy home buyers.

According to a recent feature story in the Chicago Tribune, the number of homes in the foreclosure process rose 20 percent in November in Cook County when compared to one month earlier. The Tribune said that much of this increase stemmed from a jump of 57 percent in the number of homes in the county that were sent to court-ordered auctions.

Citing data from online foreclosure company RealtyTrac, the Tribune reported that foreclosure filings were reported on more than 224,000 properties across the United States in November. That’s a drop of 3 percent from October.

No matter how you look at the numbers there are too many housing foreclosures in Chicago and the United States. This is unfortunate because foreclosure has such a devastating effect on families.

If you’re struggling to pay your mortgage bills each month, call your mortgage lender immediately. The sooner you call your lender, the better your chances of working out a new payment arrangement, a reduction in your mortgage loan’s interest rate or some other way to avoid losing your home through foreclosure.

I understand that this is no easy thing, calling your mortgage lender and explaining that you’re struggling to pay your monthly housing bills. But lenders will often work with you to find some solution to your mortgage woes.

Foreclosures remain the number-one deterrent to a housing market rebound, both in Chicago and across the nation. Foreclosures make it more difficult for sellers to get the prices they want for their homes. Buyers would rather pay $50,000 less for a similar home down the street that’s gone through the foreclosure process.

If you don’t want to become the latest foreclosure statistic, call your lender. Ignoring your mortgage problems won’t help them go away.

It’s little surprise, then, that many buyers — especially first-time buyers — are getting help from family members or friends to cover their down payment requirements.

A story by the Wall Street Journal reported that 27 percent of first-time buyers in 2010 received a financial gift from a friend or family member to use toward their down payments. That figure is up from 22 percent in 2009 and 23 percent in 2005, according to numbers from the National Association of REALTORS®.

The Wall Street Journal story quoted a mortgage adviser from Chicago who explained that a 10 percent down payment on a modest Chicago condominium or single-family home could come to $30,000 to $40,000. That’s a lot of money for first-time home buyers to scrape together.

Of course, there are options for buyers seeking lower down payments. Buyers with solid credit can qualify for FHA mortgage loans that come with down payment requirements of just 3.5 percent.

Those working with traditional mortgage loans, though, will often have to make a down payment of 10 percent to 20 percent of a home’s purchase price. Again, in big cities such as Chicago, that’s hardly a small sum of money.

The Wall Street Journal story provided some good advice for buyers who are relying partly on gifts to finance their down payment. Freddie Mac requires buyers to provide at closing funds equal to at least 5 percent of the home’s purchase price if the loan-to-value ratio is greater than 80 percent and a relative or friend provides a gift to help with the cost of the down payment.

The Journal story also says that buyers must properly document their down payment gifts. For instance, if a buyer’s bank account suddenly jumps from $10,000 to $15,000 thanks to a gift from a family member, the loan officer handling the loan will want to see a gift letter. This letter should provide the giver’s name, address and telephone number. The Journal also reported that the letter should spell out the relationship between the buyer and the person providing the gift.

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.

The Chicago singer and Oscar-winning actress has a contract pending on a 12,000-square-foot home in the Chicago suburb of Burr Ridge, according to the Chicago Tribune. The home is listed at $2.795 million.

It’s not certain yet just what Hudson will pay for the house. But Hudson’s purchase, even if it’s a full-price offer, provides a quick lesson on the state of the housing market in the Chicago area today. And for Chicago home sellers, the message is clear: Price reductions are still the order of the day for many city condominiums and single-family homes.

If Hudson pays $2.795 million for the home, she will nab it for a price that is more than 33 percent lower than the residence’s original listing price, according to the Chicago Tribune story. That original list price stood at $4.2 million before falling to the current price that attracted Hudson’s offer.

This is happening on a smaller scale to home listings across the Chicago area. Sellers still are frequently dropping their asking prices as their only way to attract buyers. There’s a reason for this: Home buyers today are savvy. They know that the housing market, both in Chicago and across the country, is down. They know, too, that many sellers are eager to move their condominiums and single-family homes, and are willing to drop their asking prices to do it.

If you’re trying to sell today, it’s important that you work with a REALTOR(R) who knows your market. This professional can help you set the right price for your listing, and can boost your odds of moving your residence in the shortest amount of time possible.

Simply put, too much holiday cheer can turn off potential buyers. It can also make your home look cluttered and small. And those are two adjectives you don’t want buyers to associate with your condo or single-family home.

Remember, selling a home is a very different process than is living in it. When you’re selling, your home must also look its best. And you must always have it decorated to showcase its most positive features. When potential buyers tour your residence, you want them to remember the size of your generous master bedroom, the modern appliances in your updated kitchen and the open space in your living room.

You don’t want them remembering that 10-foot-tall Santa waving to them from your front lawn.

Tasteful decorating is even more important today. The number of home buyers shrinks during the holidays and winter months even in the strongest of residential housing markets. It’s not as much fun to tour homes when the temperature plunges below the freezing mark.

But in today’s challenging housing market, one in which it’s difficult to even move condos and single-family homes in top neighborhoods such as Lincoln Park, Lakeview and Lincoln Square, it’s more important than ever to showcase your home to its fullest. The number of buyers out there is low. And they have plenty of homes from which to choose when they’re finally ready to purchase.

Don’t give these buyers a reason to bypass your residence. It’s OK to decorate. No one will hold your holiday cheer against you. But when you overdo it, and when your home looks more like an amusement park ride than a residence, you run the real risk of turning way those elusive buyers that are actually out there today.

According to the Medill report, which cited figures from the Mortgage Bankers Association, during the week ended Nov. 4 mortgage refinance applications rose by 12.1 percent from the previous week.

These numbers were recorded at a time in which the interest rate for a 30-year fixed-rate mortgage stood at 4 percent and the rate for a 15-year fixed-rate mortgage loan stood at 3.31 percent, according to Freddie Mac.

Homeowners can save a significant amount of money by refinancing. For instance, homeowners with a 30-year fixed-rate mortgage loan of $165,000 with an interest rate of 5.25 percent would pay $911.14 every month. Those homeowners with the same loan but an interest rate of 4 percent would pay $787.74 a month. Those savings add up over the course of a mortgage loan.

However, homeowners should remember that mortgage refinancing is not free. The Federal Reserve Board estimates that homeowners usually pay from 3 percent to 6 percent of their outstanding principal balance in refinance fees. That’s why it’s important for homeowners to work closely with mortgage loan officers to determine if the savings they’ll receive every month by refinancing will allow them to quickly cover the costs of the refinance.

Also, homeowners should realize that a refinance will take some work on their part. They’ll have to meet certain credit requirements to qualify for the best interest rates. They’ll also have to provide plenty of paperwork to their lenders to close the refinance. This often includes tax returns, paycheck stubs, bank checking and savings accounts, credit card bills and other documents.

But those homeowners who do qualify for the lowest interest rates can generate plenty of savings by refinancing. And because interest rates remain so low, this is the perfect time for them to take action.

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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Dennis Rodkin, the writer of Chicago Magazine’s Deal Estate column, tackled this issue last week. He wrote that the idea is gaining popularity among condo owners who are hoping to trim at least some of the costs associated with paying the mortgage on units they no longer want to own.

Rodkin cites a spokesperson from HomeAway, an online vacation-home rental company, who told him that the service had 120 listings in Chicago in April. That’s up 53 percent from the same month one year earlier. More importantly, the spokesperson mentioned that more than half of these vacation-home listings were city condos.

For vacationers, this is good news. Spending a week in a Chicago condo in Lakeview, Lincoln Park, Lincoln Square or just about any other hot city neighborhood makes for a great vacation. It’s a benefit for the owners of these units, too. They may not be able to sell their Chicago condos; but there’s no reason why they can’t at least collect a nice chunk of rent during the prime summer vacation months.

Unfortunately, not everyone is happy about this. Some condo residents worry that the increasing number of rentals will turn their buildings into party zones.  Rodkin reports that the Chicago City Council’s Joint Committee on Zoning License is considering a new nightly vacation rental ordinance. If approved, the measure would force condo owners to pay licensing and inspection fees when they rent out their condos. The ordinance would also force them to pay taxes on their rental proceeds.

I understand the concerns of condo owners, but this ordinance does seem more than anything like a way for the city to squeeze even more money out of its residents. If this measure passes, I wonder, will it put a serious crimp in the short-term rental plans of Chicago condo owners?

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