Archive for the 'Housing Market' Category
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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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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