Archive for the 'Renting in Chicago' Category
Is Turning Chicago Foreclosures Into Rentals A Viable Solution?
December 15th, 2011 categories: Chicago Real Estate News, Economic Recovery, Foreclosures, Housing Market, Renting in Chicago
Homeowners trying to sell their residences don’t need to be told that there are too many foreclosures in Chicago neighborhoods. The high number of distressed properties is making it more difficult for them to sell their own residences at reasonable prices.
Think of it this way: Buyers are more than happy to spend $50,000 less on a foreclosed home or a short sale that sits three doors down from sellers trying to sell their similar residence the traditional way. Simply put, distressed homes sell for less, driving down the value of surrounding residences.
The Chicago Sun-Times, though, recently ran a feature story on an interesting new trend regarding foreclosure properties: According to the story, more of them are becoming rentals.
According to the Sun-Times story, more than one in 10 Chicago houses is now vacant. To help fill these empty spaces, the city and several nonprofit agencies are renting out a growing number of these properties. These groups are also offering buyers financial incentives to purchase these properties.
The Sun-Times story cites the efforts of the Neighborhood Stabilization Program run by the city and Mercy Portfolio Services. The program has received $169 million from the federal government in Recovery Act dollars, and so far has used some of these funds to pay for 51 demolitions and the purchase of 161 residential properties. The purchases are the interesting part of the equation: The residential properties total 819 housing units in 22 different Chicago neighborhoods. The Sun-Times reports that 75 percent of these housing units are for rent.
Foreclosures will continue to glut the Chicago housing market for years to come. There are just too many distressed properties on the market today. It’s good to see, though, the city and nonprofit agencies working together on creative ways in which to deal with them.
No one program will completely ease the burden that foreclosures and short sales place on the Chicago housing market. But the more programs that do attack this problem, the better.
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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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Why Not Rent That Unsold Condo?
May 27th, 2010 categories: Chicago Info/News, Chicago Neighborhoods, For Homeowners, Renting in Chicago
It’s not easy selling a condo in Chicago these days. There are just too many vacant units on the market. Not surprisingly, a growing number of condo owners in the city are taking a bold step: They’re renting their units out for short-term stays.
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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Foreclosures Don’t Only Impact Homeowners
May 10th, 2010 categories: Chicago Info/News, Economic Recovery, Foreclosures, Housing Market, Renting in Chicago
When you think of residential foreclosures, it’s natural to think of families thrown out of their homes. It’s not a pleasant picture.
But you might be surprised to learn that the foreclosure crisis has actually impacted renters in Chicago more than it has city homeowners. The Chicago Sun-Times recently wrote a story about this surprising situation, quoting a report from the Lawyers’ Committee for Better Housing that more than 125 multi-family buildings in Chicago fell into foreclosure each week in 2009.
The Lawyers’ Committee report said that 20,691 rental units were impacted by foreclosure in 2009. For the year, Chicago saw 6,560 multi-family building foreclosures. That’s more than the 4,000 single-family homes and condominiums that fell into foreclosure during the same year.
Foreclosure can be a nightmare for renters, too. We’ve all read news stories highlighting landlords who fail to tell their renters that they’ve fallen behind in their mortgage payments. When the building falls into foreclosure, these renters suddenly have no place to live. Imagine that shock: One morning you wake up with a roof over your head. The next, your home is yanked away through no fault of your own.
And that is just part of the problem that renters often face when their landlords lose their buildings to foreclosure. The Sun-Times story says that some landlords begin to neglect their buildings once they fear that they are in danger of foreclosure. The tenants of these buildings, of course, are the ones who suffer when landlords avoid fixing the lights in common areas, keeping the lawns trimmed or fixing broken windows. Many lenders won’t take responsibility for the upkeep of these buildings, either.
The Sun-Times story is an interesting one. We’ve all become accustomed to thinking of foreclosures as a problem for homeowners. But the story shows that in Chicago, as in the rest of the nation, foreclosure really is everyone’s problem. And until the housing foreclosure rate in the country drops, you can’t expect housing prices to fully rebound from the residential slump.
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Are You Ready To Buy? The Age-Old Rent vs. Buy Debate
August 19th, 2009 categories: For Buyers, For Homeowners, Housing Market, Real Estate News, Renting in Chicago
The Wall Street Journal recently ran an interesting story about the old rent vs. buy debate. This story focuses on the positives of renting, citing the high number of people who got in over their heads financially and are now facing housing foreclosure.
While I don’t agree that renting makes more financial sense than owning a home, I did appreciate the story for one reason: It might persuade some people to look carefully at their own finances before searching for a home and applying for a mortgage loan.
The financial benefits of owning a home are numerous. Historically, condominiums and single-family homes have risen in value. This still holds true, even with the housing slump. If you buy a home and hold onto it for a long enough period of time – say at least five or seven years – the odds are great that your home’s value will have risen enough for you to make a nice profit when you sell. This is especially true if you purchase a condo or single-family home in one of Chicago’s top neighborhoods, places such as Lakeview, Lincoln Square, Southport, Lincoln Park or Ravenswood.
Secondly, when you own a home, and pay off your mortgage, you’re building equity. You can tap into this equity to pay for big expenses. You can’t build equity when you’re renting.
Owning a home also brings with it some amazing tax benefits. This is often a positive that people overlook when considering the rent-vs.-buy debate.
And don’t forget, a home is more than just a financial investment. It’s a place of your own. If you want to knock out a wall, you can. If you want to build a new master bathroom, it’s your choice.
All these positives, though, don’t mean that owning a home is for everyone. This is something that the Wall Street Journal gets right. Some people just aren’t financially ready to take on the burden of a monthly mortgage payment. It’s one of the big reasons why we’re seeing so many housing foreclosures today.
Take a look at your own financial situation. Can you handle making a mortgage payment of $1,500, $2,000, $2,500 or more every month? Do you have a strong credit rating? Are you able to pay all of your bills on time every month? Are you saddled with thousands of dollars worth of credit-card debt?
The answers to these questions will help you determine if you are ready to own a home. Taking ownership of a condominium or single-family home is a big financial responsibility. But if you’re up to the task, it might be the smartest money move you ever make.
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