Archive for the 'Chicago Real Estate News' Category
More Help From The Government For The U.S. Housing Market?
January 11th, 2012 categories: Chicago Real Estate News
Should the federal government spend more money to boost the country’s still-sluggish housing market? At least three of the top officials with the Federal Reserve think so.
And it’s hard for me to argue against their point.
The Reuters news service recently reported that three Federal Reserve officials, in separate speeches, argued that the federal government should provide additional financial stimulus for the nation’s housing market. By doing this, the officials said, the government would help speed the country’s economic recovery.
The Fed officials — William Dudley, president of the New York Federal Reserve Bank; Elizabeth Duke, governor of the Federal Reserve; and Eric Rosengren, president of the Boston Federal Reserve Bank — said that the still-shaky housing market was preventing a more robust recovery of the national economy.
According to the Reuters story, U.S. housing prices have fallen 33 percent since 2006. That has caused an estimated $7 trillion in lost household wealth. The story also said that about 12 million U.S. homeowners are underwater on their mortgage loans, owing more on their loans than what their residences are worth.
Dudley in his speech, which he gave in New Jersey, said that legislators need to take more action to kick-start the housing market. Doing so would speed what Dudley referred to as the “frustratingly slow” economic recovery and lower the country’s “unacceptably high” unemployment rate.
Dudley suggested that the government provide financial support to homeowners who have lost their jobs. He also suggested that Freddie Mac and Fannie Mae reduce the principal balances on loans to homeowners who owe more on their mortgage loans than what their homes are worth.
It’s good to see the Fed officials encouraging the government to take a larger role in supporting the housing market. Like it or not, if the housing market in this country is struggling, so is its economy. The two are linked together. Because of this, it’s important for the government to do whatever it can to boost the health of housing in the United States.
| Discussion: No Comments »
Chicago Program Aims To Reduce Number Of Vacant City Homes
January 9th, 2012 categories: Chicago Real Estate News
Chicago is home to many empty residential buildings thanks to the foreclosure wave that has swept the city. The city, though, is attempting to do something about this.
The Chicago Tribune reported that the city is taking steps to turn vacant condominium buildings into rental properties by selling the entire properties to investors and developers.
The hope is that these buyers will then rehab the buildings and make them available for renters.
As the Tribune story explains, amendments to Illinois’ Condominium Property Act make this possible. According to the amendments, municipalities can petition a circuit court to allow a receiver to sell a distressed building as a whole.
The city as of early January is in the process of taking about 150 Chicago condominium buildings and converting them into apartment properties. Chicago’s Community Investment Corp., a nonprofit mortgage lender working with the program, told the Tribune that it has found more than 250 buildings that may qualify for the program.
The program should be a boon to the Chicago housing market. One of the reasons that prices have fallen in the city is the high number of foreclosed properties on the market. Buyers won’t spend top dollar on a residence if they can buy a similar foreclosed property two blocks away for $60,000 less.
By removing some of these foreclosed properties from the Chicago market, the city is taking at least a small step toward boosting the sale prices of Chicago residences.
Of course, no one program can completely wipe out the sales price woes that many home sellers in Chicago face today. A wide range of factors – everything from foreclosures to unemployment to overbuilding – have led to the challenges in Chicago’s housing market. But anything that can help, in even a small way, should be appreciated.
| Discussion: No Comments »
Expecting A Better Chicago Economy In 2012? Think Again
January 6th, 2012 categories: Chicago Info/News, Chicago Neighborhoods, Chicago News, Chicago Real Estate News, Economic Recovery, For Buyers, For Homeowners, For Sellers
Crain’s Chicago Business gave Chicago residents hoping for a better economic year in 2012 little reason for optimism. According to Crain’s, the Chicago economy will improve in 2012, but at a slower-than-optimal rate.
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.
| Discussion: No Comments »
As Rents Rise, Owning A Home Makes More Sense
January 4th, 2012 categories: Chicago Real Estate News
As home values have fallen across the country, many potential home buyers have considered renting as an alternative to homeownership. But recent numbers show that owning a home is still a sound financial move, especially as apartment rents continue to rise.
Simply put, the numbers show that while it’s becoming more costly to rent, it’s also becoming more affordable to own a home.
According to the most recent rent-vs.-buy analysis from Foreclosure Deals, the cost of renting an apartment across the United States has jumped 60 percent since 2008. And that’s just the start: Foreclosure Deals also predicted that this trend will continue in 2012, when the cost of renting will rise another 3 percent.
At the same time, Foreclosure Deals found that the median sales price of homes across the United States has fallen by 46 percent since 2008.
Consider the numbers that Foreclosure Deals found for Illinois. In 2008, the median rent in the state stood at $804 a month. In 2011, median rent in Illinois had risen to $1,400 a month.
While rents in Illinois are rising, the median housing price in Chicago continues to fall. According to the latest numbers from the Illinois Association of REALTORS®, the median sales price of a Chicago home in November stood at $160,000. That’s down 12.3 percent from the same month one year earlier, when the median sales price hit $182,500.
Of course, there are different benefits, aside from price, that comes with owning or renting. Renters have more freedom to move. Owners can create financial stability by building equity in their homes.
It’s not easy to say, though, that owners will spend more money than will renters. The latest numbers from Foreclosure Deals prove this. And, as Foreclosure Deals also predicts, the rise in rental rates doesn’t look to be a short-term trend.
| Discussion: No Comments »
Sears To Keep Chicago Stores Open
January 3rd, 2012 categories: Chicago News, Chicago Real Estate News, Economic Recovery
It’s never easy to see a long-time retailer suffer financially. Seeing the struggles of Sears, still one of the most important retailers in the country, has been downright painful.
But there is some good news regarding the retail giant: Of the store closings the company recently posted on its Web site, none are located in Chicago or Illinois.
GlobeSt.com reported that Sears, in late December, listed 79 of the 100 to 120 stores it plans to close. Not one of these stores is located in Illinois, and GlobeSt.com wonders whether the large tax break that the state recently approved for Sears had something to do with this.
Also in December, Gov. Pat Quinn signed a law to give Sears a tax cut of $150 million during a 10-year period. This move came after Sears threatened to move out of the state.
This hasn’t been a good year for Sears. GlobeSt.com reported that the retailer saw its comparable store sales fall 2.6 percent for the year and 5.2 percent since late October. The 100 to 120 stores that Sears closes should save the retailer about $170 million, according to the GlobeSt.com story.
It’s possible to argue the merits of giving companies such large tax breaks. It’s possible, too, to debate whether Sears’ recent tax cut played a role in its decision to not close any of its Illinois stores.
But it’s not possible to argue that Sears’ decision to spare Illinois and Chicago any store closings is a boon to the area. And, remember, anything that helps the local economy also helps the Chicago-area housing market.
Buyers are more likely to spend money if they feel more confident about the local economy. And confident buyers are essential to the health of the Chicago housing market.
So there’s one thing to agree on here: The fact that Sears is keeping its Chicago stores open is good news for everyone in the city.
| Discussion: No Comments »
