Archive for the 'Chicago Real Estate News' Category
The Relationship Between Unemployment And Home Values
March 26th, 2012 categories: Chicago Real Estate News
The housing market will not boom again until unemployment drops. People who aren’t working, after all, can’t afford to make the major investment that buying a single-family home or condominium represents.
That’s why anyone who’s rooting for a more robust recovery in the housing market had to have been cheered by the recent news that jobless claims across the country in mid-March fell to a four-year low.
According to a story in the Chicago Tribune, people made 14,000 claims for unemployment benefits in March. That puts the United States on pace for 351,000 new claims for unemployment benefits this year.
That comes out to a four-year low that the country previously reached in February.
Of course, the country still has a long way to go before unemployment falls to pre-recession levels. Yes, the 8.3 percent unemployment we’re seeing now is a three-year low. But there are still far too many people out of work.
And until these consumers return to the workforce, don’t expect the country’s housing market to recover at a quicker pace.
With spring on the way, we’ve already seen in Chicago home sales increase steadily the last several months. What we haven’t seen, though, are price increases. The median sales value of condominiums and single-family homes in Chicago, in fact, continue to fall each month.
That’s a trend that shows few signs of stopping. And until the unemployment numbers locally and across the nation fall even lower, don’t expect to see local home values rise.
This is still all about supply and demand. Housing prices won’t rise again until the large inventory of homes on the market – including the many that are in the middle of the foreclosure process – is reduced. It’s only when supply falls that prices will rise. Right now, there are simply too many homes available for sale. Consumers who think one residence is priced too high can move on to another home that fits in their price range.
And this is a situation that will remain in place until unemployment falls and more consumers feel confident enough to purchase a home.
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Expect Chicago Foreclosure Numbers To Keep Rising
March 23rd, 2012 categories: Chicago Real Estate News
Foreclosures remain a problem in Chicago. And until foreclosure condominiums and single-family homes here are bought up and removed from the market, don’t expect local home values to rise.
According to a feature story in the Chicago Sun-Times, the number of homes in the Chicago area receiving foreclosure filings rose 43.2 percent in February when compared to the same month one year earlier.
If you’re desperate for some good news, the number of foreclosure filings in the month did drop 8.5 percent when compared to January of this year.
Still, the large rise in year-over-year foreclosure filings is not news that anyone interested in selling a home wants to hear. Those ready to buy a condo or single-family home, though? That’s a different story.
Foreclosures drag down the average median sales price in an area. There’s a simple reason for this: Foreclosures are usually priced lower than non-distressed homes sold. Consumers, then, will often gravitate toward lower-priced foreclosures if they are in good condition and situated in a solid location.
This forces other homeowners to lower their asking prices. It’s the only way they can compete with comparable foreclosure properties located near them. This is bad news for sellers. Buyers, though, will have the continued opportunity to purchase more home for less money.
According to the Sun-Times story, 12,587 homes in the Chicago area received foreclosure filings in February. That represents one in every 302 area homes. In the same month last year, 8,788 homes received foreclosure filings.
The Sun-Times story quotes a spokesperson from online foreclosure source RealtyTrac who says that Chicago-area residents should expect to see a steady diet of year-over-year increases in local foreclosure filings. That’s because last year, banks slowed their foreclosure processes as they tried to sort through documentation problems related to the robo-signing foreclosure scandal.
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Employment Survey Offers Good News For Homeowners
March 15th, 2012 categories: Chicago Real Estate News
Homeowners looking for signs of a future rebound in the U.S. housing market received some good news from a March employment report. And though it’s far too early to offer any solid predictions, the report offers some hope that housing values might be ready to start rising again soon.
According to a story by Bloomberg, ADP Employer Services reported that companies in the United States added 216,000 employees to their payrolls in February. That gain follows a January in which companies added 173,000 workers.
This is good news for the economy. As the Bloomberg story says, employment gains help generate the wage increases that are necessary to keep U.S. household spending at higher levels. Household spending is an especially important figure because it accounts for about 70 percent of the U.S. economy.
In other words, if U.S. households are spending money, the U.S. economy is doing well. If they’re not? Then the economy slumps.
Homeowners, of course, want a strong economy. The stronger the economy, the more likely consumers are to make the large investments needed to purchase homes. And if consumers buy more homes, the supply of for-sale residential properties on the market will eventually shrink.
The law of supply and demand tells us what happens next: When supply falls, demand increases. When demand rises, so do prices.
This is what homeowners are waiting for, the day when housing values, both in Chicago and across the nation, finally start to rise again. It’s been a long time, and housing values in Chicago are still far below the peaks that they saw in the first half of 2006. But as the economic experts quoted in the Bloomberg story say, the numbers today are pointing toward broader employment gains.
In other words, expect companies to boost their hiring in the coming months. And if that happens, a housing recovery will at last be within view.
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Magazine Survey Offers More Proof: Chicago Is Good For Business
March 9th, 2012 categories: Chicago Info/News, Chicago Real Estate News, Economic Recovery, Housing Market
It’s easy to focus on the negatives when you’re living in Illinois. After all, the state — along with the city of Chicago — is known for its corruption. Our last two governors have been sentenced to jail time, Chicago aldermen are constantly caught up in corruption probes and nepotism seems to be the order of the day when it comes to hiring throughout the state.
But there is good news, too. And sometimes it’s too easy to overlook it.
For instance, Site Selection Magazine recently brought some good news to anyone who wants to see Illinois and Chicago shake their way out of their economic doldrums. According to the magazine, Chicago ranked second among metropolitan areas and Illinois seventh among states in the number of new and expanded corporate facilities that they saw in 2011.
This is good news. When new corporations come to the state or city, or when existing ones significantly expand their current facilities, that pumps new dollars into the local economy. And that’s one of the keys to putting people back to work.
It’s obvious how this helps the Chicago and state housing markets. When the economy is stronger and more people are working, residents are more likely to make the significant investment involved in purchasing a home. If you’re trying to sell a Chicago home, then — or even if you’re thinking of putting your home on the market in the next couple of years — you should be thrilled with Site Selection’s Chicago and Illinois rankings.
I’ve long maintained that Chicago offers a lot to corporations seeking new homes. We boast a great location near the center of the country, and we’re supported by a strong transportation system of rail and roads. At the same time, employees will enjoy living in Chicago. The city offers a great mix of restaurants, shops, theaters, parks and night life. And the housing stock here is strong, with corporate employees able to find everything from luxury mansions to quaint Chicago bungalows.
So next time the news of a convicted Chicago alderman gets you down, think back to Site Selection’s sky-high ranking of Chicago. our city is still strong, even in this current economic downturn. That’s good news for home sellers across the region.
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Walk Scores and Green Features Now Easier For Sellers To Advertise
March 5th, 2012 categories: Chicago Real Estate News
If you’re one of the many home buyers looking for homes that boast environmentally friendly features, Chicago Magazine recently had some good news for you: Chicago’s Multiple Listing Service is now showcasing the “green” amenities that come with the city’s for-sale properties.
According to the story, Midwest Real Estate Data, the Multiple Listing Service covering Chicago and Northern Illinois, recently added a Walk Score to its listings, a measure of how easy it is for residents to walk to such amenities as public transportation, grocery stores, libraries and restaurants.
That’s certainly green. But it’s only the start of the changes that Midwest Real Estate Data is adding to its listings. In late February, the listing service was scheduled to add new searchable fields that list homes’ green features and environmental designations, Chicago Magazine reported.
As the Chicago Magazine story says, this isn’t only a benefit for home buyers. The ability to list their homes’ green qualities also gives sellers an edge, especially in a Chicago housing market that remains so challenging.
By advertising their green features, sellers can attract environmentally conscious buyers. No one is claiming that low-VOC paints or dual-flush toilets will be the key factors in buyers’ decisions to purchase specific homes. But if buyers are considering two homes that are nearly identical in location, price and quality, those extra green features might persuade them to make an offer on the more environmentally friendly property.
The same can be said about the Walk Score. Many buyers today desire to live in a neighborhood that allows them to stow their cars and walk to restaurants, shops, parks, libraries and schools. Sellers, then, who can list high Walk Scores might attract a greater number of potential buyers to their homes.
Personally, I’m all in favor of anything that helps sellers better market their homes. And I know for a fact that many buyers in Chicago are actively seeking environmentally friendly homes. These changes to the local Multiple Listing Service, then, can only benefit the Chicago housing market.
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