As if that wasn’t bad enough, the 27-percent drop in housing sales from June to July represents the biggest one-month housing drop ever.

Now comes the news that several economists are worried that the economy, fueled in part by the struggling housing market, is headed for a double-dip recession. The Wall Street Journal recently covered this issue, quoting economist Robert Shiller, a professor of economics at Yale University, as saying that a second economic dip may be imminent.

Shiller told the Journal that he thought the odds of a double-dip recession were at 50 percent. He said that the third quarter of 2010 might historically be viewed as the time when the second dip hit.

What will a double-dip recession mean? For one thing, it could bring more job losses. You can also expect housing sales in Chicago and across the nation to fall again, along, perhaps, with housing prices.

Of course, there’s no guarantee that Shiller is right. There might not be any second dip in our recession. If that’s the case, then the slow recovery we’ve been seeing might actually pick up some momentum. That would be a welcome sight.

Shiller pointed to high unemployment – the national unemployment rate remained above 9 percent at the end of August – as the biggest problem of the economy right now. He suggested an interesting idea: He wants the federal government to create new jobs. He specifically mentioned the creation of teachers’ aides in every classroom in the country. This, Shiller said, would add millions of jobs while helping children.

These are trying times in the country. No one’s happy that home sales fell so steeply in July. No one’s happy either that the unemployment rate refuses to budge. The only glimmer of good news is that Chicago, despite its financial problems, remains a strong city and housing market. Yes, housing sales are down here. Unemployment is up here, as it is across most of the country. But Chicago is a vibrant city, one powered by diverse industries and neighborhoods that still remain destination points for home buyers. I believe that Chicago is one of those cities that will benefit the most once the economy’s recovery takes full root.

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Chicago Mayor Richard Daley recently warned city residents of so-called loan modification companies that are actually in business to rip people off rather than help them nab a more affordable monthly mortgage payment.

According to the mayor’s statement, there are plenty of legitimate, ethical companies out there to help homeowners modify their loans. Many of them are non-profit agencies that are working with the city. Unfortunately, there are many companies out there, too, who entered the loan-modification business as a way to make some quick bucks. These companies often have little to no experience with the mortgage-lending industry.

Daley warns Chicago homeowners not to work with any company that asks for an upfront fee. That’s the surest sign of a scam artist. You always want to work a loan-modification company that only accepts its payment after it has secured a lower mortgage payment for you.

Daley also says that homeowners shouldn’t work with loan-modification companies that promise or guarantee success. There’s a good reason for this: There are no guarantees when it comes to modifying a mortgage loan to a lower monthly amount. Mortgage lenders and banks aren’t required to modify any of their clients’ mortgage loans. A company that guarantees success is not telling you the truth.

Finally, Daley says that Chicago homeowners should never work with modification firms that advise them to stop making their mortgage payments. Homeowners who do this will seriously damage their credit scores. Missing home loan payments can also make it more difficult for homeowners to modify their mortgage loans.

The best way to seek a loan modification is actually to do it yourself. Call your mortgage lender if you are struggling to make your payments each month. Most lenders today are participating in the federal government’s Home Affordable Modification Program. It doesn’t cost a thing to call your mortgage lender. And if your lender approves your request for a modification, it won’t cost you a thing to move to a lower loan payment, either.

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But all of these factors, which make selling a condominium or single-family home today so challenging, make this a great time to buy a home in Chicago.

The Illinois Association of REALTORS® reported that the median sales price of Chicago homes stood at $230,000 in the second quarter of this year. That’s an extremely affordable price for Chicago. And by taking out an FHA loan, buyers here only have to come up with a down payment of 3.5 percent of a home’s purchase price.

At the same time, inventory levels are high. Buyers have a lot from which to choose when it comes to buying condominiums or single-family homes in some of the city’s top neighborhoods, like Lincoln Park, Ravenswood, Lakeview, Lincoln Square and Streeterville.

Then there’s the news regarding mortgage interest rates. According to the latest numbers from Freddie Mac, the average interest rate on a 30-year fixed-rate mortgage loan stood at an amazing 4.42 percent for the week ended Aug. 19. The rate for the average 15-year fixed-rate loan hit 3.90 percent. Both rates were down from the previous week, and down from the same period one year earlier. This means that buyers today can get more home for their dollars.

Even the high number of foreclosures in Chicago and the rest of the country can mean good news for buyers. When banks and other lending institutions have to re-sell their foreclosures, they usually do so at a greatly reduced price. Again, this gives buyers the opportunity to purchase homes for fewer dollars. Some buyers might purchase a foreclosure to be able to get into a neighborhood that they otherwise could not have afforded.

No one’s arguing that this is a difficult time in which to sell a home. But for first-time buyers and any others who don’t have to first sell a residence, this is a great time to buy.

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The news on home prices is especially encouraging. Chicago home sellers have been waiting for median home values in the city to stop falling. The second-quarter numbers show that they may have.

According to the association, the city of Chicago’s median home price in the second quarter stood at $230,000. That’s the same median value that the city saw in the second quarter of 2009. That may not seem like news worth celebrating. After all, home values overall haven’t risen in the city of Chicago. But they didn’t fall, either. In today’s dismal economy, it counts as good news when home values don’t fall.

The news was good, too, when it came to the sale of Chicago condominiums and single-family homes. According to the association’s numbers, the sales of condominiums and single-family homes rose 32.8 percent in the second quarter when compared to the same period one year earlier. The city saw 6,567 home sales in the second quarter this year, compared to 4,945 in the second quarter of 2009.

This, too, is obvious good news. Chicago is a strong housing market. But it did suffer during the Great Recession, as did the residential markets of most major cities. My hope is that the second-quarter numbers are a sign of a positive housing trend in the city.

And why not? Despite the economic slump, Chicago is still a great city in which to buy a home. There’s plenty to do here, for buyers of all ages, whether they’re empty nesters or young married couples or single buyers.

What will the next set of housing statistics from the REALTORS® association bring? That’s impossible to predict. Here’s hoping, though, that the second-quarter numbers are more than just a blip.

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Being underwater is as negative as it sounds. It means you owe more on your mortgage loan than what your residence is worth. A lot of buyers who purchased at the height of the residential real estate boom, 2004 and 2005, for example, are underwater today. That’s because they paid top dollar for their homes, only to see their residences’ values drop steadily ever since.

In the Chicago area, nearly 29 percent of all home mortgage loans were underwater in the second quarter of the year, according to a feature story on ChicagoBreakingBusiness.com.

That’s a high number, but it actually represents a slight improvement from the first quarter of the year. In that quarter, according to real estate Web site Zillow.com, 31.8 percent of mortgage loans in the Chicago area were underwater.

No homeowner wants to be underwater. We all view housing as a type of investment. We expect the value of our homes to grow after we purchase them. We’ve all heard about what a great investment residential real estate is.

Being underwater, though, isn’t a terrible thing if you aren’t planning on selling your Chicago condo or single-family home in the near future. If you don’t have to sell for seven to 10 years, the odds are good, though not guaranteed, that your home’s value will have risen again. Historically, residential real estate has always appreciated over long periods of time.

If you do have to sell your house now, though, and you are underwater? In today’s housing market, you will have to take a loss. By working with a skilled REALTOR® who knows your neighborhood, though, you can at least minimize that loss. A good REALTOR® will help you nab the best possible asking price for your home.

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Today, though, as housing values fall, the rent vs. buy question has popped up again.

It’s not difficult to understand why. The median value of a home in Chicago stood at $230,000 in the second quarter of 2010, according to the latest numbers from the National Association of REALTORS®. That’s even with the median sales price of the second quarter of 2009, but still a big drop-off from where housing values stood in 2004 and 2005 in the residential boom years.

Today, in fact, home values have fallen so far that many homeowners owe more on their mortgage loans than what their homes are worth. This condition, known as being underwater, is now impacting about 25 percent of homeowners.

Still, even with these troubling numbers, I believe that it makes more sense financially to buy than it does to rent.

And here’s why: Today’s real estate market is an anomaly. It’s a correction from the days in which housing values rose too high too quickly. Historically, homes have appreciated at steady rates over longer periods of time. This means that if you buy a house today, 10 years from now it should be worth significantly more than what you paid for it.

The key to buying a home is to remember that residential real estate was never meant as a way to make quick money. There have been very few markets over the years in which buyers have been able to purchase a home one month, renovate it and then sell It six months later for twice the price.

To make money off residential real estate today, you’ll have to be patient. But history shows that patience pays off when it comes to investing in residential real estate.

Don’t forget, too, that now is a great time to buy a Chicago condominium or single-family home. Homes in even the best Chicago neighborhoods, places like Lakeview, Lincoln Park, Wicker Park and Lincoln Square, can be found at great prices. Buyers can purchase more home today for their dollars. They’ll be in good shape once housing prices start rising again.

Renting does make sense for some people: Those who only plan on living in an area for five years or less, for instance, would do well to rent. People with low credit scores should rent while they take steps to repair their credit.

For people who plan to stay in one place for a long time, though, buying, in my opinion, is still the way to go.

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It’s fortunate, then, that Chicago offers plenty of places for college students to call home. The Chicago Tribune recently wrote a feature story about the many place in which Chicago university students can live while taking their classes.

The story specifically focuses on an exciting new development for students at Chicago’s Roosevelt University. According to the feature, the unnamed building, which is under construction now at 425 S. Wabash Ave., will feature a 32-story vertical campus that will serve as home to a food court, fitness center, classrooms and labs. The top 17 floors will be home to a 600-bed residence hall. The living units are composed mostly of two-bedroom and four-bedroom suites.

This building is just one of the many options college students in Chicago have. Many of the universities in downtown Chicago, including DePaul, Robert Morris and Columbia offer residence towers for their students. Some of the buildings reserved for students are open to those attending just one institution while many are open to all students.

Of course, students don’t have to live in any of these residence halls. They can live in condos, two-flats or apartment buildings near their schools. One of the advantages of attending school in a world-class city like Chicago is the myriad of housing opportunities available to students. The parents of some students, for instance, will buy condos in downtown high-rises for their children to use while studying. After their children graduate, they’ll either hold onto the units or sell them.

The key is for college students to select the student housing options that are right for them, whether that means living in a university-provided residence hall or in an off-campus condo. Both options come with pluses and negatives. University residences can help keep students connected to their university, and are conveniently located. Off-campus private housing allows students to experience more of the neighborhoods surrounding their campus.

Choice is good, though. And in Chicago, one thing students don’t lack is housing choice.

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Green building is hot right now. Developers of new housing projects tout their buildings’ green features such as low-flow plumbing, bamboo floors, geothermal heating and the use of recycled building materials.

Here’s the question, though: Is green building here to stay? Or is it merely today’s trendy real estate marketing tool?

Mary Umberger, a real estate columnist with the Chicago Tribune, recently covered this. In her opinion? Green building is more than just hype. It’s here to stay.

That’s good news. Green building isn’t just environmentally friendly. It’s also good construction. The green-built homes in Chicago are some of the best-constructed residences that I’ve seen.

In her story, Umberger cited a Chicago Tribune/WGN poll that showed that two-thirds of residents in the Chicago area have changed their daily routines to become more environmentally friendly. She also points to a report from a trade magazine that showed that the total value of U.S. green-building projects will increase from $71 billion this year to $173 billion by 2015.

That’s not to say, though, that consumers will buy one home over another just because of its green features. Buyers still care most about price, location and quality of construction. Green building, though, can make a difference: If two homes in the same neighborhood boast the same basic price and amenities, environmentally conscious buyers are more likely to choose the green home.

For builders and developers, this is important. These professionals recognize that green building is good for the planet. But they also need it to be good for their wallets. If green building proves to be profitable, Chicago-area developers and builders will continue to embrace environmentally sound construction processes.

That would be good news for Chicago home buyers. Not only are green-built homes examples of top-quality construction, they’re also less expensive to own. Energy efficient appliances save homeowners a significant amount of money over the years. In today’s tough economy, all savings are important.

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Lawrence Yun, the association’s chief economist, said that he expects lower home sales in the next few months. The culprit? The economy.

Yun pointed to job growth as being the key to increasing home sales. If the country starts adding jobs, home sales should increase. If the job market doesn’t improve, home sales will remain down.

Yun also pointed to the expiration of the federal government’s move-up and first-time home buyer tax credits as a reason for the upcoming months of slow sales. These credits – the first-time buyers credit gave buyers a tax credit of up to $8,000, while the move-up buyers credit gave them one up to $6,500 – persuaded many consumers to purchase homes. Unfortunately, they expired at midnight on April 30. Since then, pending home sales have dropped on a consistent basis.

Yun predicted that housing sales activity would pick up late in the year. That probably sounds a bit depressing to many. After all, when the housing market is strong it gives a significant boost to the entire economy. And today’s economy needs all the help it can get. Unemployment is still too high. Foreclosures are barely slowing. Home values are falling. People are still struggling out there.

A boost in home sales would have been nice. Unfortunately, it looks to be something that won’t happen any time soon.

Yun did have some good news, though. He mentioned that interest rates should remain near historic lows. This will allow buyers to continue purchasing more home for less money. Lower interest rates can shave the cost of a mortgage loan by hundreds of dollars every month. This gives buyers more spending power.

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A recent Associated Press story highlighted this grim news. According to the story, the Chicago-Joliet-Naperville area lost 76,000 jobs from June of 2009 to June of 2010. That job-loss figure led the country.

At the same time, the number of Chicago housing foreclosures rose. Foreclosure activity in the Chicago area rose 23 percent in the first half of 2010 when compared to the same six months in 2009, according to RealtyTrac. That comes to 78,000 properties that have received foreclosure notices in the first half of this year. If you think that seems like a high number, you’re right. The Chicago area ranked third in the country for housing foreclosures.

There is help for Chicago homeowners facing foreclosure. Unfortunately, this help isn’t working fast enough to stem the tide of foreclosures in the area. This, of course, is doing no favors to the local housing market.

If you are one of the many Chicagoans struggling to pay their mortgage payments each month, do the smart thing: Call your mortgage lender as soon as your mortgage payments become a burden. Your mortgage lender does not want to evict you. It doesn’t want to have to sell your house, especially in a housing market as challenging as this one.

Your mortgage lender might be able to restructure the terms of your mortgage loan, making your monthly payments smaller. It might lower your interest rate, give you a short break from paying your loan or forgive a portion of your principal balance. All of these moves can help keep you in your house.

If you don’t do anything, though, you’ll eventually fall into foreclosure. And no one wants that. Foreclosure is devastating to families. It’s also devastating on housing markets.

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