Housing Prices Tumble Again In Chicago
December 30th, 2011 categories: Chicago Real Estate News
It was news that no Chicago home seller wanted to hear: Home sale prices in Chicago continued to fall this November.
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 November of 2010, when the median sales price was at $182,500.
The November numbers continue a long trend in Chicago: Home prices here have slid since 2006, when the value of single-family homes and condominiums reached their height.
In better news, the number of home sales in Chicago did increase this November. According to the REALTORS® association, single-family home and condominium sales totaled 1,377 in November. That’s up a solid 20.4 percent from the 1,144 homes that were sold in the same month one year earlier.
Chicago wasn’t alone in Illinois in seeing home sales increase in November. A total of 52 percent of Illinois counties showed year-over-year sales increases during the month. Only 41 percent, though, showed year-over-year increases in their median sales price. The statewide median sales price stood at $128,500 in November, down 1.1 percent from the same month in 2010, when the median sales price was $145,000.
The sales-price numbers shouldn’t surprise Chicago home sellers. They’ve been battling falling housing prices now for the better part of five years. The high number of housing foreclosures in Chicago aren’t helping; foreclosures lower the sales prices of all homes in an area. Buyers simply won’t pay $30,000 more to buy a home when they can purchase a similar house in the neighborhood that’s in the foreclosure process for a much lower price tag.
There are few signs today that the media sales prices of Chicago homes will rise any time soon. This means that it’s more important for sellers to work with skilled REALTORS® who can help them set the right price for their residences, the price that will attract the most offers without leaving owners in a financial hole.
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Even With Falling Housing Prices, Chicago Remains Unaffordable To Many
December 28th, 2011 categories: Chicago Real Estate News
With housing prices continuing to fall in Chicago, you’d think the city would rank high on any list that measures the affordability of homes.
But you’d be wrong.
According to a feature in the Chicago Tribune, the Chicago market actually ranked as the 49th most expensive area in the country for homeowners. According to the story, buyers in Chicago would need a yearly income of $57,123 to afford a home at the city’s median price of $198,000.
The city’s affordability actually has gone up a bit. In 2009, when the median sales price of a home in Chicago stood at $210,000, the city ranked as the 40th most expensive market in the nation.
Don’t think, though, that it’s any cheaper to rent in Chicago. The Tribune story rightly points out that apartment rents in the city have soared, too. In fact, many renters have struggled in recent months to find apartments in Chicago that they can afford.
According to the Tribune, the fair market monthly rent for a one-bedroom apartment in Chicago is $904. That figure rises to $1,016 for a two-bedroom apartment.
It’s easy to forget that in all of the talk of falling home prices, Chicago’s residential real estate still isn’t inexpensive. It’s not easy for many city residents to afford to purchase a single-family home or condo even outside of the area’s trendier neighborhoods.
As the Tribune story says, falling housing prices aren’t enough to address the affordability problem in the Chicago market. There are simply too many areas — and the Chicago market in the Center for Housing Policy study that the Tribune cites for its numbers includes high-end suburbs such as Winnetka — in Chicago and its suburbs that are too expensive for the majority of local residents.
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Don’t Let Bad Press Scare You Away From A Low-Cost Mortgage Loan
December 27th, 2011 categories: Chicago Real Estate News
Mortgage interest rates are still at historic lows. Yet many potential home buyers are shying away from applying for mortgage loans.
Why? At least one prominent housing industry writer is pointing to misinformation.
Specifically, too many potential home buyers mistakenly think that they won’t be able to come up with a large enough down payment to secure a mortgage loan. Others worry that their credit scores won’t be high enough to convince a lender to loan them mortgage dollars.
In a recent column in the Daily Herald, writer Ken Harney says that these largely groundless fears might even be preventing a more robust recovery in the nation’s housing market.
Harney spoke with many in the mortgage-lending business about the misinformation swirling around the lending world, and how difficult it makes it to do business in the field today. One lender told Harney that potential borrowers aren’t aware of what’s possible today when it comes to borrowing money to finance a home. Because of this, they are missing out on historically low interest rates.
For instance, consider the down payment issue. Many borrowers mistakenly think that they’ll have to come up with a down payment of 20 percent of a home’s purchase price to qualify for a home loan. This isn’t true. FHA-insured loans come with down payment requirements of 3-and-a-half percent of a home’s purchase price for many borrowers. Lenders offering conventional loans are often asking for far less than 20 percent down payments, too.
Home buyers today can save hundreds of dollars a month by taking out a 30-year fixed-rate or 15-year fixed-rate mortgage loan at today’s low interest rates. This makes buying a home more affordable than it has been in more than a decade.
Don’t let the bad press and misinformation fool you. It is possible to qualify for a mortgage loan today. And doing so will cost you less money every month. Don’t miss out on this opportunity.
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Housing Foreclosures Rise Again In The Chicago Area
December 22nd, 2011 categories: Chicago Info/News, Economic Recovery, For Homeowners, For Sellers, Foreclosures, Housing Market
The number of housing foreclosures fell throughout the United States. But locally in the Chicago area, housing foreclosures actually rose.
According to a recent feature story in the Chicago Tribune, the number of homes in the foreclosure process rose 20 percent in November in Cook County when compared to one month earlier. The Tribune said that much of this increase stemmed from a jump of 57 percent in the number of homes in the county that were sent to court-ordered auctions.
Citing data from online foreclosure company RealtyTrac, the Tribune reported that foreclosure filings were reported on more than 224,000 properties across the United States in November. That’s a drop of 3 percent from October.
No matter how you look at the numbers there are too many housing foreclosures in Chicago and the United States. This is unfortunate because foreclosure has such a devastating effect on families.
If you’re struggling to pay your mortgage bills each month, call your mortgage lender immediately. The sooner you call your lender, the better your chances of working out a new payment arrangement, a reduction in your mortgage loan’s interest rate or some other way to avoid losing your home through foreclosure.
I understand that this is no easy thing, calling your mortgage lender and explaining that you’re struggling to pay your monthly housing bills. But lenders will often work with you to find some solution to your mortgage woes.
Foreclosures remain the number-one deterrent to a housing market rebound, both in Chicago and across the nation. Foreclosures make it more difficult for sellers to get the prices they want for their homes. Buyers would rather pay $50,000 less for a similar home down the street that’s gone through the foreclosure process.
If you don’t want to become the latest foreclosure statistic, call your lender. Ignoring your mortgage problems won’t help them go away.
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Some Tips For Chicagoans Relying On Gifts To Cover Their Down Payments
December 21st, 2011 categories: FSBO's, For Buyers, For Homeowners
The days of mortgage lenders offering home loans with no down payment requirements are long gone. Today, buyers financing their homes must come up with down payments.
It’s little surprise, then, that many buyers — especially first-time buyers — are getting help from family members or friends to cover their down payment requirements.
A story by the Wall Street Journal reported that 27 percent of first-time buyers in 2010 received a financial gift from a friend or family member to use toward their down payments. That figure is up from 22 percent in 2009 and 23 percent in 2005, according to numbers from the National Association of REALTORS®.
The Wall Street Journal story quoted a mortgage adviser from Chicago who explained that a 10 percent down payment on a modest Chicago condominium or single-family home could come to $30,000 to $40,000. That’s a lot of money for first-time home buyers to scrape together.
Of course, there are options for buyers seeking lower down payments. Buyers with solid credit can qualify for FHA mortgage loans that come with down payment requirements of just 3.5 percent.
Those working with traditional mortgage loans, though, will often have to make a down payment of 10 percent to 20 percent of a home’s purchase price. Again, in big cities such as Chicago, that’s hardly a small sum of money.
The Wall Street Journal story provided some good advice for buyers who are relying partly on gifts to finance their down payment. Freddie Mac requires buyers to provide at closing funds equal to at least 5 percent of the home’s purchase price if the loan-to-value ratio is greater than 80 percent and a relative or friend provides a gift to help with the cost of the down payment.
The Journal story also says that buyers must properly document their down payment gifts. For instance, if a buyer’s bank account suddenly jumps from $10,000 to $15,000 thanks to a gift from a family member, the loan officer handling the loan will want to see a gift letter. This letter should provide the giver’s name, address and telephone number. The Journal also reported that the letter should spell out the relationship between the buyer and the person providing the gift.
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