Mario Greco

Housing Foreclosures Remain Too Common In Illinois

2012-05-25T22:37:01Z

Housing foreclosures continue to be a real problem in Illinois. And that’s unfortunate news for owners hoping to sell their Chicago condominiums and single-family homes; until foreclosures are moved off the market, home values in the Chicago area will not rise.

The latest bad news regarding local residential foreclosures comes from Chicago Tribune real estate writer Mary Ellen Podmolik. In a recent story in the Tribune, Podmolik covers the grim foreclosure news from the Mortgage Bankers Association.

According to the association’s latest numbers, nearly 7.5 percent of mortgage loans on one- to four-unit residential properties in the state were in some stage of the foreclosure process at the end of March of this year.

If that sounds like a high percentage, that’s because it is. According to the Mortgage Bankers Association, the national average for such residential properties being in the foreclosure process was a far lower 4.39 percent.

The Tribune story quotes Jay Brinkmann, chief economist of the Mortgage Bankers Association, who said that Illinois trails just Florida and New Jersey when it comes to the percentage of residential properties in foreclosure. The foreclosure rate in Illinois is, surprisingly, more than twice that of California’s. And remember, California is a state that was especially hard hit by the national recession.

Part of the problem — the biggest part, actually — is that it takes Illinois so long to close out its foreclosures. According to the Tribune story, Illinois is one of those states that have legal systems in place that prevent the timely resolution of foreclosure cases. Other states are able to work through their foreclosure backlogs more quickly. And in those states, housing prices are finally starting to rise again.

However, there are those who say that Illinois’ process, which requires foreclosures to go through the court system, provides greater protection for homeowners. Overall, there are 21 states that, like Illinois, require foreclosures to go through the court system. According to the Tribune story, 11 of these states have foreclosure rates that are higher than the national average.

There is a balancing act here. By making foreclosures go through the court system, Illinois is taking steps to protect the rights of homeowners. At the same time, by making sure that foreclosures remain in process for a longer period of time, the state is also making it more difficult for housing prices in Chicago and its other markets to rise.

New Office Tower Plans A Good Sign For Chicago Economy

2012-05-23T15:42:29Z

Want proof that Chicago’s economy is heading in the right direction? Just look at the plans for River Point, a 45-story building that might become the biggest new construction project in the city in five years.

Bloomberg recently reported on the plans for River Point, an office tower that, if current plans are followed, will cost $300 million for Hines, an international property investor, to build.

Hines plans to build River Point in downtown Chicago on the banks of the Chicago River at Lake Street. The project will boast 900,000 square feet of space and is due to be completed in 2016.

So far, River Point doesn’t have any specific tenants attached to it. But excitement is still building over the office tower, mainly because River Point will be the biggest new construction start in the city since 2007.

The plans for the tower come as the Chicago office market is slowly starting to rebound from the national economic slowdown. During the first quarter of this year, the downtown office vacancy rate fell to 15.1 percent, according to numbers from commercial brokerage Cushman & Wakefield. During the same quarter one year earlier, this rate stood at 16.4 percent.

Bloomberg quoted an official with Chicago’s Appraisal Research Counselors who said that there is more optimism this year regarding downtown Chicago. This same official said that real estate professionals are more optimistic about downtown Chicago than they are about the city’s suburban markets.

Those looking for better times in the Chicago housing market should be happy to read about River Point. New construction is a sign that real estate industry veterans believe that better times are on the way for Chicago’s economy. And that can only help homeowners who are hoping for housing prices to eventually start rising again.

Fannie Mae Report Offers Hope For Housing Industry

2012-05-22T23:38:37Z

It’s not been easy to see the positives in today’s housing market. But they are out there. For proof of this, there’s the recent outlook by mortgage-finance giant Fannie Mae.

Fannie Mae recently reported that the early months of 2012 have been good to the U.S. housing market, according to a recent story by the Wall Street Journal.

The report noted that consumers are more optimistic about the housing market today, and are more willing to put their homes on the market. As a result, the sales of single-family homes and condominiums across the United States should rise by slightly more than 7 percent in 2012, said Doug Duncan, the chief economist of Fannie Mae.

According to the Fannie Mae outlook, consumers are reporting that they believe this is a good time to sell their homes. That’s a big change. Sellers have been pessimistic about the housing market, both in Chicago and across the country, since late 2006. That’s when housing prices began to fall, and when sellers found that the housing market had transformed into one that strongly favors buyers.

The increase in optimism among home sellers may be a good sign. But the housing market still has a long way to go before it hits a more robust recovery.

As the Wall Street Journal story says, consumers are still reluctant to spend. That’s because many of their incomes haven’t risen — and in many cases have shrunk — since the United States fell into recession. At the same time, many consumers are still either unemployed or worried about losing their jobs. Consumers won’t make the financial commitment to own a home, and add monthly mortgage payments to their financial responsibilities, if they’re worried about their monthly incomes.

In other words, it all comes back to the strength of the U.S. economy. Until consumers see unemployment fall and their own incomes start to rise again, the housing market recovery will remain a sluggish one. And unfortunately for us, unemployment has been a particularly stubborn problem in this country.

Business Leaders Give Emanuel Strong Marks For First Year As Mayor

2012-05-21T22:43:05Z

It looks as if Chicago Mayor Rahm Emanuel is on his way to becoming a favorite of city business owners, at least if a recent survey by Crain’s Chicago Business is to be believed.

According to a recent story by Crain’s, about three out of every four respondents to the survey said that Emanuel has been either very positive for Chicago businesses or has been positive but “could do more.”

Crain’s reported that only 9 percent of respondents to its survey said that the new mayor has been bad for business during his first year in office.

This is good news for homeowners in Chicago. We want businesses to view the city as a friendly, progressive place. We want them to think of Chicago as a city that welcomes new businesses to its borders. The more businesses that call Chicago home, after all, the more attractive the city becomes. And the more attractive Chicago is, the greater the number of people who want to live here.

That greater demand, of course, can only prove positive for the Chicago housing market.

The majority of respondents say they support Emanuel’s efforts to reduce crime, balance the city’s budget, promote jobs, reform Chicago’s public schools and promote ethics reform.

Of course, this doesn’t mean that all is well in Chicago. Emanuel, after all, has only been in office for a year. The city still faces challenges when it comes to falling home values, pension issues, crime, traffic congestion and, of course, unemployment.

Other respondents said that it might not matter what Emaneul does if the state legislature in Springfield doesn’t, as one respondent told Crain’s, “get their act together.”

Still, the survey is an encouraging one for Chicago residents. Let’s just hope that businesses continue to view our new mayor as favorably as his time in office runs on.

Mortgage Interest Rates Help Boost Affordability Of Chicago Condos, Single-Family Homes

2012-05-18T23:24:20Z

Why is now a great time to buy a house? Housing prices are affordable in Chicago, even in the city’s top neighborhoods, places like Lincoln Square, Lakeview and Lincoln Park. Sellers are willing to negotiate. And there are plenty of homes from which to choose across the country.

But just as important, mortgage interest rates recently fell to yet another historic low point.

Bloomberg recently reported on this new milestone. According to the story, the average rate for a 30-year fixed-rate mortgage loan fell to 3.83 percent during the week ended May 10. This is the lowest this figure has been since Freddie Mac began tracking the number in 1971.

Borrowers hoping for a 15-year fixed-rate mortgage received good news, too. The average interest rate on a 15-year fixed-rate mortgage loan fell to 3.05 percent last week. That’s down from 3.07 percent the week earlier.

This means that it’s cheaper to finance a home. If you took out a $200,000 30-year fixed-rate mortgage loan with an interest rate of 6 percent, you’d face a monthly mortgage payment of $1,199.10.

But if you dropped that interest rate to 3.83 percent for the same loan, you’d have a monthly mortgage payment of just $935.33.

That’s a difference of $263.77 a month, or a little more than $3,165 a year.

So if you’re thinking about buying a home, now might be the time to act. It’s impossible to predict what mortgage interest rates will do in the coming weeks. But the rates today are outstanding ones, historically so.

NATO Summit To Make Chicago Center Of The World This May

2012-05-17T17:51:38Z

Chicago will be the center of the world late this weekend when leaders from across the globe gather in our city for the NATO Summit.

May 20 and 21 will be an exciting time for Chicago. It’s the first time that a U.S. city other than Washington has hosted a NATO summit. And the event will certainly receive its fair share of attention. According to the official Web site of the summit, about 2,000 journalists from across the world are expected to gather in Chicago to report on this historic event.

This is why I love living in Chicago. And it’s why so many homeowners do, too. Things happen in Chicago. It’s an important city not only in the United States but on the world stage. As a result, real estate here remains valuable, even during the tough economic times the city and country are now experiencing.

Of course, not everyone is happy about the upcoming NATO summit. Residents are worried about possible terrorism attacks. Others are worried about increased traffic, while others fret about road closings and increased difficulty in getting around the city.

I understand the concerns. People still have to work and move around Chicago as the summit meetings are taking place. But we have to remember: This is an historic event. It’s a great honor for the city to have been chosen to host these meetings.

Maybe veteran news reporter Walter Jacobson sums it up best: In a recent column on the website of CBS 2 News Jacobson says that it’s time for Chicago residents to stop complaining about the inconvenience caused by the NATO summit. As Jacobson rightly says, it’s OK for residents to wonder if this is a good use of taxpayer dollars or if protests surrounding the summit will turn ugly. But to worry about blocked streets and crowded roads seems a bit childish. After all, we’ll only be inconvenienced for three days.

But history? History will remember this event long after all those world leaders leave our city.

Survey: Homeownership Still A Dream For Many Renters

2012-05-15T00:27:06Z

A recent study by a major home builder shows that many renters still want to become homeowners. This is fascinating when you consider the state of the housing market today.

Home values, of course, continue to fall. Foreclosures are rising. Homeowners are struggling to sell their single-family homes and condominiums.

Still, many renters aspire to the traditional American dream of homeownership. If that holds true today, in what might be the worst housing market most of us have ever seen, it speaks well to the true power of what owning a home means in this country.

According to a recent story by the Wall Street Journal, a survey from PulteGroup, a large national home builder, found that among those renters who plan to purchase a home in the future 60 percent have “increased their intent” to do so from a year ago.

This means that a growing number of surveyed apartment dwellers are considering jumping into the housing market.

This is good news for owners planning to put their condominiums or single-family homes on the market. The more renters who enter the housing market, the greater the demand will be for for-sale residences. And when demand rises, so, finally, will housing prices.

Of course, the results of this study don’t change the fact that the housing market, even in such solid markets as Chicago, is still in a slump. It will take a long time for demand to rise enough to push up sluggish home values.

The PulteGroup survey even points out some of the current woes of the housing market. The survey, for instance, found that more than half of renters aren’t buying homes because they don’t have enough money to come up with a down payment. The survey found, too, that nearly 30 percent of renters believe that it is cheaper to rent than it is to buy, a fact that is preventing this group of renters from jumping into the housing market.

Finally, the survey found that more than 20 percent of renters were too worried about their employment status to consider investing in a home.

The good news, then, is that many renters do aspire to become homeowners. The bad news? It might take them a while to reach this dream.

Are Chicagoans Miserable? Forbes Thinks So

2012-05-04T17:59:25Z

You live in Chicago. When you wake up in the morning, do you look forward to your day? Are you ready to tackle the challenges that await? Or do you slam the snooze button and wish it was the weekend?

Forbes Magazine thinks that most of us Chicago residents fall into the latter category, waking up on the wrong side of the bed most days.

The magazine, which loves its lists, earlier this year ranked Chicago residents as the sixth most miserable in the country.

The reason for our grumpiness? According to Forbes, it’s the often brutal winters, the high property taxes and its terrible traffic. Forbes editors might have added that Chicagoans are struggling with a housing market in which home values continue to fall, but that hardly makes our city unique today.

Let’s look at the complaints listed by Forbes. Yes, our winters are usually harsh. But not last winter. In fact, last winter felt positively tropical. So we can scratch that one off the list, at least this season. The property taxes and the traffic, though, I’ll give Forbes. Traffic is especially a concern. Unless you’re taking the CTA or Metra, getting around town can be a true chore on busy weekdays.

But I think Forbes is still being too harsh on our city. Yes, Chicago can prove frustrating. But it can also be a fascinating place. We have great restaurants and live theater. We have tremendous green spaces and busy shopping districts. The night life is unrivaled here, and we have an abundance of professional sports teams from which to choose. We have as diverse an array of neighborhoods as any city across the globe.

In fact, it’s Chicago’s attractiveness that I think will eventually prove the savior our local housing market. People still want to live in Chicago. It is undoubtedly the top city in the Midwest. That bodes well for the future of the city’s housing market.

So, yes, Chicago isn’t perfect, as Forbes points out. But where would you rather live?

Home Sales Expected To Rise In 2012, But What About Housing Values?

2012-05-03T23:55:30Z

The latest report from the National Association of REALTORS®, the association’s Pending Home Sales Index, indicates that condominium and single-family home sales will rise in 2012 when compared to a year earlier.

That’s good news for home sellers. And the REALTORS® association trumpets the numbers in a press release that maintains that the housing market across the country is firmly in recovery mode.

But there’s a reason that this housing recovery – and sales are increasing in Chicago, too – feels so hollow. While the number of condominiums and single-family homes selling is on the rise, the prices of these sales are not.

In fact, the latest numbers from the Standard & Poor’s/Case-Shiller housing price index indicate that housing prices across the country are beginning to fall. The news is especially gloomy for Chicago, where in February, according to the Case-Shiller numbers, housing prices in the area fell to a 12-year low.

So that’s why it’s so hard for home sellers to get excited over the good news coming from the REALTOR® association’s Pending Home Sales Index. Yes, homes are selling in greater numbers. But owners who purchased their residences during the housing boom years – say, 2004 through 2006 – are taking big losses when they sell homes now. According to Case-Shiller, Chicago-area housing prices have fallen by more than 37 percent since September of 2006.

There are plenty of reasons why housing prices continue to fall. First, and most importantly, they simply rose too high too fast during the days of the housing boom. That kind of price growth was unsustainable. Prices simply couldn’t have kept rising at that rate. Today, the housing market is in a period of correction. Housing values are falling to a more reasonable level, something that feels particularly painful to homeowners who spent so much for their condos and single-family homes just six years ago.

Then there are the foreclosures glutting the housing market today, both in Chicago and across the country. These distressed properties, which generally saw at prices below market level, drag down the values of homes around them. This results in a steady decrease in home prices in entire neighborhoods.

The difficult truth is that Chicago and the rest of the nation have a long way to go before the fallout from the housing crisis clears. And even as home sales across the country rise, there’s no denying that this housing recovery hasn’t been an enjoyable one for many homeowners.

Case-Shiller Numbers Paint Picture Of A Still-Struggling Chicago Housing Market

2012-04-30T23:56:23Z

The most recent numbers from the Standard & Poor’s/Case-Shiller housing index paint a grim picture of the Chicago-area housing market. According to a story by Crain’s Chicago Business, the numbers show that housing prices in the Chicago area have fallen to a 12-year low.

That’s right: Housing values in the city in February fell to where they last stood in May of 2000, according to the Case-Shiller numbers.

The Case-Shiller report found that Chicago-area single-family home prices fell 2.5 percent in February when compared to January. Prices were down a high 6.9 percent this February compared to the same month one year earlier.

This news is especially grim if you purchased your Chicago-area single-family home or condominium in late 2006. According to Case-Shiller, Chicago-area housing prices have fallen 37.5 percent from where they stood in September of 2006, the peak of housing values in the city and suburbs.

The Crain’s story quotes Tom Feltner, vice president at Chicago’s Woodstock Institute, who says that this probably isn’t the bottom for the Chicago housing market, either. According to Feltner, we should expect to see prices for Chicago-area condos and single-family homes to continue to fall as an influx of foreclosure homes hits the market.

If you have to sell today, and you originally bought your residence in 2004, 2005 or 2006, the reality is that you’ll probably take a loss in the sale. Remember, buyers today don’t care what you paid for your residence six years ago. They only care about what your property’s market value is today.

If you absolutely must sell, then, it’s important to work with a skilled REALTOR® who knows your community. This agent can help you set the right price for your property, one that will generate the highest number of quality offers. It’s important, too, to listen to the advice of your REALTOR® when it comes to listing price. You can be stubborn and demand to list your residence for a higher price. The odds are good, though, that buyers will simply ignore your property and move on to those residences that are priced properly according to today’s market.