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Rental prices rising in Chicago

filed under: Buyers, Chicago home prices, South Loop posted on August 7th, 2011

HIKING THE RENT: This South Loop 2-bedroom at

HIKING THE RENT: This South Loop 2-bedroom at 1620 S Michigan is listed for rent at $1695 per month. The same unit rented for $100 less last summer. Would it be cheaper to buy? In this case, yes! Similar units are selling for about $160,000 -- which makes owning cheaper than renting here.

If super-low home prices and interest rates aren’t enough to persuade you to make the jump from renting to owning, maybe this will: Rents are climbing throughout the Chicago area.

The average rent for a Chicago one-bedroom apartment has increased nearly 9% in 2011 while two-bedroom rents have jumped more than 5%, according to ApartmentRatings.com, a website where renters exchange information about apartments. Meanwhile, an article in today’s Chicago Tribune reported that “a stew of factors, including the foreclosure rate, uncertainty about jobs and sheer demographics, have driven rental demand (and rents) to levels not seen in years.”

The average asking price of a Chicago one-bedroom apartment is now $1,236; a two-bedroom is $1,736; and a three-bedroom is $2,204. According to the Tribune, some of the most expensive neighborhoods were those closest to downtown: the West Loop, with an average rental price of $1,991; Streeterville ($1,981); River West ($1,954); the Loop ($1,935); and the South Loop ($1,875).

“You see it all across the board,” said David Vivero, chief executive of RentJuice, a company that provides services for landlords in Chicago, New York, Miami and Boston. “You have prices circling up. We’re seeing fewer incentives being given. Fewer brokerages are working (to market) some of the high-rises because they’re filling up more. The supply hasn’t moved as much as demand has increased,” he told the Tribune.

I sometimes see prospective buyers wavering about whether to buy a home or continue to rent. Buyers certainly need to be sure that their jobs are stable, that they have some savings and that they plan to stay in Chicago for a good while (I recommend five years, at a minimum.) But with home prices now at a 10-year low, I can certainly find you a condo to buy that will cost the same — or less — than it would to rent a similar apartment.

Written by Sue Fox // Please leave a comment.

New construction in Lincoln Square and North Center: Condos for under $400,000

filed under: Buyers, Developments, Lincoln Square, Market conditions, North Center posted on August 1st, 2011

NEW, BUT SHORT

NEARLY NEW, BUT STILL SHORT: This Lincoln Square condo, located at 2472 W Foster Ave . #2, is listed at just $194,000. It is almost new, but already a short sale. It originally sold in late 2007 for $284,900.

With financing for development so tight, it’s gotten quite hard to find new condos under construction throughout Chicago’s North side. What you can find, however, are hundreds of condos built in the last five years — where the value has fallen so far from what the original owner paid that many of them are nearing or already in foreclosure.

That means there are plenty of almost new condos in almost new buildings, many of them being sold at bargain prices. In Lincoln Square and North Center, two popular areas that include Ravenswood and Roscoe Village, there are more than 50 condos with at least 2-bedrooms that fit this description — all for sale at prices under $400,000.

At the lower end of the scale you have distressed (meaning financially troubled, not necessarily physically damaged) properties like 2472 W Foster Ave. #206, a 2-bedroom, 2-bath unit with garage parking for only $194,000. This empty unit is a short sale, which requires bank approval (and patience on the part of a buyer). The 1300-square-foot condo boasts limestone baths and a balcony, and it is located in a 5-year-old building where similar units sold for $280,000 to $335,000 in late 2006 and early 2007.

Meanwhile, there are several properties for sale in the $300,000 range with considerably more space. Consider 4809 N California Ave. #2W, also in Lincoln Square, a 3-bedroom, 2-bath with Brazilian cherry floors, a master bath with a steam shower and jacuzzi tub, and a large deck. Parking is $20,000 extra. Or 4313 N Western Ave. #2 in North Center, a 3-bedroom, 2-bath unit with parking. It features cherry cabinets and granite counters, stone baths and hardwood floors, located in an intimate 3-unit building built in 2008.

At the upper end of the range, there’s a 3-bedroom, 2-bath Roscoe Village condo with two parking spaces, a large deck and a balcony. Located at 2332 W Belmont Ave. #2, this is a 1700-square-feet unit featuring a separate dining room, gourmet kitchen, limestone baths and custom closets. It is priced at $398,500.

So if you’re looking for new construction in this age of scant construction, don’t despair. There are some wonderful, slightly used condos out there, available for much less than the first owner paid.

Roscoe Village, Chicago condo for $398,500.

A HAVEN IN ROSCOE VILLAGE: This lovely 400-square-foot deck, along with two parking spaces, comes with a 3-bedroom condo at 2332 W Belmont Ave. #2. Now priced at $398,500, the same unit sold new for $411,500 in 2007.

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The sweet spot for Bucktown condos

filed under: Bucktown, Buyers, Chicago home prices posted on July 27th, 2011

A TRUE LOFT IN BUCKTOWN:

A TRUE LOFT IN BUCKTOWN: This two-level loft in the heart of Bucktown illustrates why it makes sense to price your condo in the range where buyers are buying. Originally listed for $399,000 in March 2010, it sat on the market for eight months. By the following spring, the sellers had re-listed this 2-bedroom, 2-bath condo with garage parking at $349,900 -- the sweet spot for Bucktown condos. It sold within a month, and closed in April for $321,000.

These days, selling a Chicago condo is almost all about pricing. I was doing a search recently for some Bucktown buyers when I came across some interesting data for the neighborhood, suggesting that there is a sweet spot for Bucktown (and Wicker Park) condo pricing: between $300,000 and $350,000.

Over the past year, more condos in West Town (the MLS area that includes Bucktown, Wicker Park, and River West)  — 137 of them, to be exact — sold in this price range than at any other price point. Another 109 condos sold at prices between $350,000 and $400,000.

Since a total of 691 condos were sold here over the last 12 months, that means more than a third of them went for somewhere between $300,000 and $400,000.Why does this matter? Every property is different, of course, but the price distribution gives you a pretty good idea of the competition. In a relatively cool market, it helps to know that the hottest action is happening in the low $300s. If you want to sell in Bucktown or Wicker Park, it may make sense to price your condo at $349,000 and aim for a quick sale rather than starting at $400,000 and waiting for buyers to materialize.

Buyers are scarce these days, especially for big-ticket items. For example, only 80 condos sold for more than $500,000 in the past year in all of West Town. It makes sense; these days you can find a single-family house for that price in many desirable  Chicago neighborhoods.

Written by Sue Fox // Please leave a comment.

Chicago home prices & sales fall in June

filed under: Buyers, Chicago home prices, Chicago home sales, Market conditions posted on July 24th, 2011

THE

THE MEDIAN PRICE: What can you get for $207,000, the median home price in Chicago? Try this 2-bedroom, 2-bath condo located on Winthrop Ave. in Uptown. Featuring a large master suite, deeded parking and a huge outdoor deck, it sold several weeks ago after three years on and off the market (and several price reductions.)

The Chicago real estate market continues to struggle. In June, according to the latest data from the Illinois Assn. of Realtors, both the median price and the number of home sales fell considerably compared with the previous year.

This is more good news for Chicago buyers, and equally bad news for sellers. The median price for single-family homes and condominiums in June was $207,000, down 11.6% compared to $234,250 in June 2010.

And far fewer homes traded hands this June, primarily because last year we were still seeing the helpful effects of the federal tax credits for buyers, which inflated home sales. Home sales totaled 1,841 in June 2011, a dramatic 27.1% drop from the 2,526 homes sold during the same month last year.

Home prices and sales were also down statewide. Illinois home prices sank 11.7%, on par with Chicago’s numbers. But home sales across the state declined less than they did in the urban areas, dropping 16.3% over the past year.

The high number of foreclosures in Chicago — our city is now ranked #1 nationwide in foreclosed properties — continues to muddle the hopes of a local real estate recovery. “In the coming months, we will be observing the economic pressures which will likely lead to an increase in distressed assets to the market,” predicted Mabel Guzman, president of the Chicago Association of Realtors.

If you are considering buying a home, the forecast appears sunny for the foreseeable future. Rates on 30-year fixed mortgages are now hovering at 4.5% in the Chicago area, prices are back at levels last seen a decade ago, and there are plenty of foreclosures keeping a lid on price increases. Buying a home is now just as affordable as renting in Chicago, plus it gives you a significant tax break and the chance to build equity rather than just forking over thousands of dollars to your landlord every year.

Written by Sue Fox // Please leave a comment.

The return of the Chicago two-flat

filed under: Buyers, Edgewater, Lincoln Square, North Center, Sellers, Two-flats, Uptown posted on July 19th, 2011

A SENSIBLE INVESTMENT:

A SOLID INVESTMENT: This Chicago two-flat, located at 1300 W Norwood St. in Edgewater, sold in April for $370,500 -- a price that makes sense for a buyer hoping to rent out one or both units. It was originally priced at $600,000.

Chicago two-flats are back… as a good investment option, that is. For much of the last decade, their price had climbed so high as to no longer make sense for many owners. As I had warned in previous posts, it is ludicrous to pay $500,000 or $600,000 (or more) for a two-flat when each unit will only rent for $1,200 or $1,300 a month.

And once the recession hit, this obvious math finally caught up with many two-flat owners. Suddenly people were scrambling to unload these properties, and the price of multi-unit buildings plunged. Now that they are priced more realistically — meaning that if an owner were to rent out both units, it would come close to covering the mortgage and other expenses — Chicago two-flats are suddenly in demand once more.

In Edgewater, for instance, a classic red brick two-flat located at 1300 W Norwood Street recently sold for $370,500. The math here makes sense: Assuming the buyer put down 10% and got a 30-year loan at a 4.5% interest rate, the monthly payment (including property taxes and insurance) would be about $2,525. Each unit has 3 bedrooms and a bath, which in Edgewater would rent for around $1,400 per month, giving the owner $2,800 in income. That’s enough to cover the expenses… which indicates that this purchase is a sound investment. (And in my example, the buyer didn’t even put down 20 percent! The numbers would work even better if he/she had.)

What wouldn’t make any sense at all is paying $600,000 for the same property, which is where it was originally priced in January 2010. The seller had to reduce the price seven times over the next year, finally settling at $429,000. Still, this two-flat closed for nearly $60,000 less when it sold in April 2011.

In Chicago, people sometimes buy two-flats with the intention of converting them into a single-family house. But even then, the property must be obtained for a reasonable price to make financial sense. These days, dozens of affordable two-flats can be found in appealing neighborhoods. I just searched the MLS in four North side neighborhoods relatively close to the lake — Edgewater, Uptown, Lincoln Square and North Center — and found 29 two-flats for sale from $149,000 (a foreclosure in Lincoln Square) to $400,000.

Is it time to jump back into the two-flat market? If the numbers make sense, I say yes.

Written by Sue Fox // Please leave a comment.

Downtown condos with stunning lake views for under $700,000

filed under: Buyers, Chicago home prices, Loop posted on July 14th, 2011

A CONDO WITH A VIEW:

A CONDO WITH A VIEW: This is the view from the southeast corner of Aqua, located at 225 N Columbus Drive. A 2-bedroom/2-bath condo on the 55th floor is now available there for $625,000 (marked down from $705,000 after 19 fruitless months on the market.)

Recently I helped one of my clients find a 2-bedroom condo in downtown Chicago. But this wasn’t just any 2-bedroom unit she was after; it had to be above the 15th floor with a fabulous, unobstructed view of Lake Michigan. Two baths, a balcony, and parking were also on the list.

We searched on and off for months, exploring high-rise buildings along the lake like 1212 Lake Shore Drive and 1300 Lake Shore Drive. Then we moved further south, where we saw plenty of units in newer luxury buildings such as 225 N Columbus Drive (“Aqua”); 420 E Waterside Drive; 340 E Randolph Street; 130 N Garland Court; and 60 E Monroe Street, among others. One of the nice upsides to our prolonged real estate downturn is that the Chicago Loop is now swimming in condos, many of them still owned by developers — and this oversupply means buyers can now get a piece of prime downtown property for a reasonable price.

Take 130 N Garland, a high-rise built in 2005 that directly overlooks Millenium Park, with the lake shimmering behind the grassy expanse and the Pritzker Pavilion. In 2007, several 2-bedroom/2-bath units sold in the building at prices between $800,000 and $850,000. But this summer, my buyer was able to find an east-facing condo on the 23rd floor for substantially less.  It had been on the market for two long years, originally priced at $795,000 (with parking sold separately for another $40,000.)

My buyer closed last week… for $690,000, including parking. Just in time to watch the Fourth of July fireworks from her new balcony overlooking the lake!

These are the kind of deals people are now finding in downtown Chicago. Almost new units in almost new buildings, in the heart of the city with a true lake view. Many of these 2-bedroom units can now be had for less than $700,000. Call me at 773-816-1788 if you’d like to see some.

Written by Sue Fox // Please leave a comment.

Chicago ranks #1 nationwide in foreclosures

filed under: Buyers, Foreclosures, Lakeview, Sellers posted on July 9th, 2011

CHICAGO, FORECLOSURE CAPITAL OF THE NATION:

CHICAGO, THE NEW FORECLOSURE CAPITAL: Unfortunately, Chicago now leads the nation in the number of foreclosed homes. This 3-bedroom, 3-bath foreclosed house in Lakeview, which was listed at $586,000 at the end of 2009, finally closed last April for $405,000.

The Chicago area now has the largest inventory of foreclosed homes in the nation, and these abandoned properties take longer to sell here than in most other cities.

With 118,776 homes that are either bank-owned or in the midst of being seized by lenders, Chicago ranks first in foreclosures among the 20 biggest metro areas, according to RealtyTrac, a company that compiles housing data. Even the cities that were hit hardest by the housing bust, such as Los Angeles, Miami, Las Vegas, and Phoenix, had tens of thousands fewer homes in foreclosure when the data was collected in May. Los Angeles, for example, was #2 with 86,745 foreclosed homes.

As a realtor who regularly shows homes throughout Chicago, particularly on the North side, I can testify that many of the foreclosures here are: 1) concentrated in poorer, less desirable neighborhoods with older housing stock 2) in lousy condition, often missing kitchen appliances or pockmarked by signs of neglect, such as water leaks and mold 3) if they are condos, located in buildings that may have other foreclosures, short sales, units not paying their assessments or financial problems that make lenders unlikely to give a buyer a mortgage there 4) owned by banks that are disorganized, unresponsive, and even idiotic in their approach to selling the home.

In a story today in the New York Times, the glut of Chicago foreclosures is also blamed on Illinois law that protects delinquent borrowers by requiring lenders to go to court to foreclose, creating a backlog of cases. Meanwhile, Attorney General Lisa Madigan is investigating banks’ “robo-signing” practices, involving the creation of  false loan documents.

Also slowing down the sale of distressed properties is the reluctance of banks to lose money. Banks will be banks, of course, and they don’t want to sell foreclosed homes for substantially less than what the borrower owed on the mortgage. (I also see this mindset slowing down and often thwarting short sales, which is why I generally discourage buyers from even pursuing them until the banks get their acts together.)

The bottom line is that Chicago and its suburbs, especially the poor neighborhoods, are full of foreclosures. Buying one requires lots of patience and the acceptance of more risk than you’d encounter in a normal sale. But there are still some good deals out there, and I have helped several of my buyers pursue foreclosed homes that they now happily own.

Written by Sue Fox // Please leave a comment.

Experts predict bottom for housing prices

filed under: Buyers, Chicago home prices, Gold Coast, Market conditions, Sellers posted on July 6th, 2011

Will 2011 prove to be the bottom for Chicago home prices? The jury is still out, but on a national level, many housing experts believe that the worst will soon be behind us.

A MILLION DOLLAR DISCOUNT: This Gold Coast

DRAMATIC DISCOUNTING: This Gold Coast greystone, built in 1883, still boasts many historic details, such as a hand-carved staircase, leaded glass windows and a mosaic tile foyer. All it needs now is a buyer! Have prices finally found a bottom in Chicago? One can assume that this owner, who 0riginally priced the home at $2.15 million, hopes so. Currently for sale at $1.49 million, it has been on the market for nearly 3 years. Jeanne Carava of Prudential Rubloff has the listing.

In June, MacroMarkets LLC polled more than 100 economists, real estate experts and investment strategists with a wide range of viewpoints, including the National Association of Realtors Chief Economist Lawrence Yun, Moody’s Analytics economists Mark Zandi and Cecilia Chen, FusionIQ CEO Barry Ritholtz, and Freddie Mac Chief Economist Frank Nothaft. More than half of the panel said they expect U.S. home prices to hit bottom sometime this year and then remain stable through 2015.

“A significant majority of our panelists believe that the bottom for home prices arrived in the first quarter or will arrive sometime before year end,” said Robert Shiller, co-founder of the Standard & Poor’s/ Case-Shiller National Home Price Index and Macro Markets’ chief economist and co-founder. “Despite persistent macroeconomic uncertainly and unprecedented housing market dysfunction, almost two-thirds of the panelists see the U.S. residential real estate market as at an historic turning point.”

To be sure, I still see plenty of homes that aren’t selling. But those that do sell tend to be either distressed properties at bargain prices or handsome homes with plenty of amenities in solid neighborhoods. Put it all together, and it seems home prices in Chicago are finally starting to touch bottom.

Written by Sue Fox // Please leave a comment.

Condo & townhome prices up in Lincoln Park

filed under: Buyers, Chicago home prices, Lincoln Park, Townhomes posted on July 5th, 2011

A SPARK IN LINCOLN PARK: Some Chicago areas are still hot, even in this punishing market and some

A SPARK IN LINCOLN PARK: Some Chicago areas are still hot, even in this punishing market, and some are not. Lincoln Park, one of the city's most popular and wealthy neighborhoods, has held its value. Condo and townhome prices have surged 14.2% here during the past two years. This 3-bedroom townhome at The Pointe, for instance, sold for $710,000 this spring.

Buyers often ask me for advice about a key question: Is it better to buy a smaller place in a nicer neighborhood, or a bigger home in a slightly less-desirable area? Real estate always involves a series of trade-offs (regarding price, location, size of the home, age of the home, amenities, school district, etc. etc. etc.) but this Location Vs. Size debate is one of the central decisions that buyers must make. In other words, is it a better investment to buy a 2-bedroom condo in, say, a stable, affluent area like Lincoln Park… or maybe a 3-bedroom condo a little further north, perhaps in Uptown or Edgewater?

These days, my vote would have to go with Location. That’s because we are now in Year 5 of a brutal and unrelenting real estate downturn, and I’ve watched homes in many fine North Side neighborhoods lose their value as buyers increasingly turned away from up-and-coming, less central areas in favor of those that were already quite popular. A bird in the hand is probably worth at least five in the bush in these uncertain times, and if you buy in an established, thriving community like Lincoln Park, you will likely come out ahead no matter what.

Consider the prices of condos and townhomes in Lincoln Park over the past two years. While other Chicago communities (and the city as a whole) saw home prices drop, the median sale price for Lincoln Park condos and townhomes increased 14.2% since June 2009, according to MLS data. And the climb has been relatively steady. Two years ago, the median sale price was $530,000. A year later, it was $557,500. And this June, it had jumped to $605,000.

Chicago home buyers are voting with their feet. Every day, they are choosing where to invest, live, and raise families — and they aren’t in a mood to gamble on a neighborhood that seems to be struggling or battered by foreclosures or lacking a strong commercial center or too far from the action. Lately I’m seeing more buyers opting for places like Lincoln Park, Lakeview, Bucktown, and the Gold Coast over areas like Logan Square, Irving Park, Albany Park, Uptown, Edgewater and Rogers Park — even if it means less space.

Written by Sue Fox // Please leave a comment.

Sweet interiors in Wicker Park and Bucktown townhomes

filed under: Bucktown, Buyers, Chicago home prices, Sellers, Townhomes, Wicker Park posted on June 20th, 2011

BUCKTOWN LUCK:

BUCKTOWN LUCK: This snazzy kitchen, burnished by $60,000 in upgrades including custom cabinetry and Brazilian granite countertops, was an eye-catching centerpiece of a Bucktown townhome. Priced at $669,000, it went under contract within just three weeks.

I have some clients looking for a townhome in the $700,000 range in Wicker Park, Bucktown, or Lincoln Park, and lately we have run across several impressive homes with a least three bedrooms, garage parking and a roof deck. Because Wicker Park and Bucktown tend to boast newer construction than other areas of the city closer to the lake, their selection of mid-range townhomes has been more attractive than that of, say, Lincoln Park, where many townhomes were built in the 1980s.

Take, for example, the 4-bedroom, 2-and-a-half bath townhouse at 1757 N Paulina, Unit O in the heart of Bucktown. Tucked away in a narrow courtyard off a nondescript street, these brick townhomes aren’t much to look at from the outside. (This is often the case with Chicago townhome developments; you’ll find an expanse of brick broken up by an occasional bay window jutting out, usually framed in metallic cladding or limestone as an accent. Nothing too exciting, generally, but once you step inside some homes rapidly distinguish themselves from the masses.)

Here on Paulina, the home immediately opens up into a soaring living room bathed in light, anchored by a dramatic floor-to-ceiling stone fireplace. The kitchen –which has seen some $60,000 in upgrades — was truly beautiful, with custom Brookhaven cabinetry and white Brazilian granite. There was a huge island and room for a large table (or a built-in banquette, in this case.)

This elegant home was priced at $669,000 — and it’s not alone. We have seen several at this price point that are worth consideration, a welcome change from the lofty prices such upgraded homes used to command. There was a similar unit in this development that sold for $800,000 in 2008.

Even in this market, a lovely home in a good location that is well-priced is likely to sell. People still value beauty (and location). And while this Bucktown townhome wasn’t quite right for my buyers, it sold quickly — just three weeks after hitting the market.

Written by Sue Fox // Please leave a comment.