Archive for 2006

Realtors' Association predicts existing home sales will fall again

Sunday, December 31st, 2006

The National Association of Realtors (NAR) predicted on Monday, December 11, that sales of existing homes and condos would continue to fall in 2007.

Existing home sales will likely decline as much as 17.7 percent this year, and an additional 9.4 percent next year, according to the NAR.

However, the Association's chief economist, David Lereah, is also forecasting a late-year recovery in 2007 home sales. He says that roughly 75% of the country will see a slow expansion of existing home sales by the end of next year, when compared with the fourth quarter of 2006.

Lereah added that “general gains in [home] value next year will be modest by historic standards.”

From July to September of this year, the rate of home price appreciation stood at 3.5 percent–a dramatic drop from the 12 percent rate the nation saw in the fourth quarter of 2005.

Lereah also predicted that 30-year mortgage rates would be up to 6.7 percent by September of 2007. Those rates were at 6.11 percent last week, according to mortgage finance company Freddie Mac.

[tags]Chicago Homes, Chicago Real Estate Market, Chicago Condo sales[/tags]

[dels]Chicago Homes, Chicago Real Estate Market, Chicago Condo sales[/dels]

Home Prices Fall–With No Bottom In Sight

Thursday, December 28th, 2006

The biggest drop in existing home prices ever recorded was posted in October, at the end of a three-month slump. The National Association of Realtors said Tuesday that it expects weakness in pricing to drag on into next year.

The previous record drop was a 2.1 percent decline in November 1990, the real estate group said.

Condo prices have fallen even more steeply and steadily. They fell 5.3 percent in October, the fifth straight year-over-year decline. The median condo price is now down 7.5 percent from the high reached in June 2005.

The weakness in home prices probably won’t disappear soon, according to Realtors spokesman Walter Molony. “We do expect we'll see prices stay below year-ago levels through the end of this year, and pick up in the first quarter of 2007,” he said.

The drop in prices illustrates a sharp change in the market. Median home prices peaked at a record high $230,000 just last July. Last year, existing home sale prices were 16.8 percent above October 2004 levels–the fourth-largest year-over-year increase in prices the NAR had ever recorded.

“Certainly the astronomical price appreciation seen over the last few years is a thing of the past,” said Wachovia economist Phillip Neuhart. “Much of the decline in median prices over the last few months can be attributed to the changing mix of homes sold as cautious buyers, seeing a weakening housing market, are less likely to buy up into a more expensive home.”

The huge increases in home prices a year ago caused a new-construction monsoon, flooding the market with new homes and leading in part to the current downturn, despite historically low mortgage rates and low unemployment, two conditions that normally build further price appreciation.

Not only did developers build homes in record numbers last year, but many were bought by speculators looking for quick profits, rather than places to live. Those buyers are now looking to sell the homes.

The existing home sales report comes the day before the government reading on new home sales, which showed a 9.7 percent year-over-year drop in median new home prices in the September report.

Many major builders, including Pulte Home, Centex, D.R. Horton, Lennar, KB Home and Toll Brothers have seen sales and earnings plummet as a result of the housing slowdown, and are warning that the housing market hasn’t bottomed out . . . yet.

Still, last year’s strong price gains have left most buyers who stayed in their homes for a year or more with more valuable homes, even allowing for recent declines in prices.

[tags]Chicago Real Estate market, Chicago Condos, Chicago Home prices[/tags]

New Opportunities for Condo Owners in Chicago

Wednesday, December 27th, 2006

With the condominium market in Chicago plateauing somewhat due to market saturation, Condo owners who have befallen hard times trying to get renters or buyers have a new option: CRS.

“At this point in the market, what we really are is more of a safety valve or a way for people to weather the current situation,” Michael Zink, one of CRS' developers, says. “We can mitigate loss in this period of recovery.” Recovery?
The idea behind CRS is to provide some sort of insurance for condominium owners in Chicago: the owner of the unit pays 10% of the value of the monthly lease transaction in exchange for a guaranteed rent check every month – even if the unit is unoccupied. CRS also provides services that find tentants for the condo or collect rent. broken links test The success of CRS is allowing them to expand their business currently. As they grow, more options for condo owners will most likely be available. It's an interesting idea.

[tags]Chicago Condominiums, Condo Lease, CRS[/tags]

Construction to Begin on New High-Rise Condo in Lincoln Park

Wednesday, December 27th, 2006

The new triple-tower high-rise project will be the first multifamily condominium project to be built in Lincoln Park since the early 70's.  The design will incorporate a traditional masonry look, and overlooks Lake Michigan, Diversey Harbor, and the North Pond.  The $350 million complex includes a total of 312 condo units and 13 townhouses in three towers, which will be 22, 31, and 38 stories – easily classified as high-rise condos. One-bedroom to four-bedroom units will vary in size from 800 sq. feet to about 12,000 sq. feet.
Completion of these condominium towers at 2520 North Lakeview Avenue is expected to be in late 2009.  Demolition of the current site, which houses the former Columbus hospital, is expected to begin in November of this year.

But what about the housing slowdown?  According to an adviser to the builders, “The upper end of the condo market is tough, but we think this project will differentiate itself by the location and spectacular views.”  As if other empty condos in the city of Chicago aren't located by and have great views of Lake Michigan.  You've got to hand it to them, though.  Very brave going ahead with this project in the current market, with analysts forecasting even more of a slowdown, or at times even an all out recession.  But the change to Lincoln Park will be welcome – the old Columbus Hospital shut down in 1998, and has been largely vacant since then.

[tags]Chicago Condos, Lincoln Park Condos, High-Rise Condos, Columbus Hospital[/tags]

New Condo Hi-Rise in South Loop

Friday, December 22nd, 2006

This spring, construction started on Vetro, a 31-story luxury hi-rise located in the South Loop at 601 South Wells. Here's some of the details:

  • Floor to ceiling windows (Vetro is Italian for “glass”)
  • Translucent interior walls (I've seen this before – very cool, very modern)
  • 500 – 2,000 square feet
  • One indoor parking space per unit
  • Fitness center
  • Outdoor sun-deck
  • Community/Media rooms that seat 25 people
  • Commercial space in the building is slated for a couple of classy restaurants
  • Price: Mid-$100's to $800,000

You can check the construction camera Here.

The South Loop is undergoing a great economic and population expansion. To learn more about the South Loop, check out Best Chicago Neighborhoods.

Condo Auction – December 5th, 2006

Thursday, December 21st, 2006

@ 7:30 p.m. at the East Bank Club, 500 N. Kingsbury, for 17 condominiums located at Huron Street Lofts in River North.  Open houses will be held on November 29th from 5-7 p.m., and December 3rd from Noon-2 p.m.  They're 1 & 2 bedroom condo lofts that feature timber construction and original exposed brick walls.  There's also a building sundeck. These loft condos were previously priced at $389,000, but are going to go on absolute auction, which means that there is no reserve price – these could go really cheap, but the suggested opening bid is $125,000.  Rick Levin & Associates, Inc. will be leading the auction.

[tags]Chicago condos, Chicago loft condos, Chicago real estate auction[/tags]

Mortgage-Interest Rates Hold Steady Near 2006 Lows

Wednesday, December 20th, 2006

Freddie Mac's weekly survey showed rates for the benchmark 30-year loan near its yearly low as of Thursday, December 13th.

Nationally, the 30-year fixed-rate loan averaged 6.12% for the week, up from 6.11% in the week prior. The mortgage’s low point was Jan. 19, when it hit 6.1%. At this time last year the loan averaged 6.3%.

15-year loans, popular with homeowners looking to refinance, rose from 5.84% to 5.86% . At this time last year the 15-year averaged 5.85%.

The 1-year Treasury-indexed adjustable rate went up from 5.43% to 5.45% (compared with 5.15% a year ago), while the 5-year hybrid ARM held steady at 5.92% (compared with 5.77% a year ago).

Reports of increased job growth and November retail sales that exceeded expectations were offset by weaker wage growth and lower consumer confidence in December. According to Freddie Mac chief economist Frank Nothaft, these mixed economic reports prevented any drastic changes in mortgage rates this week.

The Mortgage Bankers Association said Wednesday that applications for mortgages, particularly applications for refinancing, have increased in recent weeks due to mortgage rates’ stabilizing at comparatively low levels.

With rates remaining around their lowest levels for 2006, many borrowers who relied on exotic mortgages like subprime ARMS to purchase high-priced homes are now seeking safety in a fixed-rate loan, said Richard Powers, general manager of the online-mortgage lender Ditech.com.

However, borrowers are increasingly failing to keep up with their mortgage payments. According to the MBA, mortgage delinquencies spiked upward during the third quarter for all types of loans, but especially for subprime ARMs.

[tags]Chicago Mortgages, Interest Rates, Chicago ARMs[/tags]

[dels]Chicago Mortgages, Interest Rates, Chicago ARMs[/dels]

Mortgage Rates: Controlling Market Growth?

Tuesday, December 19th, 2006

chart.gif

Tired of seeing charts like this one?  You may see something like the reverse soon (imagine the graphic upside down).  Although the Fed stopped raising interest rates last quarter, home sales continue to slow, but for how long?  History teaches that it may not be too long before home sales begin to rise again – as long as the rest of the economy takes a little turn as well.

The consumer confidence index, or how people who spend money in this country feel about the economy, “brightened” more than expected in September, causing realtor's hearts to skip a beat.  This may be an overstatement, given that consumer confidence is only loosely related to the housing market (and condo sales!).  Most likely the confidence index was up because of declining gas prices and the leveling off of interest rate increases.  But will Joe Consumer shovel out the dough for a new condo in Chicago because he believes the economy to be somewhat “better”?  We'll have to see.  Check for an update next month. Chicago satellite maps

Park View East Condominium Project to Open in December

Saturday, December 16th, 2006

It's not exactly what I've been hearing on TV, radio, or in the newspaper, but…

“There's a huge condo market with a lot of opportunity, we're still seeing the market as very strong,” says Jim McLean, Executive Vice President of Tishman Construction Co., which is planning to finish construction on the $28M Park View East soon.  The 140-unit condominium project is located in Lakeview at 828 W. Grace Street, and includes over 4,000 square feet of retail space on the ground floor, which used to be a building that housed the community-favorite Marigold Bowl.  Most of the units in the building include spacious balconies, and all have red oak hardwood flooring.  Unit prices vary from around $300,000 for “typical units” to $340,000 for “premier units”, most of which have already been sold.  None of the penthouse units are available.

pve.jpg

[tags]Chicago condos, Park View East, Lakeview[/tags]

The $200M Park Michigan

Wednesday, December 13th, 2006

Slated to begin construction in 2007, with completion scheduled for 2010, the pre-construction condominium Park Michigan will be the tallest building in Chicago south of Van Buren, and the 10th tallest in all of Chicago, at 80 stories. It will be located on a 8,000 sq. ft. lot at 830 S. Michigan Avenue.

11-01_big3.jpg

This hi-rise condo will feature 376 one- to four-bedroom condo units ranging from 700 to 3,000 square feet. Amenities include landscaped decks, green roofs, indoor and outdoor pools, a fitness center, 470 parking spaces and an illuminated crown that will be clearly visible in the South Loop skyline. The developer of this condo, Renaissant, has also built projects such as the 253-unit Vision on State St. and the complex at 1000. S. Michigan Avenue.

[tags]Chicago Condos, Hi-rise Condos, Park Michigan[/tags]