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]

I read recently that this year there’s 4 million homes on the market in the United States. According to historical data, that’s a million more than there was this time last year. That’s an increase of 33%.

“Until now sellers didn’t want to cut their prices. They were much more willing to provide an incentive – refinish the deck, seal the driveway, help with the financing, anything but cut the price,” says Mark Zandi, chief economist of Moody’s Economy.com. Incentives are nice, but let’s face it: the last thing sellers want to do is slash the price of the property. They make out better by offering buyers incentives like these, and also, many homeowners are very hesitant to accept the fact that they’re home isn’t worth as much as they originally thought. But now they’re finally waking up to the truth – that smart buyers are waiting for an irresistable deal – and that cutting the price of the property is the best way to get someone to buy a house, a condo, or anything, for that matter.

Even the mortgage companies are catching on. Chances are if you buy a new home, your mortgage lender will offer you some incentives (but be careful – because of the complexity of the mortgage process, these incentives tend to be less transparent).

Brokers are making out well, too. Because of the glut of homes, real estate brokers are being catered to by the home building industry, which means that your broker may be eyeing some incentives if he unloads a house on you – and he’s not required by law to tell you that. Be clear with your broker; ask him/her up front if they’re receiving any incentives for selling the property. If you ask, they’re obligated to tell you. Otherwise, your broker might be less than straight with you in this market.

[tags]Chicago real estate, buyer’s market, Chicago condos, Chicago brokers[/tags]

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.

There’s three ways to make money by investing in condominiums:

1. Lease the property at rents that exceed the cost of owning the property.

2. Buy the condo with the intent of renovating it to substantially increase the value, and then sell it quickly.

3. Find condos or townhouses that need to be liquidated quickly at a large sacrifice to equity.

In a perfect market, an investor can acquire condominiums and immediately sell them for a substantial profit. Essentially, these three concepts have made more multi-millionaires than any other type of venture. Why not? People buy and sell real estate with little or no money down constantly, and real estate has always been a much safer investment than putting money in the stock market.

However, in this ‘bear’ housing market, the scene is flooded with condos for sale. It’s not as easy to make money as it used to be. But how about tweaking the rules above to better fit these current market conditions? After all, isn’t it a great time to buy a condo in this city (or almost anywhere in the country, for that matter)? Condo prices are looking to come over the hill and start falling soon. So:

1. Use the current buyer’s market to buy a condo for a fraction of it’s original sale price.

2. Wait until market conditions flip, and they will, they always do. This would be a good time to rent the place out or spend some time renovating it. Rent it.

3. In next year’s seller’s market, sell the condo for a profit.

This will take a little research on your part – you’ll want to find the ideal location for renting a condominium – and you’ll also need to make sure that property values in the area are generally on the rise.

It’s all about patience; the second of the former three rules says to “Sell it quickly,” but you’ll need to wait out this current market.

[tags]Chicago Condos, investment condos[/tags]

Negative amortization: A method in which the borrower pays back less than the full amount of interest owed to the lender each month. This shorted amount is then added to the lump sum owed to the lender. This allows flexibility in packback of the home loan.

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If you’ve opted for an ARM (adjustable rate mortgage) in the past few years, chances are your initial, “teaser” interest rate was pretty low, probably somewhere around the 2% mark (over the last 2 years, homeowners have taken out over 1.2 million ARMs below this rate). But the “teaser” likely only lasts for a couple of blissful months at the most. After that, the rate of the mortgage adjusts to the current market: a 6% rate. Or a 9% rate. That’s a giant jump. Some could even end up with a loan balance that is larger than when they started:

“…because the initial teaser rate is a “payment rate,” not an interest rate. That means the market-rate interest on the loan starts to accrue from the get-go and monthly payments aren’t enough to cover it, let alone pay down any of your principal. (money.cnn.com)”

This means payments that start out at $1,000 may suddenly balloon to $3,000. If the homeowner can’t make up the balance each month, then it’s added to the overall balance of the loan. You can see how this could be a problem for many people, even those who attempted to refinance their loans with a low-rate ARM.
According to the data, 23% of those 1.2 million ARMs have negative equity now – which means the value of the home is less than the amount owned in loan paybacks.

It’s very important to consider this phenomenon when applying for an ARM, even if you’re refinancing. Those without negative equity can opt to switch their ARM for a fixed-rate mortgage in hopes of getting a lower monthly payment.

[tags]Chicago real estate, Chicago mortgage[/tags]

I take it you’ve heard it’s a full-blown buyer’s market in Chicago. If you haven’t, you’re probably not currently in the market to sell a home. Realtors are telling sellers to make sure and price any property reasonably, and this is good advice. However, before you put a condo on the market, you should put some thought into it first – and really try to impress a buyer with your condo.

Try to make the unit look unique. In this market, choices for buyers are virtually limitless, so the more distinct your condo is, the more likely it will impress a prospective buyer. A little extra decorating doesn’t hurt. What I like to tell people is this, “Pretend your boss is coming over to stay for a year.” Stock bathrooms, living rooms, and the kitchen with extra amenities. If anything in the condo is in less-than-new condition, you may want to think about offering a buyer credit to fix or replace the item. This way, you won’t have to make any guesses about a prospective buyer’s tastes.

Don’t try and make the unit look sterile, however. Emptying closets, for example, can send the wrong message to a buyer. Make it obvious what every room in the house is used for, even coat closets. If you’re lucky enough to have a condo with a nice view, show it off. Make it easy for them to imagine enjoying the view. This may involve some furniture adjustments. Put a chair directly in front of that view. Make it an obvious asset.

Make your condo a showroom. Help the unit speak for itself, price it reasonably, and you’ll have a good chance of selling your condo. But before you do anything, be thoughtful of the space. Don’t rule out hiring an interior decorator. In this market, you must be competitive.

[tags]Selling a condo, Chicago condos[/tags]

Chicago condos are available in many types, which are listed here:

Residential condos can be

• high rise or low rise (under 4 stories)
• own or row houses condos
• duplex (one house over another)
• triplex
• single detached houses
• stacked townhouses or
• in detached plots

There are even mixed use condos that are part-commerical and part-residential. Chicago condos come in various sizes with diverse features and in every price range.

Let’s discuss a few of them in detail:

Condominium Apartment

A Condominium describes how a home or some other property is owned, not what kind of property it is. If you own an apartment, then it’s an apartment-style condominium.

As a condo unit owner you are required to pay a monthly fee for the upkeep of the common elements. ‘Common elements’ are the areas shared by residents, such as lobbies, parking garages, and recreational facilities such as pools and gyms. These spaces are looked after by the condominium association. See the Condo Buyer’s Checklist for more information about condominium associations and what to watch out for.

Condominium Townhouses

The inside of condo townhouses are owned by each individual person. However the ownership of the exterior portion (common elements) is shared amongst all the owners. Condo fees typically pay for this shared portion.

The shared ownership portion include the outside of the building (including the roof), parking spaces, play areas for the kids, outside yard, outside of the building, exterior doors, garage doors etc.

Bare-Land Condos

Retirement villas are often built as bare-land condominiums. In other words, you privately own the building lot and the entire home on it, both inside the living unit and outside.

But you agree with all the owners to undertake common maintenance of all building exteriors and the private yards, as well as the common property. This saves money and creates a consistent appearance throughout the development.

Often built as duplexes, but maybe even as larger groupings, “villa” describes a bungalow-style home that features all the needed facilities on the main level, including the parking. It commonly appeals to seniors who no longer want to deal with stairs, although most villas offer an unfinished basement as well.

Some new types of Chicago condos include:

1. “Phased” condo. Here the common elements are added in stages.

2. “Common elements”. These are condominiums that consist only of common elements, but no units.

3. “Vacant land” condo. Under this type of condominium corporation the units can consist of vacant land. Owners can decide what to build later.

4. “Leasehold” condo. These are units built on land that is leased by the developer. Purchasers will never own the land.

[tags]Chicago condos, Chicago condominium apartment[/tags]