Monday, June 28, 2010

Short sale confusion?

Short sales have been in the news for quite some time but there is still quite a bit of confusion. There was a great article in the Chicago Tribune on Saturday that attempts to de-mistify this. It really does a good job at giving you both the seller and buyer perspectives. It is clearly not for everyone and requires a good amount of patience.

Fannie Mae recently announced that they will require those who can make their payments yet still move forward with a short sale or strategic default, wait seven years before they are eligible for a Fannie Mae loan. Shockingly it is estimated that there are 11 million homes across America who are under water. That means the home owner owes more on the mortgage than the current market value of the home. There are even further estimates that we could have up to 21 million households upside down in their house in three years. It seems that Fannie Mae is taking this position so homeowners think twice before going down the short sale road.


A strategic default is when a home owner walks away from their mortgage that they could pay but have decided not to because they owe more than their house is were worth at the current time. Yet there can be a variety of repercussions. One is that the loss follows you as a deficiency judgment until it is paid off down the line.

Fannie Mae has also stated that they will pursue deficiency judgments in states that allow this by law. Fannie Mae will look at each hardship as it crosses it desk. A person with an acceptable hard ship or an approved short sale will only have to wait two years before obtaining a mortgage backed by Fannie Mae. Another option for home owners is to sign over their house in a "deed in lieu of foreclosure" to avoid a lengthy foreclosure process.

Amazingly, statistics show that 7 out of 10 people who were foreclosed on did not seek a real estate professional for assistance. It is a good idea to speak with a real estate agent knowledgable in the short sale process as well as an attorney. Start this process early before you become overwhelmed and feel you have no options. There may be more than you think.

Saturday, June 26, 2010

Lakefront Sculpture Exhibit

One of the many things I love about Chicago is the accessibility of works of art to residents and visitors. Of course the most familiar are the downtown outdoor sculpture: Calder at the Federal building, the lions in front of the Art Institute, etc, etc. Many times I have stood at Daley Plaza and watched kids climb all over the Picasso getting and early “feel” of the world of art. The neighborhoods do not fall short in the art department and this is especially true of Lakeview and Lincoln Park. For the last 9 years, Alderman Vi Daley has sponsored this juried outdoor sculpture exhibit in Lincoln Park and over the last few years Alderman Tom Tunney has expanded it to include Lakeview. The installations of the works have happened over the last month and they are now ready to view around the neighborhoods. To get a full tour (and it is definitely worth the walk) pick up the new 2010 brochure at either Alderman’s’ office. It provides an easy to follow map so that you don’t miss a treat.

And since walking is all anyone will be able to do in the parade congested Lakeview this weekend, you can see the parade and two of the newly installed sculptures on the parade route.

The first is at the northwest corner of Roscoe and Broadway. If you can get an outdoor seat at Starbucks you can sit and wonder what the inspiration or meaning is of the “Composition in Aluminum” by John E. Bannon.

Further south on the northwest corner of Barry and Broadway is another delicious sculpture in aluminum entitled “Uplift” by Michael Young. These sculptures will inspire you to hike around the whole Lakeview and Lincoln Park neighborhoods in search of more treasures.

Wednesday, June 23, 2010

Sunday is the Pride Parade in Lakeview

It is that time of year again for the Pride Parade in Chicago. Originally started in 1970 with an attendance of only 150 people, this has grown to be one of Chicago's largest parade of the season and attendance is expected to exceed 500,000. The parade route is from the corner of Halsted and Belmont and continues north on Halsted to Broadway where it turns and heads south to Diversey ending on Lincoln Park. Quite a long route. Be prepared for a very busy area and traffic is virtually stopped east and west. Instead of driving, consider biking or cabbing then walking. It is also an opportunity to see some of the beautiful homes through east Lakeview. Consider taking a bus down lake shore. East of Halsted is beautiful and is only a couple of blocks from the parade itself. One of my favorite streets is the 500 block of Hawthorne which is filled with only a handful of grand homes. It is unlikely you will find many open houses in that neck of the woods on Sunday. So enjoy the walk and the festivities.

Tuesday, June 22, 2010

Chief Economist for Freddie Mac speaks in Chicago

I recently had the opportunity to hear an excellent presentation from the Dr. Frank Nothaft, the chief economist for Freddie Mac about the economy and housing in general and the Chicago Market in particular. Here are some highlights from his presentation and his comments from the discussion that followed.


On Employment

The recovery will be slow but he doesn’t believe there will be a double dip. It will be slow because over the last 2 years the US lost 8.4 million jobs and at the GDP growth rate expected we should earn back about 2 million jobs per year. At the current rate of 10% unemployment, this will mean a 2 point improvement each year. – good – but not enough to suggest a steep and quick recovery. So employment will keep the recovery pace slow it will be a recovery.

On Fiscal Policy

As you may recall, in 2009 the government approved a massive stimulus to invest in the recovery...however, there is still half remaining to be spent. So we are seeing a recovery AND have some additional investment available to create jobs and provide credit.


On Monetary policy

Interest rates – people say – can’t get much lower but, according to Dr Nothaft we haven’t fully felt the effect of the decrease in rates. He believes that it takes 12 months for the effect of a 0 percent discount rate to be fully felt in the mortgage and other lending rates. So, even if the fed started to tick up the discount rate we have some time at these great mortgage rates. He stated that the interest rate should stay BETWEEN 4.75% and 5.25% for the next 12 months.

On Housing prices

Inflation is predicted to be low at about 2 ½ % per year and this means that while we have probably seen the bottom, we will continue to see low housing prices or at least very slow growth in housing prices.

This leads to the good news.

Housing affordability is the highest since 1971. This index look at mortgage rates, housing prices and income to determine if the median income family can afford a median priced home. Housing affordability is the highest since 1971



Saturday, June 19, 2010

OPEN HOUSE OF THE WEEK-19 N. Aberdeen

Situated in the heart of the West Loop CA23  is a new project by The Brixton Group. It has been under construction for awhile but units have been delivering and it is a well built and sleekly designed property. Known as , the development at 19 N. Aberdeen will eventually consist of two buildings with 48 new construction 2-4 bedroom units boasting ceiling heights between 11 and 18 feet and ranging from approximately 1900 square feet to 4000 square feet. The inspired, modern architectural atmoshpere makes this a unique and exceptional opportunity for today's purchaser seeking dynamic space, high quality design and top of the line finishes. Private elevator access to each unit, materials such as steel, glass and limestone combine for a brilliant facade, garage parking and large private landscaped yards for selected units create a unique and special development.


If you are going to stop by the Taste of Randolph Street fest this weekend, check out these places. They will be open on Sunday, June 20th, from 12-3pm.

While you're out and about, there is an amazing new property to the market at 850 W. Adams. This is one of my favorite loft buildings in the area if you are looking for large, sprawling space. It is two units combined into one leaving lots of open living space and quiet separate sleeping space The dining and living room, family room, office/den and eat in kitchen are combined into one giant living and entertaining space. Features include stainless and glass accents, high ceilings and all windows with southern and eastern exposure. There is also a terrace along the east to watch the sunrise.

Poured concrete, exposed duct work in the main living space and soft loft curves and finishes in the bedroom spaces plus a separate office with murphy bed.

This is presently owned by Annie and Lou originally of Annie Properties who were leaders in building and developing the west loop area.


If you are interested in seeing either property or if you have questions, give me a call.

Thursday, June 17, 2010

Spotlight on the West Loop

This neighborhood has truly blossomed over the past 2 decades to become one of the most livable and entertaining neighborhoods. Once filled with artists, design and photography studios it is now home to all that plus the folks that realized walking to work in the loop was a great way to start the day.

The neighborhood is bounded by restaurants – Greek along Halsted, a wonderful assortment of restaurants near the northern boundary on Randolph and a wealth of choices in between. A few favorites are a great new breakfast place at Jackson and Halsted called Miele. Be prepared to wait on weekends for brunch.



Another great weekend brunch location is Inas (the breakfast queen as she is more commonly called) at 1235 W. Randolph. You can get pretty much anything you can imagine and there is always a great twist on most breakfast ideas on the weekend. In the summer there is outdoor seating along Randolph which is a bit quieter where she is located at the western end of the boulevard.

If your in the mood for a little spice, hit Wishbone which is around the corner from Harpo Studios where The Oprah Winifrey Show is taped. They do an excellent, speedy and affordable weekend brunch as well with that southern twist. There is an abundance of outdoor seating here.

One of my favorite more casual and elegant spots is Sepia at 123 N. Jefferson. The interior is terrific and the menu fantastic. A great date night place.
If  you still can't decide, then just park and walk down Randolph where you will have dozens of excellent dining alternatives.





And you can get a real taste of the area this weekend at Taste of Randolph Street - Friday evening the 18th through Sunday night the 20th. The entrance is at 900 W Randolph and features the galleries, restaurants from the area and great entertainment from all over the world.

Once a meat packing and industrial district, it may be the place in Chicago where lofts were invented or at least perfected. Wonderful industrial space turned into lofted living space and then the wave of building throughout the 90’s and early 2000’s brought soft lofts and new construction

The housing market in this neighborhood tends toward attached single family (townhome, duplex, condo) with average prices holding pretty steady. Over the last 2 years the price has dropped only slightly (4.1%) in what has been a generally tough housing market. However, they have seen a longer market time (193 days this June versus 123 days on market 2 years ago). Patience is required.

Monday, June 14, 2010

Appraisal Challenges...

Many people have been experiencing issues with appraisals over the past several months. The problem has been that there is little and sometimes no historic data for appraisers to use so they have to dig. And we as agents have to dig too and in some cases provide information that isn't so easy to find such as properties that sold off market.  Fortunately, we have been bouncing off the bottom for some time now and we have seen transactions in most areas and buildings which is moving the process along again. But many appraisers still consider much of Chicago in a declining market which does not bode well for sellers trying to sell to buyers trying to secure financing.  

My issue is that if buyers, who have certainly done their homework, are willing to pay in this market, and sellers are willing to sell, how can the appraiser, who many times is from a completely different market and often a different city, have such power to squelch the deal.

Our contributing lender, Bonnie Vasilion of 1st Advantage Mortgage, has a few tips. She also has what is called "Exempt Broker Status" which means in some cases she can select the appraiser to use who is familiar with where the property is located.

It seems all the talk about real estate transactions these days is centered upon APPRAISAL ISSUES! Everyone has stories to share.


Due to the “Home Valuation Code of Conduct Law” (“HVCC”), lenders are no long able to discuss value with appraisers, nor can lenders speak with appraisers or even choose who will be appraising your home.

However, there are some things that can be done to work toward receipt of an appraisal with the most realistic assessment of value:

1. When meeting the appraiser on a purchase transaction, have the listing agent provide the appraiser with relevant recent comparable sales and any information about improvements made to a property. Include the value of improvements made.

2. Provide a floor plan and survey.

3. For borrowers refinancing, do what is suggested for listing agents: let the appraiser know of sales in your neighborhood of homes you feel are similar—many times properties sell “off market” and don’t show up on the records used by appraisers. Also, provide the list and value of improvements, as well as a copy of floor plan and survey if you have that available.

Don’t wait until the report comes out; once those reports are issued, it is nearly impossible to refute an appraisal.

One important note: I have “Broker Exempt Status” on a very competitive Jumbo financing program, meaning I am authorized to select the appraiser. Though I cannot discuss value, I can choose appraisers who are knowledgeable about our local markets, so keep that in mind: it can be a deal saver!

Finally, it is true that a lender cannot “toss a bad appraisal” and simply order a new one. If your appraisal doesn’t work out with one lender, you might need to go to another lender and start the process over.

Appraising a property is not scientific; there are variations. Be prepared; give the appraiser as much information up front as you can, then let them do their report and hope the value supports your transaction. As always, feel free to call me at 847-869-7100 ext 3322 or 312-502-0136 with any questions you might have.

Saturday, June 12, 2010

OPEN HOUSE OF THE WEEK-1728 N. Cleveland

If you are not completely exhausted from your great art hunt at the Old Town Arts Festival, then you might wander into an open house a few blocks away at 1728 N Cleveland on Sunday, June 13th. It is open from 2-4 and presents luxurious living - some of the convenience of the suburbs (attached garage) with all the elegance that only a well designed single family home in the city can provide. Offered at just under $3.6 million, this is 6500 sf of custom everything.


You will be struck first by the crisp carved limestone fa├žade as you enter. The home has everything you would expect in a high end home. The tile work in each of the 5 ½ bathroom is striking. The kitchen is spacious and well appointed. The large detailed molding provides a finishing touch in every room. There are two decks – one over the garage for company entertaining and one off the top floor guest room. This was my favorite space. The current owners turned two rooms on the west side of the top floor into an office, sitting area and private balcony. What a joy it would be to commute upstairs to this private work space. It even features a kitchenette for coffee, beverages and other snacks. Another favorite part of the home is the large (300 bottle) wine cellar. Maybe you could negotiate for a choice bottle at the closing. I will leave the rest for you to discover.

The next home will not be open to the public but, should you be interested in a high-end contemporary home, 1916 N Burling can surely be scheduled to view. You can picture warm family nights in the open kitchen/family room at the back of the home looking over the courtyard and 2 level deck. When entertaining, the architect has created an open living room at the front and overlooking the living room is an open space that now features a baby grand piano. Music could softly poor over the rails for your special guests. Every touch, every stair rail, every light fixture will appeal to those of you that adore the clean lines of a contemporary home. This home is offered at just under $3 million Both of these homes are on quiet tree lined streets and have excellent schools, restaurants and entertainments within walking distance. . If you would like to view either of these homes, it would be my pleasure to arrange.


Wednesday, June 9, 2010

Spotlight on Old Town


Well it is that time of the year again. The first big art fair of the season is this weekend...The Old Town Art Fair and the Wells Street Art Festival. Old Town is a wonderful, historic community tucked into Chicago's Lincoln Park neighborhood. The center point is North and Wells and the historic area of the Old Town triangle runs north to Wisconsin and West to Larrabee. The neighborhood does cross over North Avenue to the south for several bocks as well with many hidden treasures tucked in everywhere. The Old Town Art Fair is a great opportunity to have first dibs on pieces from some terrific artists before the season of art shows kicks into gear. And becuase this unique art fair takes place right in the center of the neighborhood it is a chance to see the area up close and even walk through some beauftiful gardens.



What makes the historic neighborhood so interesting is that no building within the triangle can be torn down. There are also restrictions on what you can do to the facade when doing a restoration. As a result, density levels in Old Town remains low and the neighborhood wonderfully quaint and intimate.

Two of may favorite shops are on Wells:

The Spice House and Old Town Oil. If you enjoy cooking and eating, these places will change your life.


The Spice House is located at 1512 N. Wells and is a small shop dedicated to the freshest, highest quality spices. It is ideal if you need to restock the pantry or for great ideas with a huge array of fresh and already themed packages.







Just next door the most exquisite oils and vinegars can be found at Old Town Oil which offers hand blended oils and vinegars from around the world. If you liked that unique grassy cold pressed oil you tasted in Tuscany, you can find that along with tasty, syrupy aged balsamic vinegars


The market in Old Town has experienced the same roller coaster ride as many of Chicago's other areas. Much of the upper bracket homes are tucked away here and have been quite sluggish over the past several months. Since the first of the year, only 6 single family homes have sold with an average sale price of $1.2M. Apparently many agents had to adjust to the market as this was almost 67% off original list prices. Once the prices were adjusted properly, closed values were at a respectable 94% of list with an average market time of 226 days. This represented only 15% of the inventory at the time. Presently there are 23 homes on the market with an average list price of $1.7M and an average of 261 days on the market topping out at $4.3M.


In the condo and town home market for the area, 21% of this inventory has sold since the first of the year totaling 64 units with an average sale price of $440,000 which was 95% of the adjusted list prices averaging 116 days on the market. Presently there are 116 units for sale with an average price of $447,000 topping out at $1.3M.


      

Monday, June 7, 2010

Economic Update-inventories are shrinking

There is a great deal of media coverage on the results driven by the tax credit for first time home buyers. The Chicago Tribune reports that purchase contracts rose 6% in April as compared to March and both March and February were up compared to their respective previous months. If you compare year over year you see significant growth in both contracts and sales (closed purchases) for Chicago in April. Nationally, we are seeing a similar tax credit effect.

The number I watch as a signal to a recovery is inventory. Nationally we remain solidly in a “buyer’s market” with 10 months of inventory (6 months is a balanced market). This number, though, is way down from almost 16 months in February. In Chicago the picture is healthier. We have gone from 10 months inventory in February to 7.1 months in March and – this just in – 5 ½ months in April. April shows us solidly in a balanced market – not a sellers market but balanced.




This does not mean that sellers should rush out and raise prices – but certainly confirm with your agent that your home is priced right for the market conditions in your specific neighborhood and home type. This does not mean buyers will be lining up to see homes and in a weak negotiating position but there will be a balance. We have seen the bottom and should expect a gradual improvement in the housing market as the economy and the outlook on jobs improves.

What next?

May and June numbers should show us what happens now that the incentive is past. We will see a high number of closings as we reach the June 30th incentive closing deadline. Will purchase contracts slow down? Will all the folks who sold to first time buyers be on the hunt for a step up home? My prediction is that we will see an increase in the average price of a home. The units may slow as some of the folks selling to first time buyers will relocate out of the market but the value of the purchased properties will increase due to trading up. Check back in to see if my predictions are accurate

Friday, June 4, 2010

OPEN HOUSE OF THE WEEK-443 W. Aldine in Chicago--OPEN Sunday, June 6th 11am-3pm

I am starting a new segment highlighting my favorite open house for the week. This weekend a new development that is a wonderful addition to Lakeview in Chicago is 443 W. Aldine. This is a grand four unit building that has been painstakingly refinished by Brad Lippitz who is also marketing the property. The attention to detail and the preservation of the original vintage charm is something Brad cares deeply about which comes through in this property...not to mention the amount of time it has taken to get this project to market. It was worth the wait.

Ranging from $479,000 for the ground floor unit to $1,475,000 for floors 2 and 3, these sprawling units are true single floor homes. The building has an elevator and abundant parking and just steps to the lake, park, transportation and all Lakeview has to offer.

According to Brad, you can Move right into this exquisitely finished and beautifully designed glorious full-floor expansive residence with light from 4 exposures in a conversion of a stately vintage elevator bldg on serene street.

And I must say that they are truly grand and gracious rooms complete with large eat-in chef's kitchen with great room area, gorgeous master with stunning bath, central heat and air, terrace, washer and dryer hook-up, low assessments,1-car gar+1 outdr space.Spectacular!


Visit the property Sunday June 6th from 11-3pm. Let them know Andy Gersten sent you!! Or you can visit the property online: 443 W. Aldine, Chicago

Wednesday, June 2, 2010

Spotlight on Lakeview

I am beginning a new series of posts that will highlight different neighborhoods each week (or that is my hope anyway). This week I am looking at Lakeview with just a few hotspots and area statistics.


If you missed the WOOGMS (Wellington, Oakdale, Old Glory, Marching Society) parade on Monday no worries there is another parade to celebrate Labor Day and plenty to do in Lakeview throughout the summer. The WOOGMS parade started over 40 years ago and has grow to be over a thousand people, mostly neighborhood kids.

Lakeview is bordered by Diversey to the south, Irving park to the North the Chicago River to the west and the Lake to the east. With those boundaries there are distinct neighborhoods, each with a personality, style and amenities all its own. South East Lakeview, Belmont Harbor, Southport corridor, Wrigleyville, Roscoe Village, St Bens and West Lakeview. It is characterized by tree lined neighborhood streets, a diverse population and an abundance of places to shop, eat and hang out.


Some of the best:

Wildes Restaurant – Pub food at its finest with bookshelf lined walls, a fireplace, a great bar. I recommend the Sheppard’s Pie, but my friends tell me the fish and chips and the chicken pot pie are works of art.

After dinner, stop at Bobtail for ice cream – named after the name for the classic soda fountain glass (a “bobtail”)

Lakeview is bordered by miles of lakefront biking, jogging, and walking trails in Lincoln Park. It even boast a lakefront driving range and a decent public golf course that borders the lake. Tee off heading north and end your round with the Chicago Skyline as a back drop.
 
The housing marketing in Lakview:

In the last quarter (Q1) units sales were up (24%) and average price was down an equal amount (-25%). The price decline in Lakeview may have been a mix toward first time home ownership. With tax credits as a powerful incentive, interest rates at historical lows and prices reflecting good value, it was a very tempting time for new buyers to jump in. Houses that are selling are selling a bit faster (199 days versus 238days last year) but it is all driven by knowledge of the market, and the market value of the home you are selling or looking to buy. We are still seeing more listings coming on the market than units being sold. With this build of inventory it will continue to be a buyers market.














Tuesday, June 1, 2010

5% down financing is back...and it is working...talk to Bonnie


Meet Bonnie Vasilion with 1st Advantage Mortgage . Located on the north side of Chicago, Bonnie has been working in mortgage lending long enough to know that thinking outside of the box these days is crucial. Now that the government stimulus has lapsed for most buyers, there are still low down payment options available with excellent rates. 5% isn't just for FHA buyers anymore.

According to Bonnie,  "People can buy NON FHA-Approved condos now with only 5% down! This opens up opportunities for many buyers AND sellers with units in non-FHA approved condominium projects. I can offer conventional financing with PMI (“private mortgage insurance”). This is also a much more affordable way to purchase rather than obtaining FHA financing."

With lending guidelines changing by the week, it is important you have a lender who is familiar with current trends. Make sure you have an open relationship with your lender so you can talk about the good and the bad so you can get into the right product and know you can get to the closing table without the headaches you hear so much about.

Feel free to contact Bonnie directly at her office: 847-869-7100  x 3322.