Was it the opposition of local residents? Was it the struggling economy? Or was it the glut of unsold condominium units already on the market?
Whatever the reason, a controversial condominium tower proposed for a lot next to a historic Michigan Avenue church is now dead. In a story reported by Crain’s Chicago Business, the Fourth Presbyterian Church of Chicago has given up on its plans to let a developer build a condo tower next to their church building, which has an official address of 126 E. Chestnut St., better known to passersby as the busy corner of Chestnut Street and Michigan Avenue.
It’s been a long road for the proposed 64-story condo tower. The first plans for it were created nearly six years ago, according to the Crain’s story. Many vocal neighborhood residents were never in favor of the project. Burton Natarus, then the alderman of the ward in which the project would stand, also opposed the project.
In Chicago, when the local alderman opposes a project, it usually dies a quick death.
The ward’s new alderman, Brendan Reilly, has also opposed the plan, something that certainly hastened the decision of church officials to declare the project dead.
Of course, the city’s sluggish condo market probably played a role, too. There are too many unsold condos already clogging the market. The city, at this point and in this economy, doesn’t need another condo tower.
The fate of the Fourth Presbyterian Church’s project is a good example of how significantly the city’s condo market has changed. During the recent housing boom, condos were selling at an incredible rate for high prices. Developers were eager to build new towers or convert existing apartment buildings into condos.
This has all changed now. Today, it’s a real challenge to sell a condo in the city. Owners can still do it, but they must set the right price. That’s why it’s so important to work with a licensed and skilled REALTOR®. A REALTOR® will help owners set the perfect price for their units, one that attracts fair offers and keeps a unit from sitting on the market for months.
Economists, my fellow REALTORS® and home sellers are all asking the same question: Has the housing industry finally reached bottom?
It’s a good question. Unfortunately, no one knows. We all hope that housing prices are finally ready to start climbing again. And we all certainly hope that sales will soon pick up. But for now, at least, sellers are still struggling to move their homes.
But while this isn’t wonderful news for sellers, it is great news for Chicago buyers. In today’s market, buyers interested in even the top city neighborhoods can find great value.
Here’s why: In December of last year, total home sales in the city of Chicago – including single-family homes and condominiums – were down 23 percent from the same month one year earlier, according to the Illinois Association of REALTORS®. There were 1,215 home sales in Chicago in December compared to 1,578 sales during the same period in 2007.
At the same time, the median housing price for Chicago in December came in at $235,000. That’s down a significant 18.2 percent from the median price of $287,450 in December of 2007.
For buyers, this is good news. Most analysts agree that sellers are actively lowering their asking prices. This means that buyers can purchase more home in the city for fewer dollars than they would have spent just six months ago. Sellers are also willing to negotiate, and not just on price. They’re willing to make reasonable repairs. They’re willing to work with buyers on setting a closing date that works for everyone.
The market definitely favors buyers. But don’t think this will last forever. It wasn’t that long ago when the Chicago market heavily favored sellers. Remember the days when sellers enjoyed multiple offers? Remember when they could routinely demand full-price offers? Real estate is a cyclical business. Chicago will again be a seller’s market. When? That’s something I can’t predict. But I can tell you that there’s never been a better time to buy in the city than now.
The Federal Open Market Committee voted to leave the Fed Funds Rate unchanged today. It remains within a target range of 0.000-0.250 percent.
In its press release, the FOMC reiterated most of the key points from its December 2008 statement, including:
In addition, the FOMC addressed the "extremely tight" credit conditions for U.S. households and business, even as it said some financial markets are showing signs of improvement.
To the Fed, the latter is a precursor for the former. For Americans needing new mortgages or other forms of credit, it may mean that getting approved gets easier sometime late this year.
Most importantly, the Fed's press release again mentioned the policy-setting group's intention to "employ all available tools" to promote economic growth. This includes the open-market purchasing of mortgage-backed debt that has helped fuel the current Refi Boom. The Fed indicated a willingness to extend the program beyond the initial $500 billion, if necessary.
For each of the Fed's interventions, though, there is a trade-off.
Buying securities costs money and the Fed -- literally -- comes up with the cash by printing it. The extra supplies devalue the U.S. dollar which, if left unchecked, can cause the Fed's plan to backfire in the form of runaway money supply-led inflation. The Fed is aware of this risk and is pledged to monitoring it closely.
Overall, mortgage rates worsened today after the Fed's statement.
Source Parsing the Fed Statement The Wall Street Journal Online January 28, 2009 http://online.wsj.com/internal/mdc/info-fedparse0928.html
When a homeowner sells his home and decides to buy a new one, there are 3 basic options for the residence -- sell it, keep it, or rent it.
Unfortunately, no matter which path they choose, move-up homebuyers in need of a new conforming mortgage will find qualifying for a home loan to be more difficult this season than in the past.
Mortgage guidelines are dramatically tighter for people "carrying two mortgages".
Among the changes this spring's buyers face:
Selling the primary residence If you plan to close on your new home prior to the closing of your existing home -- even if it's only by a day -- both payments must be listed as monthly debts on your mortgage application. This will disqualify the majority of homebuyers.Converting your residence to a second homeIf your current home has less than 30 percent equity in it, your mortgage application for the new home will not be approved unless you can show 6 months worth of mortgage payments + taxes + insurance in reserves for the current home and new home combined.
Converting your residence to an investment propertyIf your current home has less than 30 percent equity in it, any rental income derived from a tenant is disallowed on your mortgage application for the new home. You must still count the mortgage payment + taxes + insurance as a monthly debt.
In other words, being a move-up buyer isn't as simple as it used to be. New lending rules make buying a new home an exercise in timing and financial planning. And the rules are expected to get tougher, too.
Therefore, if you expect to be a move-up buyer in the next 12 months, consider moving up your timeframe or -- at least -- planning ahead for it.
Understanding the new mortgage landscape and how they can influence your upcoming purchase may be the difference between getting approved for a home loan, and getting turned down.
If you’re debating whether it’s time to become a homeowner, you should know one thing: Housing is currently a great value in the city of Chicago.
Housing prices are dipping across the city, including in some of its top neighborhoods. This means that buyers today can buy more home for their dollars than they’ve been able to for years.
The numbers from the Illinois Association of REALTORS® back me up. According to the association, the median price for a home – including single-family residences, condominiums and co-ops – stood at $222,500 in November. That’s down 23.3 percent from November of last year, when the median price hit $290,000.
These numbers aren’t unusual. The median sale price for a home across the nation stood at $181,300 in November of last year. That’s a drop of 13.2 percent from the median price of $208,000 one year prior.
At the same time, homes aren’t selling as quickly. Home sales in the city of Chicago for November of 2008 were down 41.3 percent to 1,057 sales. In the same month one year earlier, home sales came in at 1,801. This slowdown has left a glut of homes on the market, meaning that buyers not only are paying less for homes in Chicago today, but they have more properties from which to choose.
Don’t expect, though, to steal a home. Sellers may be eager to move their properties, but they still won’t react well to an offer that’s insultingly low. That’s where the value of an experienced REALTOR® comes in. A REALTOR® can help you make a good, solid offer, one that is fair for the property on which you’re bidding.
It’s difficult to get excited about the residential housing market with all the gloom and doom you see on the news. But take a look at the prices out there and you’ll see the truth: If you’re in the market to buy a home, this is a great time to act.
Mario Greco is the #2 full-service residential real estate agent in Chicago. He has sold over $575 million in Chicago real estate since 2002, and leads a group of 8 agents and 9 office personnel.
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