There are plenty of million-dollar-plus homes being sold throughout the Chicago area, according to a recent feature story in Crain’s Chicago Business. And this is good news for the Chicago housing market as a whole: It’s another sign that the Chicago residential real estate market is continuing to strengthen.
According to the Crain’s story, sales of single-family homes priced at $1.5 million or more rose nearly 20% through the first 10 months of this year in the Chicago area. As of the first 10 months of 2014, there were 545 such sales in the Chicago area.
How strong is the high-end real estate market here? Crain’s reported that the 545 high-end sales for the first 10 months of the year are the most for the Chicago area since 2007. Back then, the Chicago market saw 678 homes of $1.5 million or more sell in the first 10 months of the year.
While high-end home sales are on the rise, sales in general in the Chicago area are down. Crain’s reports that total Chicago-area home sales through October are off 7% from where they stood during the first 10 months of 2013.
So the increase in high-end home sales is welcome news. Anything that provides a boost to our local housing market is a positive.
According to the Crain’s story, Lincoln Park has been the busiest market for luxury homes so far this year, registering 88 sales of homes priced at $1.5 million or more through October. This Chicago neighborhood also tied for having the second-lowest amount of high-end housing inventory available, just 9 months’ worth of homes priced at $1.5 million or higher. The Chicago neighborhood of Lakeview also had just 9 months of high-end inventory available.
Overall, the Chicago area through October had 925 homes priced for sale at $1.5 million or more, according to the Crain’s story.
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The Chicago housing market is still in a recovery period. Home sales are down from last year, but the median prices that sellers are fetching when they do sell their properties are on the rise.
And, as a recent story by Chicago Magazine shows, few properties in Chicago demonstrate the ups and downs of the current market quite like Jackson Towers in the city’s Hyde Park neighborhood.
This 19-story high-rise residential tower holds 72 units, and is home, as Chicago Magazine says, to several of the most prominent residents of Hyde Park. But, as the story also says, selling units here has been both lucrative and challenging.
Here’s an example: On the last day of October, a seller sold a 5,200sqft duplex in the building for $960,000. That represents the priciest condo sale ever at this building.
That’s good news, right? Not completely. The sellers had originally listed the unit for $1.3 million in March. This, then, is the downside of selling at Jackson Towers: Many of the condo units that have sold here recently have gone through significant price reductions before finding buyers.
Why? Chicago Magazine points first to large-scale maintenance projects taking place at the tower. These projects often come with special assessments, and those can make potential buyers hesitate. At the same time, the city’s residential housing market, though in recovery mode, hasn’t yet seen prices rise to 2005 and 2006 levels in most neighborhoods – and especially in Hyde Park. This has hurt buyers at Jackson Towers who are hoping to nab larger offers on their units.
Then there’s the fact that Jackson Towers isn’t a new property. There are no pools or roof decks at the building. Buyers, then, often choose newer buildings that boast more modern amenities.
A close look at Jackson Towers is interesting. As the Chicago Magazine story says, it really does highlight the challenges and rewards of selling condo space in today’s Chicago housing market. The bottom line? Sellers can earn big prices for their condos. But it helps if these units are in the right buildings with the right amenities.
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You’re ready to buy property in Chicago. But like most buyers here, you can’t pay for your new dream home in cash. You need a mortgage. And to get one, you need to work with a loan officer who will guide you through the home-loan process.
But how do you find the right loan officer? The good news is that there are plenty of talented and experience mortgage loan officers working in the Chicago market. You just have to shop around – and do your research – to find the right one for you.
Stay away from lenders like Quicken Loans or other national outfits – not because they’re necessarily bad, but because they don’t know the ins-and-outs of lending in our market and often create more work and send you down dead ends before denying your loan for reasons that a local lender would not.
Remember, you’ll be sharing personal information with your loan officer. You’ll tell this professional how much you make each year and how much you owe. You want to make sure, then, that you are working with a mortgage loan officer whom you not only trust but whom you like, too.
This story from financial website Bankrate offers some tips for finding the best loan officers. Your best bet? Schedule interviews with the mortgage lenders who most interest you. And once the interview begins, ask these key questions:
Experience: Ask potential loan officers how long they’ve been in the business. You want to work with someone who has the experience to guide you through what can be a complicated transaction with constantly changing guidelines.
Timing: It can take a long time to close a mortgage loan. Ask loan officers how long it generally takes their companies to close loans. You don’t want to work with a company that keeps you hanging when you’re ready to close.
How many clients? You want a mortgage loan officer who is trusted enough to have a steady stream of clients. But you don’t want your loan officer to have too many clients. Officers who are serving too large of a customer base might not have as much time to devote to you.
Rates and fees: A loan officer won’t be able to definitively tell you what interest rates and fees you’ll face until you submit your financial documents and the lender runs your credit. But your loan officer should be able to give you general information about current interest rates and the fees that a lender charges.
Referrals: Most important? Ask loan officers for a list of past clients. Then call these clients. Ask whether loan officers followed through on their promises, returned phone calls or e-mails quickly and provided top service.
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How hot are apartments in Chicago? Consider this news from Crain’s Chicago Business: A Chicago landlord is selling a key apartment building in downtown Chicago’s Streeterville neighborhood for $74 million. That’s more than twice what the company paid for it in 2012.
This counts as positive news even for the owners of single-family homes or condominiums in or near downtown Chicago. It shows just how hot these inner-ring neighborhoods are, and how much of a draw they continue to be for new residents.
If you need to sell a home in one of the busy neighborhoods surrounding downtown Chicago — places like River North, Lakeview, Lincoln Park, Streeterville or the West Loop — you can expect plenty of demand for property that is priced right.
According to the Crain’s story, Waterton Associates is selling the Seneca apartment building in Streeterville to Emmes Asset Management, a real estate investor from New York City. The 16-story building at 200 E. Chestnut St. is a well-known structure in the Streeterville neighborhood.
Crain’s reports that the sale should close by the end of the year. When it does, Waterton will enjoy a big profit. According to the story, Waterton Associates paid $35.6 million to buy the 254-unit Seneca in March of 2012. Back then, the property was a hotel-apartment building. Crain’s reported that Waterton spent about $6 million to renovate the building and turn it into a more traditional apartment building.
Crain’s says that Waterton isn’t the only investor in Chicago apartment buildings that is making a big profit these days. Downtown apartments are hot, with low vacancies and high rents. The reason? People like to live in or near downtown Chicago. There are plenty of restaurants, shops, bars and theaters here, so there’s plenty to draw in new residents.
And this should make you particularly happy if you own a home in this area. When it’s time to list and if you’re priced right, you should expect to generate plenty of solid offers.
The MG Group is an award winning residential real estate group that has been ranked #1 IN ILLINOIS & TOP 40 IN THE NATION since 2011 by The Wall Street Journal & in Real Trends’ THE THOUSAND TOP REAL ESTATE PROFESSIONALS. The MG Group is also recognized as a LUXEHOME 25 by Top 25 Luxury Broker in Chicago and FIVE-STAR REAL ESTATE PROFESSIONAL by Chicago Magazine. SHARE THIS POST & FOLLOW US NOW ON:
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It’s long been a debate: Does it make more financial sense to rent an apartment or own a home? I’ve long argued that owning a home is a better financial move. And now there’s even more evidence supporting this.
The National Association of REALTORS® (“NAR”) recently released its latest rental-rate forecast. And according to NAR, apartment rents are expected to rise significantly throughout the country in 2015.
According to the forecast, it remains a landlord’s market. This means that strong demand for rentals makes it ever easier for landlords to raise the rents they are charging.
The forecast predicts that rents across the country will likely rise 3.9% in 2015. And renters shouldn’t expect relief any time soon. NAR predicts that vacancy rates for rentals will remain low for at least the next two years.
NAR predicts that apartment rent hikes will easily outpace inflation next year.
What’s this mean for the old rent-vs.-own debate? Only that owning a home — especially with interest rates still so low — is more affordable today when compared to renting an apartment unit, especially in a desirable major city such as Chicago.
Of course, price alone isn’t the only reason to choose renting or owning. You have to consider several other factors, too. If you only plan on living in a city for a few years, renting might make more sense. If you plan on starting a family you might need the extra space afforded by a single-family home. If you’re looking at your home as an investment, buying a condo or single-family home in Chicago might be the right choice.
But based purely on financial reasons, owning appears to be the wiser choice today. And as apartment rents continue to rise in Chicago and other major U.S. cities, this is a trend that doesn’t look ready to change any time soon.
The MG Group is an award winning residential real estate group ranked #1 IN ILLINOIS & TOP 40 IN THE NATION since 2011 by The Wall Street Journal & in Real Trends’ THE THOUSAND TOP REAL ESTATE PROFESSIONALS. The MG Group is also recognized as a LUXEHOME 25 by Top 25 Luxury Broker in Chicago and FIVE-STAR REAL ESTATE PROFESSIONAL by Chicago Magazine. SHARE THIS POST & FOLLOW US NOW ON:
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