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Webster Square a Good Test for Chicago’s Condo Market

Webster Square a Good Test for Chicago’s Condo Market

Webster Square a Good Test for Chicago’s Condo Market

Looking for more evidence that Chicago’s housing market is firmly in rebound mode? Webster Square in Chicago’s Lincoln Park neighborhood provides it.

According to a recent story by Chicago Magazine, construction work has started on a 100-unit condominium project at this site, which was once home to the long-vacated Lincoln Park Hospital campus at Webster and Lincoln avenues.

And this follows the opening of 75 apartments in the hospital campus’ seven-story administration building in early June of this year. The condos will occupy a neighboring 12-story hospital building, according to the Chicago Magazine story.

This is good news for the surrounding neighborhood. Lincoln Park hospital abandoned the site in 2008. This left behind 3 acres of empty spaces spread out over six vacated buildings. In all, the hospital left behind 600,000sqft.

No one wants to live next to such a large empty space. It’s a blight. But the new residential activity taking place here is a decided improvement.

So far, renters have flocked to the former hospital campus. The Chicago Magazine story says that the luxury apartments here are now 90% occupied. The apartment building features some nice amenities, including a top-floor gym, party room and green rooftop deck. The second floor of the project features business rooms.

The condo portion of the project stands to be even more interesting as it will serve as a good test of the strength of Chicago’s recovering condo market. As the story says, the only larger condo project that has broken ground since the Great Recession is the 1345 South Wabash condo development.

Will the new condos at Webster Square fill up? Is there enough demand for new condos to justify the addition of 100 new units to Chicago’s North Side? These questions will be answered soon enough. But now this: The cost of renting an apartment in Chicago neighborhoods such as Lincoln Park continues to rise. This should make condo living even more attractive to those who want to live in the city’s most-desirable neighborhoods.

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:

 

Spoken by Mario Greco | Discussion: Comments Off

An Uncertain 2015

An Uncertain 2015

An Uncertain 2015

The number of homes sold each month in Chicago continues to drop. And as Chicago Tribune real estate writer Mary Ellen Podmolik writes, that is creating an uncertain market for both buyers and sellers.

Podmolik cites the latest sales numbers from the Illinois Association of REALTORS®. According to IAR, when home sales fell again in August, it marked the eighth consecutive month-over-month drop in sales in the city of Chicago.

What does 2015 hold? According to Podmolik’s story, home sellers and buyers should expect an uncertain market, fueled in large part by the sluggish number of home sales in the city.

Podmolik points to move-up buyers, those buyers ready to sell their existing homes and buy larger ones. On the positive side, home prices have slowly but steadily increased since the housing bust. This means that more potential move-up buyers now have equity in their homes. This could encourage them to enter the housing market in 2015, providing a boost to Chicago home sales.

On the negative side, many of today’s potential move-up buyers have refinanced their mortgage loans to ones with historically low interest rates. According to the Tribune story, mortgage interest rates on 30-year fixed-rate loans are expected to move closer to 5% by the second half of 2015. Although still incredibly low, a rise to 5% represents an over 40% increase in the rate they are likely carrying. This might come as a shock to homeowners who today are blessed with rates closer to 3.5% on 30-year fixed-rate mortgage loans. The higher interest rates might keep potential buyers from seeking their move-up homes.

Podmolik cites numbers from Zillow saying that rising interest rates could result in about 100,000 fewer home sales by the middle of 2015. Zillow predicts, too, that these rising rates could mean more than 200,000 fewer home sales by the later stages of 2017.

Then there’s the case of the large number of Millennials who are now renting. No one knows yet when these renters will want to become buyers. As the Tribune story says, no one knows, either, if these Millennials will be able to qualify for mortgage loans should they even want to buy.

So the future of the residential real estate market looks hazy today. What will 2015 hold? Looks like we’ll have to wait to see.

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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Renting Out Your Chicago Condo Can Put Extra Dollars in Your Pocket…Maybe

Renting Out Your Chicago Condo

Renting Out Your Chicago Condo

The number of Chicago condo owners who are renting out their units is on the rise, according to a recent story by Chicago Magazine.

And why not? People want to live in downtown Chicago and its surrounding neighborhoods. And renting out their units is a good way for Chicago condo owners to earn an extra stream of income.

But the Chicago Magazine story does come with a warning: If you want to rent out your condo, you need to first understand any restrictions enacted by your condo association.

First, here’s a look at just how many Chicago owners are renting out condo units today. The Chicago Magazine story cites numbers from Appraisal Research Institute that say that in the second quarter of this year, renters signed for lease an impressive 2,008 condominium units in downtown Chicago. For some perspective, note that this figure is higher than in any other quarter in the past decade.

There’s a reason for this: Condo owners can make some serious income by renting out their units. The Chicago Magazine story says that the average downtown residential rent-per-square-foot has jumped to $2.78 today, up from $2.17 just five years ago.

Renting out a condo unit, though, does come with challenges. According to the story, many condo associations have enacted strict regulations that make renting out units a more difficult task. The story estimates that about 50% of condominium buildings in the city have regulations that limit how owners can rent their units. Chicago Magazine cites 600 North Fairbanks in Chicago’s Streeterville neighborhood as an example; In 2011, the condo association voted that no more than 27% of the units in this building could be rented out. The magazine says that other buildings force buyers to occupy their units for a set number of years before they can rent them.

The message, then? Renting out your Chicago condo unit can put more money in your pocket. But before you count your dollars, make sure that restrictions don’t make doing so an impossible task.

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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Demand for Condos, Apartments High in Downtown Chicago

 

Demand for Condos, Apartments High in Downtown Chicago

Demand for Condos, Apartments High in Downtown Chicago

It seems as if everyone wants to live in downtown Chicago today. This isn’t surprising: The city’s center, and its surrounding neighborhoods, offer plenty of boutique shops, restaurants, theaters, bars and parks. Why wouldn’t people, young and old, want to live in this part of the city?

The good news if you already own a condominium in this part of Chicago? Demand for residential space in downtown and the neighborhoods connected to it doesn’t seem ready to wane.

Crain’s Chicago Business proved this with a recent story detailing the early plans for a huge apartment tower in the city’s Loop.

CIM Group, which is the owner of the Block 37 shopping mall in downtown Chicago, has secured the first permits it needs to build a 34-story, 690-unit apartment tower on the top of the four-story mall that it owns. The tower will rise across the street from the Macy’s store on State Street, according to Crain’s.

According to Crain’s, the new apartment tower will be the largest rental building by number of units in the city’s central business district in several years. The project will also rank as the largest rental building in the entire downtown market since the 848-unit Alta at K Station opened its doors in 2010.

Some worry that the city’s downtown market might be seeing too many apartment buildings these days. But so far, demand for rental units in and around downtown has remained strong.

CIM Group’s plans for downtown Chicago show me that the city’s residential real estate market remains a hot one. People still want to live in downtown Chicago and the neighborhoods surrounding it. This is a trend we see across the country: People are moving from the suburbs and into the center of big cities.

This, of course, is good news for anyone who already owns a condo unit in the center of Chicago. I can’t predict whether your condo’s value will rise. No one can do this. But as long as demand for downtown and urban living remains high, real estate in areas like downtown Chicago will remain a sound investment.

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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Foreclosures Still Hurting Chicago

Foreclosures Still Hurting Chicago

Foreclosures Still Hurting Chicago

Foreclosures and short sales continue to be a problem in the Chicago area, according to a recent story by Crain’s Chicago Business .

According to the story, Illinois in July had the country’s fifth-highest percentage of home sales that were considered distressed — sales that were either foreclosures or short sales. Crain’s cited numbers from RealtyTrac showing that distressed sales made up 18 percent of July home sales in Illinois. Only Nevada, Florida, Arizona and Michigan had a higher percentage of distressed home sales during the month.

Across the nation, distressed home sales made up just 13.6 percent of all home sales in July. This shows how much of a problem foreclosures continue to be in Chicago and Illinois.

Foreclosures, of course, can cause prices in an entire neighborhood to drop. Consider this example: You’re selling a home for $250,000. Unfortunately, a similar home at the end of your block is in foreclosure. That home is selling for $190,000. The odds are good that buyers will choose the foreclosure home.

If you have too many foreclosure homes in your neighborhood, you’ll have to lower your own asking price to compete for buyers. Today’s home buyers, after all, aren’t going to spend more on a home just because it isn’t in foreclosure.

The foreclosure numbers are even worse in the Chicago area itself. The Crain’s story points to numbers by Midwest Real Estate Data charting short sales and lender-sold foreclosure sales. According to these numbers, distressed sales accounted for 20.6 percent of home sales in July in the nine counties of the Chicago area. That number is too high. The good news? It’s the lowest that figure has been since January of 2011, according to the Crain’s story.

The truth is, until the Chicago area sees a smaller number of foreclosures and short sales, the city’s housing market will continue to be held back. Yes, the city’s housing market has shown steady improvements. But the improvements could be even stronger if there weren’t so many distressed sales holding back the momentum.

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:

Spoken by Mario Greco | Discussion: Comments Off

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