Monthly Market Stats - Mar 08

Based on currently available home inventory and units which closed in the month of March, below you'll see the current amount of housing supply in various Chicago neighborhoods. Note the significant decrease in overall market supply from February. Next to each neighborhood, I am indicating whether the supply has increased or decreased from February. The information I'm including is based on attached housing (condos/town homes). If you'd like another type of information, please contact me and I'd be happy to help.

Loop = 4 month supply on market (decrease)

Lakeview (includes Wrigleyville, Southport Corridor, Boystown) = 7 mo (decrease)

Lincoln Square = 7.5 mo (decrease)

North Center = 8 mo (decrease)

Lincoln Park (includes Depaul area) = 8 mo (decrease)

Uptown = 9 mo (decrease)

Near South (includes South Loop, Printer's Row) = 9.5 mo (decrease)

West Town (includes Wicker Park, Ukrainian Village, Humboldt Park) = 10 mo (increase)

Logan Square (includes Bucktown) = 11.5 mo (decrease)

CHICAGO ENTIRE MARKET = 11.5 mo (decrease)

Near West (includes West Loop, Medical District, Tri-Taylor) = 11.5 month (decrease)

Near North (includes Gold Coast, River North, Streeterville, River West, Old Town) = 12 mo (increase)

As you can see, all but two neighborhoods decreased in amount of supply for March. Before you dust off your high school economics book, I'll just tell you what this means:

1) You won't see price drastic reductions as frequently as you have seen the past year

2) There are less options for buyers

3) There is less competition for sellers

4) If you're a buyer waiting for prices to "hit rock bottom"... you already missed it. Start your search now before the supply shrinks even more.

Read Me, I'm Irish

Well... it's that time of year again. In Chicago things start to get a little crazy in March. It's that time of year when we're almost over that last bump in the rollercoaster ride we call winter... spring break is just around the corner and once in a while we get a glimpse of the sun again. We are teased by a day here or there above 50 degrees, to be followed by snowfall the day after. Basketball season takes a very serious turn as March Madness begins, and most importantly we begin a 2 week celebration for a one day holiday... St. Patrick's Day.

One thing you cannot miss if you live in, around, near, or even far from Chicago is the annual South Side Irish Parade. Unfortunately - and I hate to say it - I am missing it this year. Since my job requires me to usually be working on Sundays, I unfortunately can't partake in this year's green-clad, bagpipe-playing, luck-'o-the-irish vibed, all day drink-a-thon. But I have been before so I can assure you it's well worth your while, even if you're not Irish.

You'll find the parade in Chicago's historic Beverly neighborhood. If you're going for a family outing and will be attending with the little ones, stick to the east side of the street. Head west and you're in for a rowdy ride.

The Beverly area is a unique icon in the City's landscape due to its large lot sizes, numerous single family homes, neighborhood feel, rolling hills, and of course its abundance of Irish pubs. The strong Irish-American population and heritage in the area is what has drawn the country's largest neighborhood parade.

Well, I hope you made it to the parade today, and if so, I imagine you won't be reading this post anytime today. If you're like me and were unable to go, I suggest you polish up your blarney stone and get ready to make up for all you missed next weekend when you celebrate St. Paddy's with a night (and day) on the town.

[The first photo is of my Uncle Ed Kane of the Emerald Society in the 2007 South Side Irish Parade, of course taken from the west side of the street :-) ]

MONTHLY MARKET STATS - FEB 08

Based on currently available home inventory and units which closed in the month of February, below you'll see the current amount of housing supply in various Chicago neighborhoods. I'll continue to update this each month so you can see the market dynamics. The information I'm including is based on attached housing (condos/townhomes) . If you'd like another type of information, please contact me and I'd be happy to help.

Loop = 9 month supply on market

West Town (includes Wicker Park, Ukranian Village, Humboldt Park) = 9 mo

Near North (includes Gold Coast, River North, Streeterville, River West, Old Town) = 10 mo

Lakeview (includes Wrigleyville, Southport Corridor, Boystown) = 10.5 mo

Uptown = 12 mo

Near West (includes West Loop, Medical District, Tri-Taylor) = 12 month

Logan Square (includes Bucktown) = 13 mo

Lincoln Square = 13 mo

CHICAGO ENTIRE MARKET = 13 mo

Near South (includes South Loop, Printer's Row) = 14 mo

North Center = 15 mo

Lincoln Park (includes Depaul area) = 16 mo

What the market supply means: at the current rate at which homes are closing sale, it will take X months for all of the homes currently on the market to be sold & closed. This is an indicator of the current DEMAND for attached housing in these neighborhoods. You can compare these statistics to future months to help you understand how demand is changing over time.

For information on the boundarylines of each of these neighborhoods, good old Wikipedia should help: http://en.wikipedia.org/wiki/Chicago_neighborhoods

Market Stimulus

Part of the economic stimulus package that President Bush signed into law last week is going to positively impact the real estate market. In addition to the tax rebates many individuals can expect to receive in the springtime, there is another benefit of this package that is more directly related to real estate.

Fannie Mae and Freddie Mac are government sponsored enterprises that help keep the mortgage market liquid by purchasing mortgages from banks & lenders; they then sell those mortgages to investors. This keeps the lending institutions from "running out of money to lend" and allows them to continue to provide financing to homebuyers like you and me. Fannie & Freddie currently cap the size of the loan they will purchase at $417,000. Part of the economic stimulus package is to increase this "conforming loan" size to $729,750. These "jumbo" loans usually draw higher interest rates, but with the passage of the law, interest rates on these larger loans are expected to decrease.

NAR forecasts that the increase in the conforming loan limit will result in:

~500,000 refinanced loans and could help reduce foreclosures by as much as 210,000

~300,000 additional home sales potentially generated

~reduced housing inventory

~home price increase by 2-3 percentage points

Additionally, part of the plan is to increase the size of FHA-backed loans to the same limit of $729,750 from a previous $362,790. FHA provides insurance on various loans and is backed by the U.S. Dept of Housing & Urban Development (HUD). The insurance on these loans allows more homeowners to purchase homes with low or no downpayment due to the decreased risk to the lender. Increasing the loan size limit on these loans will make home purchases more affordable for many.

Just Listed! Gold Coast!

1br/1ba in coveted Newberry Plaza in the heart of the Gold Coast! $289,900.

The Real Estate Papparazzi #3

At least not everyone is hesitant to invest in the real estate market today. The most saavy investors realize that the "buy low, sell high" adage applies right now to the housing market. Anyone who is waiting for "prices to hit rock bottom" already missed it.

Shares of the S&P Homebuilders Sector Spider (XHB), an ETF of the largest public residential homebuilders has risen 7% this year! In a year when house prices are down about 4% for the Chicago area and much more in other parts of the country, a 7% increase in real-estate derived investments is a serious sign of what's to come!

Just Listed! Edgewater Neighborhood!

SUNNY, SPACIOUS & BEAUTIFUL 2 bed/1 bath near the lake and beach for $195,000! Click HERE for more info!

Please Refer to...

My line of business is heavily reliant on referrals. So for my post today I am going to refer you to someone else's blog post that I think will be interesting to anyone curious about the real estate market's affect on the availability of financing.

http://www.themortgagereports.com/2008/02/how-the-declini.html

Transfer Taxes for Transportation

If you live in Chicago, you're sure to be familiar with the hotly debated CTA funding issue. The City has threatened to raise fares and cut bus routes if they don't get the additional funding they need. So on Feb 6, next week, the Chicago City Council will be voting whether to raise the city's real estate transfer taxes in order to fill the transportation funding gap.

The vote is for a 40% increase in the real estate transfer tax. This would mean that buyers of real estate would pay $10.50 in taxes per $1,000 of each real estate transaction, compared to the $7.50 that they currently pay. For a $200,000 real estate purchase, this would increase the transfer tax by $600 to $2100!

Why would we increase real estate taxes by 40% in order to fund transportation? The tax will actually be funding CTA pensions and retiree health care plans. The tax won't add a single additional bus or train line or pay for upgrades or maintenance. The market is already struggling to come up with enough buyers to absorb the supply of housing... why make it even more difficult?

Visit http://wrongtax.com/ to voice your opinion on this issue or contact your alderman.

The Real Estate Paparazzi #2

Some updates on much-anticipated Chicago downtown developments:

Trump International Hotel and Tower: Today's opening of the 92 story luxury development on the Chicago River at Wabash may be picketed by the hotel workers' union Local 1 of UNITE HERE. Five floors of the building will be staffed by 300 workers. Hotel officials and Local 1 have failed to come to agreement on whether the hotel's workers will be allowed to decide if they'll be a part of the union.

The Spire: Just two weeks ago sales opened on the over-1000 unit, 150 story building expected to be completed in 2012 at 400 N Lake Shore Dr. Prices range from $750,000 to $15 million, starting at about $1400/square foot. Expectations are that nearly half of the buyers will be from overseas. The low value of the U.S. dollar to many foreign currencies is sure to help meet that expectation. Construction of the building is still in a sub-ground phase where workers are drilling foundational supports into the ground.