Tuesday, February 23, 2010
Time is Running Out on Fed Tax Credit for Homebuyers
3:00 pm cst
Time is running out of the federal tax credit for first-time and repeat homebuyers.
First-time homebuyers can receive a tax credit of 10% of your home purchase price up to $8,000.
Current homebuyers can get a tax credit of up to $6,000 if you have owned and occupied your current residence
for five consecutive years out of the last eight years and you decide to buy a new home.
qualify for either of these tax credits, you need to act now. You must have a contract in effect no later than April 30, 2010
and close no later than June 30, 2010. Qualifying buyers can purchase a property with a maximum sales price of $800,000.
Saturday, February 20, 2010
Mortgage Rates Near Record Lows
Freddie Mac is reporting record lows in mortgage rates once again!
4:56 pm cst
average 30-year, fixed-rate mortgage slid to 4.93 percent from 4.97 percent last week. The record low is 4.71.
The average 15-year, fixed-rate mortgage dipped to 4.33 percent from 4.34 percent.
Five-year, adjustable-rate mortgages dropped to an average 4.12 percent from 4.19 percent, and
one-year ARMs averaged 4.23 percent, down from 4.33 percent.
Wednesday, February 17, 2010
Condo Market Shrinks Again
8:03 pm cst
Chicago's downtown condominium market shrank for the second straight year in 2009 as meager sales
forced developers to put construction plans on hold, said a report released Thursday according to the Chicago Sun-Times.
Appraisal Research Counselors said 572 condo units sold downtown last year, the lowest number since
the company began keeping track in 1997. It also said developers of 1,041 future units canceled construction plans during
the year as several factors drove buyers from the market. They include job loss, inability to get a mortgage, or lack of confidence
in condo valuations.
For 2008, the Chicago-based firm reported 592 condo sales downtown
and 2,520 other units being erased from the market. The numbers illustrate a marked slowdown from a decade that saw Chicago
post an average of about 4,000 condo sales per year.
But other numbers in the report
point to a stabilizing market. Buildings that are geared to first-time buyers and quote prices at about $290 a square foot
are drawing the greatest interest and will lead a market recovery, said Gail Lissner, vice president at Appraisal Research.
That compares with prices of about $390 a square foot a couple of years ago, Lissner said. Also,
the supply of new units is expected to slow to a trickle.
She said that while only 572
new sales occurred, her company counted about 1,900 closings, mostly from deals initiated before 2009.
Also, 15 buildings that delivered new condos in 2009 have fared well in the marketplace, reporting an average
of 67 percent of their homes sold, Lissner said.
She said the federal housing tax credit,
due to expire May 1, has supported the market. But Lissner said long-term gains in sales numbers and prices will require sustained
improvement in consumer confidence.
"You have to have price stabilization before
you get price appreciation," said Marty Paris, president of Sedgwick Properties Development Corp. After hearing the report
summarized at a downtown luncheon, Paris said, "Everything I've seen points to a measurable uptick."
The research is drawn from Appraisal Research's surveys of downtown developers, many of which are
clients of the firm.
Included in the report was a review of average sales prices in 40
large condo buildings, all downtown or on the North Side. The study found that on average, prices in the buildings declined
10 percent in 2009 vs. 2008. Compared with 2005 data, the average decline was 6 percent.
said six condo buildings representing 1,200 units will open downtown in 2010 and their developers are reporting 54 percent
are under contract. The new buildings include One Museum Park West at 1201 S. Prairie and Walton on the Park at 1 W. Walton.
Friday, February 5, 2010
Chicago Foreclosures Skyrocket in Fourth Quarter
11:58 am cst
More Chicago-area homeowners defaulted on their mortgages during the
final three months of 2009 than in any other quarter since the housing crisis began in 2006.
The year-end figures, scheduled to be released Thursday by the Woodstock Institute, paint a picture
of a local housing market brutalized by foreclosures over the past three years. Last year, more than 70,000 homeowners in
the six-county area, including 24,053 in the fourth quarter alone, received initial notices of mortgage defaults, the first
step in the foreclosure process, and those defaults increasingly were in more affluent neighborhoods, the report showed.
What the data doesn't show, but what is widely predicted, is that there will be no slowdown
in foreclosures this year. Despite almost yearlong efforts to stem the tide of foreclosures, high unemployment rates are causing
more homeowners to miss mortgage payments. Some observers expect both the number of people in foreclosure and the number of
vacant properties on the market to increase as consumers fall out of loan mitigation programs and lenders release their foreclosure
inventory onto the real estate market.
"Lenders are continuing to proceed with
foreclosures while also trying to negotiate, in theory, the loan modifications and do the trial mods," said Geoff Smith,
Woodstock senior vice president. "My sense of what's going to happen is the economy is still weak, you still have the
underwater homeowner issue, and there's concern that any modest recovery of the housing market will go away with the [homebuyer]
Woodstock found that for Chicago, initial foreclosure filings
increased by 10.2 percent, but the activity varied widely by neighborhood. Some of the largest percentage gains last year
were in Lincoln Park, up 103 percent; Near South Side,
up 46 percent; and Near North Side, up 37 percent.
At the same time, some
of the communities hardest hit by the first waves of the foreclosure crisis — neighborhoods such as Austin, Hyde Park,
Auburn Gresham and Englewood — reported fewer foreclosure
filings last year than in 2008.
"In '06, '07 and early '08, the main driver was badly written loans,"
Smith said. "As those loans cycle out of the system through the foreclosure process, the economy hasn't improved, you
see that [unemployment] is maybe more of a factor."
At the end of October,
almost 10.5 percent of mortgages in Illinois were at least one month past due but not yet in foreclosure, and another 10 percent
of loans were in foreclosure and at least 90 days delinquent, according to the Mortgage Bankers Association.
For the entire Chicago Tribune article, click here.
Wednesday, February 3, 2010
Positive Signs for the Real Estate Market
12:12 pm cst
Today's Sun-Times had some positive news about the real estate market - which is always nice to read!
I'm reprinting it below:
The number of people preparing to buy a home rose slightly in
December, a positive sign heading into the spring home buying season.
Association of Realtors said Tuesday its seasonally adjusted index of sales agreements rose 1 percent from November to December
to a reading of 96.6.
The index has risen for nine out of the past 10 months as buyers
work to take advantage of an $8,000 first-time homebuyer tax credit.
In addition, homebuilder
D.R. Horton reported its first profit in three years, raising hopes that one of the weakest parts of the economy is improving.
The signs of strength in the housing market pushed the Dow Jones industrial average to its second
straight gain of more than 100 points.
For the article on the Sun-Times site, click here.
Monday, February 1, 2010
Eight Tips to Selling Your Home
2:50 pm cst
The Chicago Tribune had a great article on selling your home and I've decided to reprint the tips
here again for my readers:
1. Don't wait for a recovery
values aren't likely to rebound to previous highs for several years; perhaps even a decade. While you may face a loss by selling
now, that negative figure may only be a paper loss, particularly if you've owned your home for some time.
2. Make improvements
If you have access to credit, invest in improving
and repairing your home before placing it on the market, rather than trying to go for a quick as-is sale. Rehabs are more
affordable now, thanks to the availability of low financing, reduced construction materials costs and lower contractor charges.
Focus on upgrades to kitchens and bathrooms, especially counters and cabinets, as these yield the highest returns. Get three
different estimates from contractors and add another 10 percent for unexpected costs. See Yahoo-RealEstate's strategies and
checklist for upgrading and repairing your home at realestate.yahoo.com/Realtors/Ready-to-Sell_Checklist.html.
3. Hire professionals
You need professionals, not
friends or relatives, to repair, upgrade and sell the biggest investment you'll likely own. Your real estate agent should
be well-connected with other agents, lenders and industry professionals. Ask for credentials, references and a history of
Your appraiser should have at least five years' experience with an
appropriate license or certification. Avoid any conflict of interest by not relying on your real estate agent's recommendation.
The same applies to hiring a home inspector. Talk to at least two or three appraisers and inspectors before selecting one.
4. Get down-payment assistance
Federal and local governments offer several
down-payment assistance programs for first-time homebuyers. Look for other city, county and state programs that will piggyback
on federal programs for assistance. Search for "down-payment assistance programs" with the name of your region.
5. Take Uncle Sam's help
The $8,000 first-time homebuyer tax credit program
that helped jump-start the real estate market in 2009 has been extended into 2010 and expanded. First-time homebuyers qualify
if they sign a binding contract to purchase a home by April 30 and close by June 30. The program's maximum income limits have
jumped from $75,000 to $125,000 for individuals and from $150,000 to $225,000 for couples.
separate $6,500 tax credit has been added for those who have owned their homes for at least five years and want to upgrade
to a new home. Homeowners drowning in their present real estate loans are eligible for a loan-modification program with their
current mortgage company or loan service through the Making Home Affordable Program.
Listings move when a property is appropriately priced. Others gather
dust because the owners haven't adjusted their expectations to the present market. This doesn't mean, however, you should
severely drop your price on a well-maintained home to avoid extended problems. Research your market and price accordingly.
7. Energy tax credits
Through Dec. 31, homeowners who buy and install specific
energy-efficient windows, insulation, roofs, doors and heating and air-conditioning equipment can apply for a 30 percent tax
credit of up to $1,500 of their costs on each product.
Go one step further and earn a 30
percent tax credit through 2016 (without a spending limit) when you purchase such energy-saving products as solar energy systems,
geothermal heat pumps, small wind systems, residential fuel cells and micro-turbine systems. Visit EnergyStar's Federal Tax
Credits for Energy Efficiency (energystar.gov/index.cfm?c=tax_credits.tx_index ) for a complete summary.
8. It's not personal
want to imagine themselves in your house for years to come. Excess decor and knickknacks distract from this vision. Ask your
real estate agent's advice or hire a home stager to bring your house back to zero before beginning to show it. A general rule
of thumb is to eliminate or store at least half the items in every room.
Don't get defensive
about colors, design patterns or flooring you installed. Just grit your teeth and think of the closing check while your agent
serves as a buffer. Remember the customer is always right, unless, of course, they're low-balling you.