Arts, Gardens, Food & Wine

Summer is making it's way to Chicago. Here's are some great events to catch all season long!

Arts, Gardens, Food & Wine

June
Now - October 11 Boeing Galleries Millenium Park A conversation with Chicago: Contemporary Sculpture from China

Now- October 25 Real Pirates Exhibit at the Field Museum

2 Tuesdays on the Terrace Jazz concert series at the MCA

2 Music at Millenium Park

11 Summer Dance Chicago-at the Spirit of Music Garden in Grant Park

13-14 35th Annual Wells Street Art Festival

19-21 Taste of Randolph

July11- September 20 A Case Study From Tut to Today

12 Roscoe Village Garden Walk

18-19 Sheffield Garden Walk

19 Dearborn Garden Walk

19 East Lakeview Garden Walk

25-26 Chicago Antique Market

August
29-30 Chicago Antique Market

September
11-12 Windy City Wine Festival

12-13 Wine Crush in Od Town

26-27 Chicago Antique Market

October
24-25 Chicago Antique Market

Bucktown and Lakeview markets are begining to Twitch

We are nearly half way through this year, and the real estate market has started to twitch with activity. The neighborhood market reports reflect some of the lowest sales volumes most of us have ever seen, even for a first quarter. The reports speak for themselves, but I’ll add that I was impressed by the sales volume for Bucktown/Wicker Park. Our local market has started to see some activity, which will begin to show up in the second, third and fourth quarter reports.

Posted here are the sales statistics for condominiums and town homes listed on the Multiple Listing Service in Lakeview, Lincoln Park, Bucktown and Wicker Park. Additionally, you will find data from CAR (Chicago Association Realtors) which includes buildings of all ages and sizes.

While regulations on lending have gotten more rigorous, loans are still available and interest rates continue to be great, hovering around five percent. Some qualified buyers are contemplating FHA financing, especially first time buyers with low down payments. It is by far a buyer's market which will likely continue through the year or 18 months, as this 'market correction' settles in.

Home sellers are on the market for many of the same reasons they usually are: job change, marriage/divorce and birth/death. Those who are considering upgrading to their next home (well positioned financially in their current home, or not), are smart to recognize the value of buying a home for far less, and acknowledge that they may not sell their home for as much as they would like. They will benefit from a nicer home that they can live in longer with relatively lower property taxes and closing costs, as those are impacted by the sale price.

While at this point there aren't many foreclosures in these areas, short sales are a bit more common. Great deals can be found. In the new construction realm, some builders are faced with high interest rates on their construction loans and high carrying costs. Many builders are willing to do more 'soft cost' upgrades, in addition to taking less than they are asking.

Contact me for your own market analysis or comprehensive statistics throughout the city for single family homes, multi-unit buildings, condominiums and town homes.

If you are looking to buy, sell or debating which direction to go, give me a call 800-561-2242 or 312-953-7811.

Part 4: The Market from the Eyes of a Loan Officer

Part 4 of this series of interviews with respected professionals working in the Chicago real estate market is from the perspective of loan officer, Ken Dickerson of RWF Mortgage.

Ken Dickerson has been in the sales profession since 1984 in a variety of sales, sales training, and management positions mostly in the printing industry. In 2001 he turned to the mortgage profession as a loan officer, with RWF Mortgage, an affiliate of Wells Fargo, for over 3 years.

Q. Depending on who you talk to, the Chicago real estate market is in a state of flux or a total standstill. Where is most of your business coming from now? Refinance? Job Relocation companies? New purchase? Banks?

A: From mid November until late January a majority of my business has been refinance business. Beginning late January 90% of the business is new purchase business.

Q: What are today's biggest challenges? Have you seen any positive changes as a result of this market correction?

A: The biggest challenge is keeping up with all of the guideline changes and trying to communicate the changes to clients that had previously been pre-approved. The changes have been a reality check for prospective purchase and refinance customers. It's hard to go backwards after borrowing money was so easy for several years and some clients really struggle with it.

Q: We've been going through a huge new construction boom here. Thoughts on the Spire, Trump Tower and other big ticket projects? Do you think the hotel/condo format will be sustainable in Chicago? How long do you think it will take to all be absorbed?

A: With the tightening of lending guidelines the new construction developments will take a hit until they are complete. It will be very difficult to obtain financing on the industry identified higher risk structures such as uncompleted developments or hotel/condo combinations.

Q: With new regulations, what has changed with lending? How much are buyers required to put down? How do you see the new stimulus package taking effect with regard to new loans and existing loans? With this week's news, have you seen a bump in purchase loan applications?

A: I'm afraid to answer this string of questions because as soon as I do the guidelines could change. While credit rating has always been a key component of the financing picture it is now a major factor in interest rate and obtaining a loan. No longer can you secure no income, no asset loans as everything is full documentation. Even with the full documentation you could be required to show an audit trail of any large deposits in any of your asset accounts, and explain and credit check activity that shows on a credit report over the past 90 days. You still have low down payment options with FHA at 3 1/2% however; FHA can be restrictive when it comes to condominiums. Other than that for conventional conforming loans you currently need a minimum of 10% down payment. Just recently a majority of banks are requiring a 30% down payment and a minimum credit score of 720 to obtain a jumbo loan.

I have seen an increase in purchase applications but it's more to do with the time of year than anything else at this point.

Q: With new construction what hurdles are you encountering? How have investors been affected? How are commercial loans affected?

A: New construction guidelines are changing to 70% units either sold or under contract to obtain financing. Again, this reflects the high risk associated with new construction condos by the banking community. Investors will need a substantial down payment and the guidelines are also becoming more restrictive on the % of units in the development that can be investor owned.


Q: Real estate is local. Which neighborhoods are you busiest in? Are you writing more loans for single family homes doing better than condos?

A: In the Chicago market we will always be writing a large number of condo loans. In Chicago single family homes usually require a jumbo loan and until lately the only rate that was worth considering was the 5 year ARM. Just recently the 30 year fixed has dropped and with a 30% down payment and a 720+ FICO score you can get a very good rate. I have always been busiest with the Lincoln Park and Lakeview neighborhoods and that hasn't changed. I have seen more activity in the Lincoln Square, Ravenswood, and Roscoe Village neighborhoods as well.

For more information about Ken, questions about mortgages or to hire him as your lender, contact him directly at kenneth.b.dickerson@rwfmortgage.com or 773-572-6540.

Part 3: The Market from the Eyes of a Real Estate Appraiser

The series continues with a broader perspective than just my own, I have interviewed other respected professionals working in the Chicago real estate market. Part 3 of this series is reflecting the market from the eyes of an appraiser, Kevin Maloney.

Maloney Appraisal has been located in Lincoln Park since 1963 and Kevin Maloney has been president since 1987. The firm provides over 1,500 appraisals a year. These appraisals are typically on behalf of lending institutions such as the Northern Trust and JP Morgan Chase. The firm has particular expertise on the City’s north side neighborhoods.

Q: Depending on who you talk to, the Chicago real estate market is in a state of flux or a total standstill. Where is most of your business coming from now? Refinance? Job Relocation companies? New purchase? Banks?

A: The majority of our business has always come from Banks. The recent work has been dominated by residential refinance activity and unfortunately from appraisals associated with troubled commercial loans.

Q: What are the toughest challenges today? Have you seen any positive changes as a result of this market correction?

A: The biggest challenge on a broader, national scale is to end the slide in property valuations and stabilize of employment. Virtually all market sectors have seen price reductions of varying magnitude. What this unfortunately signals to a rational purchaser is that if they wait, they are likely to be able to secure a property for less than if they act now. This is what is at the heart of a buyer’s reluctance to “pull the trigger” and has helped to contribute to the massive drop in transaction volumes seen throughout the City of Chicago. Sellers must realize that unrealistic pricing has a devastating effect in a declining market as the market often continues to “move away” from the price during the prolonged exposure time. The risk of overexposure is always present even in a strong market as homes begin to be viewed as stale but in a declining market these risks are compounded. The positive change as a result of the market correction (decline) has been an increase in affordability.

Q: We've been going through a huge new construction boom here. Thoughts on the Spire, Trump Tower and other big ticket projects? Do you think the hotel/condo format will be sustainable in Chicago? How long do you think it will take to all be absorbed?

A: 2009 will be the last year we will see a number of major condominium projects delivered for quite some time. These projects were approved prior to the credit crunch. Obviously, they will simply add to the oversupply of units. We have seen a number of projects with direct views of Millennium Park continue to outperform the market in terms of absorption and resale. We have also seen some projects with a highly refined and modern architectural ascetic outperform the market. The biggest challenge/risk is for commodity units with no differentiating qualities. I am a bit reluctant to talk about specific projects but will say that any project that does not have committed construction financing is highly unlikely to be built in this environment. I will also say that in any project with a significant number of unsold units requires far more due diligence on the part of the broker. The developer should answer questions such as how many have contracted over the past 30 days, 90 days and 180 days. Have any discounts been offered? Are these sales at full list price? An unwillingness to offer answers, particularly regarding recent sales volume should be a big red flag, and I would avoid any project that has lost all sales momentum. Regarding the hotel/condo format, I do not appraise this type of unit. I have always been skeptical of this concept. Regarding the time it will take to absorb all the new construction, it will be over two years. A huge number of units are still investor owned and are leased at a net loss after taxes, assessment and debt service. This is a shadow market of units that still needs to be transferred to owner/users at some point.

Q: With new regulations, what has changed with appraising? How is square footage determined? Can you include basements? How many months back can you go to have a solid comparable property? How close to the subject property do you need to be? One mile? Do you have to revise appraisals after the underwriter reviews them?

A: The general guidelines regarding appraisals have not changed. What has changed is the level of scrutiny. The basic Fannie Mae guidelines have said for years that comparables within six months and one mile should be used and if they are not some explanation must be given. The guidelines anticipate that at certain times, appraisers must go beyond a mile and perhaps use at least some comparable sales that are older than six months. Many lenders are now adding additional requirements to the base Fannie Mae standards. The most common is the demand that two of the comparables have closed within the past 60 days and that one pending sale comparable and one listing comparable be used. I would recommend that you provide what you think are the two most similar comparable sales in the past 60 days, the most similar pending and the most similar active. If there are significant differences between the subject property and these comparables, point them out. However, since some underwriters are rigidly demanding this data you should at least have your say of providing what might be the “best of the worst”. We deal primarily with portfolio lenders and have had very little difficulty getting appraisals approved. The “credit issues” are another story and have northing to do directly with the appraisal. Regarding basements (any part below lot grade) the rule for appraising has been and remains that the square footage should be listed separately and not included in the gross living area. What brokers do is another matter as you are not bound by the same Fannie Mae guidelines.

Q: With new construction what hurdles are you encountering? Are you allowed to give credit for upgrades? The cost for some energy efficient options costs exponentially more than the counterparts. With single family homes, are you allowed to give credit for energy efficient upgrades and 'going green?'

A: The answer always is found in the market. If the market is showing value for upgrades or green items than we will give value. The unfortunate experience I have seen for single family homes is that the return is very low for energy efficient items. I hope this will change as the market becomes more aware of the technology and as the cost for green items comes down through economies of scale.


Q: Real estate is local. Which neighborhoods are faring better or worse? Are single family homes doing better than condos?

A: It is impossible to generalize with complete accuracy. Typically, the areas most significantly impacted have been locations with a very high percentage of subprime loans. Value drops as much as 50% or more have been seen in many of these areas. The value impact in these locations has been seen in all property types. For example in many areas of Rogers Park a three flat that once sold at $600,000 now can be bought for $350,000. Areas such as Lincoln Park and the Gold Coast typically have seen far lower value declines. However, what is dangerous with generalizations is that within a area like the Gold Coast, some high rise condominium buildings have seen a 20% decline in value off the peak while other have seen very little roll back in value. In general, single family homes have done better. However, this again is a generalization with many exceptions.

For more information about Kevin or to hire him for a real estate appraisal, contact him directly at maloney1@megapathdsl.net or 773-281-6013.

Part 2: The Market from the Eyes of a Real Estate Attorney

As part of the continued series on offering broader perspective than just my own, I have interviewed other respected professionals working in the Chicago real estate market. Part 2 of this series is reflecting the market from the eyes of a real estate attorney, Kent Novit.

Kent has been practicing law since 1984: currently, First Ward Alderman in Lake Forest, Illinois: Member of the Public Works and Finance Committees for the City of Lake Forest, Illinois: Liaison to the Lake Forest Real Estate Coalition for the City of Lake Forest, Illinois; formerly the chairman of the Zoning Board of Appeals for the City of Lake Forest, Illinois. Kent has represented a good number of my clients as buyers and sellers.

Q: Depending on who you talk to, the Chicago real estate market is in a state of flux or a total standstill. Where is most of your business coming from now? New construction/re-sale or 1st time buyers or relocations?

A: In regard to residential real estate transactions the majority of the new contracts that I am assisting clients with are for the resale of existing homes at sales prices that are at or under $417,000.00. It seems to me that the existing market for properties that have asking prices between $600,000.00 to $1,500,000.00 is very slow.

Q: What are the toughest challenges today? Have you seen any positive changes as a result of this market correction?

A: I believe that the biggest challenge facing the Chicago area market is having Sellers list their homes at prices that realistically reflect the deflated market. While some Sellers are reluctant to reduce prior listing prices others face the dilemma of having outstanding mortgage balances that exceed the current market value of their home. Until the market truly adjusts to reflect the deflated values it is going to be slow going.

Q: I advise all my clients to get hire an attorney, even if they are one. How are real estate transactions different in Illinois and in Chicago? Can a buyer or seller work without an attorney? What is the benefit to hiring an attorney? Can the title company close the deal, as in other areas? Are new construction contracts different from re-sales? Are your rates flat or hourly? Benefit?

A: As an attorney it is, of course, my opinion that an attorney's assistance is needed for clients that are purchasing or selling homes in the Chicago area. I normally charge a flat-fee of $450.00 for residential closings. In areas that involve attorneys in the closing process the number of claims made under title insurance policies is dramatically lower. I believe that actual number of title claims for transactions in the Chicago area is among the lowest for metropolitan areas nationally, which results in lower title insurance costs in the Chicago area. That savings is offset by the cost of using an attorney in relation to a purchase or sale. Normally attorneys are used to review the contract for a transaction; negotiate inspection provision issues; protect contingency dates; review the title record for the subject property; attend closing to verify that the documents and figures are correct; and to act as a contact to work through issues quickly and with as little stress as possible

Q: With new construction what hurdles are you encountering? Are closings happening on time? Are buyers able to get their financing?

A: The developers that I am working with have encountered tremendous hurdles in gaining financing that is needed to acquire properties and to construct new residences. Existing developments face difficulties with getting units closed when they have been purchased by investors who cannot obtain financing. I have been contacted by a number of Purchasers that are hoping to get out of contracts to purchase units in new high-rise developments.

Q: In the past, I've had clients that had to bring money to the closing because they over financed their home by borrowing more than the home was worth. Now it's worse. Have you dealt with many foreclosures or short sales? Is it different working with institutions and banks, as opposed to a sellers?

A: Short sales and purchasers of foreclosed properties now compose a large percentage of transactions. Short sale purchases are for clients that either are buying for investment or that have fluid housing needs as they are usually very slow...usually taking 5 or 6 months to achieve, but with no guaranty that they will be approved by the mortgage holders. My advice in regard to short sales is to determine the number of mortgages that a seller has on an offered property as well as there amounts before entering into a contract. That information can be gained by using the Cook County Recorder of Deeds website. Sellers that have more then one mortgage will have an increased difficulty in gaining a successful short sale. Also a sales price that under the appraised value can make a successful transaction not likely. Buying properties that have been foreclosed upon is less of a problem and can be a bargain so long as a Purchaser has that property professionally inspected so to be well aware of its condition.

For more information about Kent or to hire him as your real estate attorney, contact him directly at novitlaw@covad.net or 312-332-2407 x 2.

Part 1: The Market from the Eyes of a Home Inspector

In an effort to provide a broader perspective than just my own, I have interviewed other respected professionals working in the Chicago real estate market. Part 1 of this series is reflecting the market from the eyes of a professional building inspector, Robb Packer.

A leader in ASHI (American Society of Home Inspectors) as a former board member and vice president, Robb Packer has been a respected home and building inspector for nearly 22 years. Actively pursuing excellence in his field, Robb has maintained memberships with the National Environmental Health Association and the American Association of Radon Scientists and Technologists and the Nations Radon Safety Board. He has been measuring and testing radon for 19 years. Robb has worked with many of my clients as well.

Q: Depending on who you talk to, the Chicago real estate market is in a state of flux or a total standstill. Where is most of your business coming from now? New construction, re-sale or pre-listing (before a property goes on the market?)

A. As you know, we are experiencing the toughest Real Estate Market since 1990-1991, the last recession; our business has contracted approx. 40% since the real recession started in 2006. But we are situated at the nexus of what is the current Market. Because we take the metropolitan Chicago area as our territory, we always have something going on, albeit on a smaller scale than usual.

Our business is very diversified, coming from Realtors, Attorneys, Mortgage Brokers, Previous Clients, The Web, and Professional organization referrals.

Currently, most of our business on single family homes are foreclosures. Next, we are still doing most of our business in Condos. As far as the type of business before the bottom fell out, we did primarily pre-contract inspections, with a high % coming from 'New Construction", to a lesser extent, we were developing a sizable business in the pre-listing market, due primarily in the aging of the Boomer parents there home coming on the market.

Q: Often homes in that are in a short sale situation or foreclosure have not been maintained well or perhaps not occupied for a long period of time. Since banks do not allow inspections until after a sale is negotiated, what should a buyer beware of when considering buying a distressed property?

A: In most situations where the distressed property is owned by the bank, the utilities are usually turned off. Because the utilities are turned off, you won’t know the true condition of the utilities and equipment in the property i.e. heating, air conditioning, plumbing which effects habitability. Keep in mind that you may need to be replacing that equipment immediately after closing, or soon thereafter. Buyers should factor in a minimum of $10,000 added cost beyond other relevant issues that would be revealed during an inspection.


Q: What are the toughest challenges today? Have you seen any positive changes as a result of this market correction?

A: The greatest challenges are just getting "normal" people to feel confident enough in their future to either buy their 1st property or take advantage of the amazingly good values to trade up and not worry about selling their current home or if they will still have a career. We are having a "crisis of confidence" that I have never seen in my 22 years as a Professional Building Inspector. The last 2 weeks have seen a spark in our business, but not enough to see a good pattern. We will just have to see if the disconnect in Washington D.C. and the rest of the country heals and see if this Recovery Plan works its way thru the system. Until people see things loosen up (people with great credit seem to have a problem getting loans), and money starts moving thru the Markets, we will have a long, brutal year.

Q: I advise all my clients to get a home inspection whatever they buy. Do you believe a buyer should get a home inspection when they are buying new construction? What is the scope of your home inspections? How is the cost determined?

A: Yes, Yes, and Yes! In New Construction, it is critical to have a good comprehensive inspection. There are a myriad of problems more constant in New Construction than in existing homes. Quality and Structural integrity are huge issues. As in existing home inspections, we take pains to check every possible issue. From windows to outlets, to water flow to seepage. Cost used to be determined by the size and age of the property. This is really a tougher question than you can imagine. Some days it is hard to determine what the value / cost of an inspection is. Mostly though, we keep to our usual pricing and work with some of our more difficult clients.

Q: With new construction what hurdles are you encountering? Are you seeing much change for builders in the way of Mayor Daley's 'Green City' Initiatives? What kinds of 'green' choices are builders making, and on what scale? Do you feel the cost for these outweighs the benefits?

A: As far as LEED or GREEN construction, most of the builders are using Energy Star products to Green Up their projects. Some are using Geo-Thermal, but for the most part it is the equipment not the materials we have encountered in the past few years. As far as Metrospect Ltd is concerned, we have been taking courses and seminars in Green construction and are very supportive of this in the Community. As ,more products and equipment come on line, the choices builders have and the more they are supported by the consumer will determine how far we go. And yes, even at slightly higher costs, the benefits outweigh the costs.

Q: Real estate is local. Which neighborhoods are you working in more and less? Are inspecting more single family homes, condos or investment buildings?

A: Yes, our real estate business is local, but every time there is an economic down turn, the business goes as follows:
a. The less expensive zip codes, 60622, 60607 etc. is where the people and money go.
b. Condos, either 1st timers or new in-towners.
c. Foreclosures, foreclosures, foreclosures! (single family homes).
d. Very little investment properties, this is a major surprise.


Q: Aside from home inspections, what other kinds of inspections do you do? Should everyone do a radon test? Mold test?

A: I do Radon Measurements and Testing, new construction consulting, and expert testimony, and yes, every home should be tested for Radon gas. Radon is the 2nd leading cause of non-smoking lung cancer. Mold should only be tested for after a building inspection has determined the possibility of it.

Q: Robb, Do you think our market will come around?

A: I hope these answers are of help to you and that they illuminate the current condition. I am still a firm believer and have faith in the Chicago Real Estate Market, and in its eventual return to a healthier condition.

For more information on Robb, to read his blog or to hire him to inspect your home, visit his website Metrospect Ltd. or call him directly at 847-808-8488.

Today’s home prices make it a great time to be a Buyer now!

Credit is much harder to get now, even with a good credit rating. In the case of condo buyers, you may need as much as 25% down, as well as a good credit rating. If you have the savings and the good credit, don’t wait! Rates remain low and prices too. If you can’t get into the real estate market now because of a poor credit rating, there are things you can do.

Start with obtaining your credit report. You are entitled to receive a free copy once a year from each of the three reporting agencies: Experian, Equifax and TransUnion. You can also obtain a copy from http://www.annualcreditreport.com/.

It’s your right to dispute inaccurate information under the Fair Credit Reporting Act. The credit bureaus are only responsible for reporting the data provided by creditors, but they do not verify it. Nearly 80% of all credit reports have some mistake, so it’s a good idea to review your report. It’s best to dispute by writing all three agencies with proof of payment. Keep copies of everything you send in the mail too.

You may also need to file your dispute in writing with the creditor as well. If you find old information, you will want to have that removed as well. The data must be kept for 7 years, but older information may be impacting your rating.

If you have experienced identity theft or your credit has been compromised in some other way, you can put a security freeze on your credit.

If you had to go through a foreclosure or bankruptcy, in time your credit can be repaired. A foreclosure should be removed after 7 years, and a Chapter 7 bankruptcy after 10 years.

If you are not getting into the real estate market because you don’t have the down payment, get your finances in order.

Develop a household budget. Instead of creating a budget of what you’d like to spend, use receipts to create a budget that reflects your actual spending habits over the last several months. This approach will factor in unexpected expenses, such as car repairs, as well as predictable costs such as rent, utility bills, and groceries and eating out.Reduce your debt. Lenders generally look for a total debt load of no more than 36 percent of income. This figure includes your mortgage, which typically ranges between 25 and 28 percent of your net household income. So you need to get monthly payments on the rest of your installment debt — car loans, student loans, and revolving balances on credit cards — down to between 8 and 10 percent of your net monthly income.
Look for ways to save. You probably know how much you spend on rent and utilities, but little expenses add up, too. Try writing down everything you spend for one month. You’ll probably spot some great ways to save, whether it’s cutting out that morning trip to Starbucks, bringing lunch to work or eating dinner at home more often.Increase your income. Ask for a raise! If that’s not an option, you may want to consider taking on a second job to get your income at a level high enough to qualify for the home you want. Save for a down payment. Designate a certain amount of money each month to put away in your savings account. Although it’s possible to get a mortgage with only 5 percent down, or even less, you can usually get a better rate if you put down a larger percentage of the total purchase. Aim for a 20 to 25 percent down payment. Don’t change jobs. While you don’t need to be in the same job forever to qualify for a home loan, having a job for less than two years may mean you have to pay a higher interest rate.