Archive for February, 2010

Home Sales Start 2010 With a 29% Rise

Posted by Phil Buoscio On February - 28 - 2010

By: Staff Feb. 26, 2010

(Crain’s) — Chicago-area home sales started the year with a jump, but distressed sales continued to push down prices.

Month	2010	2009	Change
CHICAGO-AREA SALES
Local sales of single-family homes and condo rose in January for the seventh straight month.
January	3,922	3,035	29.2%
Month	2009	2008	Change
January	2,965	3,927	-24.5%
February	3,082	4,326	-28.8%
March	4,260	5,759	-26.0%
April	4,747	6,094	-22.1%
May	5,634	6,927	-18.7%
June	7,140	7,806	-8.5%
July	7,427	7,408	0.3%
August	7,009	6,917	1.3%
September	6,862	6,477	5.9%
October	7,286	5,467	33.3%
November	6,826	3,978	71.6%
December	5,752	4,320	33.1%
Full year	69,290	69,406	-0.2%
Source: Illinois Assn. of Realtors

In the nine-county Chicago region, 3,922 single-family homes and condominiums were sold last month, a 29.2% increase over January 2009, according to a release Friday from the Illinois Assn. of Realtors.In the city, sales rose 31.1% last month, to 1,202 compared with 917 in January 2009, the Realtors said.

“We are seeing an accelerated spring market despite the snow and cold in Illinois with the homebuyer tax credit the driving factor for rising home sales,” Mike Onorato, president of the association and broker-owner of Onorato Real Estate in Coal City, said in the release.

The median price in the Chicago area — at which half the homes sell for more and half for less — fell to $175,000 in January, a 5.4% decrease from last year, according to the release.

In Chicago, the January median price of $195,000 was similarly down 4.9% compared with January 2009.

However, the statewide median price rose slightly, to $145,300 compared with $145,000 in January 2009, the Realtors association said.

“Foreclosed properties continue to exert downward pressure on median prices in Chicago but much less so in Illinois,” Dr. Geoffrey J. D. Hewings, director of the Regional Economics Applications Laboratory (REAL) of the University of Illinois, said in the release. “There is evidence that median price increases will moderate in the state over the next three months (February, March and April), remaining about the same as those a year earlier; for Chicago, the median prices will be about six percent below comparable prices.”

Statewide, sales rose 14% last month to 5,483 homes.

The Illinois Assn. of Realtors’ sales figures include new and existing homes. The nine-county Chicago Primary Metropolitan Statistical Area consists of Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will.

Market Conditions, Neighborhoods

Construction Activity To Rise

Posted by Phil Buoscio On February - 26 - 2010

Check out this Video and article from Crain’s Chicago Business on what 2010 looks like for new construction in the region.

By: Eddie Baeb Feb. 22, 2010

(Crain’s) — Local construction starts are forecast to climb 18% this year, as increases in single-family housing construction and public works projects help end a three-year decline.

Yet the gains won’t feel like much of a salve to the Chicago-area construction industry, as the $11.51-billion value of the projected starts in 2010 is just more than half the peak of $21.77 billion in 2006, according to McGraw-Hill Construction Research & Analytics.“We’re still going to have a depressed construction market in 2010, it’s just that we’re coming out of that horrible experience in 2009,” says Kim Kennedy, manager of forecasting with McGraw-Hill Construction Research, a Bedford, Mass.-based unit of McGraw-Hill Cos.

Last year, construction starts plummeted 46% to $9.78 billion, marking the biggest decline here since McGraw-Hill began tracking the data in 1967. Public works and utilities were the only sectors to see gains in 2009, while the steepest falls were in commercial, industrial and institutional buildings.

From a bottom-line perspective, 2010 could be every bit as tough — or tougher — as the lack of work and the crowded competitive landscape has squeezed margins for contractors.

“It’s still painful,” says Steve Zuwala, president of Chicago-based Interior Construction Group Inc. (ICG), which specializes in upscale office buildouts. “In 2009 we had the benefit of some projects carrying over from 2008, when fees were a little bit better.”

Mr. Zuwala says ICG’s bid opportunities are up 40% compared to the same time last year, and if the firm wins enough of that work it may begin adding workers after slashing headcount some 30% from late 2008.

“It’s encouraging that the year started out with a lot of people deciding, ‘Let’s get this out for bid,’” he says. “There’ll be more activity, but the fees will be lower.”

Chicago’s 18% projected increase this year tops McGraw-Hill’s national forecast that starts will increase 11% to $466.18 billion.

Single-family housing starts are projected to climb 70% here to $1.97 billion, while multi-family housing is projected to remain flat at $940 million.

Low mortgage rates, loosening credit, falling prices and pent-up demand all stand to bolster the single-family market, where local construction starts have fallen four straight years, writes McGraw-Hill.

Apartment and condominium construction, meanwhile, won’t back bounce from three years of falling construction starts because of the big existing inventory of both apartments and condos.

“Oversupply will remain a daunting challenge in the overbuilt Chicago metro,” McGraw-Hill writes. “The building boom of 2003-2006 has created a deluge of units entering the market even while the market has turned dramatically negative.”

Chicago’s multi-family is lagging the national market, as McGraw-Hill forecasts starts will rise 16% nationwide this year.

The mainstays of the commercial sector, retail and office, are poised to have a third straight year of local declines. Construction starts of stores and shopping centers are forecast to fall 11% this year to $420 million, while starts of office and bank buildings are expected to drop 17% to $291 million.

Health care projects are poised to rise 22% in 2010 to $662 million. That comes on the heels of a precipitous 81% decline last year primarily because of the huge volume — $2.88 billion — that started in 2008, including four major hospital projects: the Ann & Robert H. Lurie Children’s Hospital; University of Chicago Hospital Pavilion; Rush East Tower Atrium, and Elmhurst Memorial Hospital.

Public works projects, buoyed by federal stimulus money, are expected to be a bright spot in 2010. Local highway and bridge construction starts are slated to climb 26% to $2.05 billion.

Roughly $86 million in stimulus transportation funds were allocated to Chicago, according to the McGraw-Hill report, with several major projects to get under way this year, including $11.6 million for Chicago Avenue improvements between Laramie and Grand avenues and $10 million for improvements to Congress Parkway.

Financing, Market Conditions, Neighborhoods, Real Estate Videos

We Are Back In 2003 But Positive Signs

Posted by Phil Buoscio On February - 24 - 2010

We are Back in 2003.
The typical national home price is back at 2003!
Ok, breathe. We are all younger now.
No gray hairs here.

The bottom likely is here now or was just here and we’ve levelled out.

Evidence of a national truth that property values may be leveling off- Standard and Poors company’s national index, which is produced only once a quarter and covers all nine U.S. census divisions, showed a seasonally-adjusted gain of 0.3 percent between the third and fourth quarters of last year. This is a considerable improvement from the fall that pushed home values 32 percent below their 2006 peak!
According to the S&P/Case-Shiller U.S. National Home Price Index released Tuesday, residential property values were down 2.5 percent in the fourth quarter of 2009 compared to one year earlier-significant improvement over the annual variances reported in the first (-19.0 percent), second (-14.7 percent), and third (-8.7 percent) quarters of the year, and shows a definite pattern of diminishing declines.
In December, S&P’s closely-watched 10-city and 20-city composites recorded annual declines of 2.4 percent and 3.1 percent, respectively. These two indices, which are
reported at a monthly frequency, have seen improvements in their annual rates of return every month since the beginning of 2009. Following suit with the two composites, S&P said all 20 metro areas saw improvement in their annual returns …
As of the fourth quarter of 2009, S&P said average home prices across the United States are at similar levels to what they were in the summer of 2003.
Looking at the monthly statistics, 15 of the 20 markets tracked by the index showed a decline from November to December, with Chicago posting the sharpest drop of 1.6 percent. Some selections taken from NYT and DS News.

All Articles, Market Conditions

Eco-Friendly Kitchen Design

Posted by Phil Buoscio On February - 23 - 2010

Check out this video from Realtor®TV talking about Eco-Friendly Kitchen Design. Whether you are building a + House ™ or you want to update your current house, there are many ways you can be “Eco-Friendly”. Being able to customize and upgrade your Kitchen on a + House allows you to maximize your energy use. From Energy Star appliances to low flow plumbing fixtures, there are plenty of options to put less of a burden on mother nature and put money back in your pocket. Give us a call today to find out how “Eco-Friendly” your kitchen could be in a + House 800-603-5251 Ext. 248.

+ House (Plus House) is marketed and sold by Plus House, Inc.

Green Housing, Neighborhoods, Real Estate Videos

Fewer People Falling Behind On Home Loans

Posted by Phil Buoscio On February - 19 - 2010

Here’s some good news on the housing front. It looks like new foreclosures and people falling behind on loans could be slowing. It’s going to take a while to sort through all the current inventory of foreclosed and short sale properties, but there is light at the end of the tunnel. Every market it local, but as the foreclosure rate drops in different areas we may start to see stabilization and possibly some appreciation. Now is a great time to get out and start looking at the deals that are on the market. Don’t wait until you’ve missed the bottom of the barrel pricing that is here now, cause it may not last that much longer. Let us keep an eye on the market for you – we can set you up with a search that pulls properties daily as they come on the market and when status change on properties. Email me at Phil@Teambrealty.com or you can call me at 312-330-3730 and I can get your home search started. Phil Buoscio, Broker

Here’s the article from MSNBC going into more deail….

Fewer people falling behind on home loans

Housing recovery ‘going to be a very long, gradual process,’ analyst says

Source: www.MSNBC.com

WASHINGTON – The end of the foreclosure crisis is finally in sight. For the first time in almost three years, the number of homeowners falling behind on their loans is declining.

The drop means the number of people losing their homes will start to fall. But some pain from the crisis is sure to persist. Because millions of people are already in foreclosure, deeply discounted houses will put pressure on home prices for years.

“Housing is on a path to recovery,” said Mike Larson, a real estate analyst with Weiss Research. “It’s going to be a very long, gradual process.”

In high-foreclosure cities like Las Vegas, Phoenix and Miami, homes have lost roughly half their values from their peaks. But a report Friday from the Mortgage Bankers Association showed Nevada, Arizona and Florida had some of the biggest declines in new delinquencies.

The figures probably mark “the beginning of the end” of the crisis, said Jay Brinkmann, the trade group’s chief economist.

However, more than 15 percent of homeowners with a mortgage have missed at least one payment or are in foreclosure, a record. Worse, nearly half of all delinquent borrowers were at least three months behind on their payments, up from a typical level of less than 20 percent.

“The bad news is that we still have a big problem,” Brinkmann said. “The good news is it looks like it may not get much bigger.”

That’s because the percentage of borrowers who missed just one payment on their home loans fell to 3.6 percent in the October-to-December quarter from 3.8 percent in the third quarter, according to the Mortgage Bankers Association. That decline was even more surprising because delinquencies usually rise at that time of year due to higher heating bills and holiday spending.

In another encouraging sign, the number of borrowers who had missed at least one payment but were not yet in foreclosure also fell for the first time since the beginning of 2007.

Banks are delaying the foreclosure process, traditionally between four and six months, as they evaluate borrowers for help under the Obama administration’s $75 billion mortgage-relief effort. It lowers borrowers payments to as low as 2 percent for five years and extends loan terms to as long as 40 years.

But experts warn that hundreds of thousands of borrowers will not be eligible or will not complete the process. So far, only 116,300 borrowers out of 1 million who enrolled have had the terms of their mortgages changed permanently.

Despite the government’s efforts, there may be 6 million foreclosed homes that are put on the market over the next three years, according to Barclays Capital.

Timing is key. If banks unload them suddenly, “it will be much more detrimental to the housing recovery than if it’s a slow, gradual bleed,” said Michelle Meyer, a Barclays economist.

On Friday, Obama announced that housing agencies in the five hardest-hit states will receive $1.5 billion to help spur local solutions. Those five are Arizona, California, Florida, Michigan and Nevada.

“Government alone can’t solve this problem,” Obama said. “But government can make a difference.”

Financing, Market Conditions, Neighborhoods

January Housing Construction Rises More Than Expected

Posted by Phil Buoscio On February - 17 - 2010

Signs of a Recovery? We’re definitely seeing more activity in showings for our listings and buyers seeking our assistance in finding them a property. Possibly the most hopeful news is that numbers rose in the three major categories of manufacturing, mining and energy signifying a possible recovery for the economy which will be the best boost for real estate values. ~Phil

From The Huffington Post

http://www.huffingtonpost.com/2010/02/17/january-housing-construct_n_465524.html

WASHINGTON (MARTIN CRUTSINGER– AP) — Housing construction posted a better-than-expected increase in January which pushed activity to the highest level in six months. The solid gain raised hopes that the construction industry is beginning to mount a sustained rebound from its worst slump in decades.

The Commerce Department said Wednesday that construction of new homes and apartments rose 2.8 percent last month to a seasonally adjusted annual rate of 591,000 units. That was better than the 580,000 annual pace that economists were forecasting.

Applications for building permits, considered a good barometer of future activity, fell 4.9 percent to a rate of 621,000, but that was after two months of large increases.

In another sign of strength, Wednesday’s report revised up activity in December to show builders were starting construction at an annual pace of 575,000 units during that month, much stronger than the 557,000 originally reported. Even with the upward revision, activity fell a slight 0.7 percent in December, a dip that was blamed on severe weather in many parts of the country that depressed construction activity.

Economists are hoping that housing is beginning to recover and a rebound in this area will help support the economy as it struggles to mount a sustained recovery from the deepest recession since the 1930s.

In a separate report suggesting strength, the Federal Reserve said industrial production rose 0.9 percent in January, the seventh consecutive monthly increase.

January’s numbers rose in all three major categories: manufacturing, mining and energy utilities. That is the first such show of strength since August 2009.

Financing, Market Conditions