Chicago Metro Area Real Estate

Standard & Poor’s Case-Shiller Housing Index for the Chicago Metro Area for April was just released this morning. The April index of 122.30 remained essentially unchanged from the March index of 122.34. This is the smallest month to month drop in the index since it peaked in September 2006 at 168.60 and remained essentially unchanged the following month at 168.59.

This lack of change is certainly a positive indicator for the Chicago Metro Area market! Hopefully, we’ll continue to see a stabilization of home prices.

Since it’s peak the Case-Shiller index for the Chicago Metro Area has fallen 27.5%. Last year the index fell 14.3% with 9% of that in the second half of the year. Year to date the index has fallen 10.8%.

For more in-depth Chicago Metro Area housing market analysis, sign-up for my monthly email update, “Maximizing Equity”.

This morning I showed houses in Wheaton and Glen Ellyn. The remarks in the listing for one of the homes included “quality & care”. Shown below is the “quality & care” we found in the basement. Several floor tiles were missing and the cord in the photo was for a large fan running in the other room - not a good way to stage a home!

If you’re thinking about buying a home and want to know if you’ll need to purchase flood insurance, the definitive source is:

a. The Federal Emergency Management Agency (FEMA)
b. The county the home is located in
c. The seller
d. Your mortgage company

FEMA - FEMA has lots of great information on flooding, flood insurance and flood maps, but keep going.
County - I find the flood maps for Cook County and the collar counties easier to ready than the FEMA flood maps, but keep going.
Seller - Buyers should always independently verify the information sellers provide! Just like sellers should always independently verify information buyers provide! Keep going!
Mortgage Company - BINGO! If they say the home you wish to purchase is in a flood plain, they will require you to purchase flood insurance according to Chicago real estate attorney, Rachell Horbenko! They are the final word on this!

Check out Rachell’s real estate law blog for more goodies!

Yesterday I talked with a buyer at Caribou Coffee in Boystown. He’s interested in buying a condo in Andersonville or Rogers Park using Federal Housing Administration (FHA) financing. FHA mortgages allow down payments as low as 3.5%.

Unlike houses, not all condos are FHA approved. In Andersonville and Rogers Park most condos aren’t FHA approved. The process to get a condo development FHA approved takes around 6 months.

My search would be easier if listing agents always noted FHA financing for their FHA approved condos in their listings. However, I find that some Realtors either don’t bother to ask the sellers if their condos are FHA approved or they just don’t put it in the listing.

So I’ll be narrowing down the choices between those condos advertised as FHA approved and the list of FHA approved condos I’ve compiled from various sources. It is possible to get a spot approval for an individual condo, but it takes time and the condo association must meet several requirements.

Relocating recently got tougher for dual income couples. Chicago’s Daily Herald reported today that Fannie Mae “no longer will permit mortgage applicants to count the income of so-called “trailing spouses” toward the household income needed to qualify for a loan. A trailing spouse is the one who joins his or her spouse or partner in a job-related move, but who has yet to obtain employment in the new location.”

Previously mortgage companies would count part of the trailing spouse’s income in the prior location even if he or she hadn’t secured employment in the new location. Now with a tougher job market, it can take longer for the trailing spouse to find employment, so Fannie Mae doesn’t want to make any assumptions about his or her income.

For the full article, read “Fannie Mae tightens rules on ‘trailing spouse’ income”

I just listened to a story on WBEZ 91.5 (Chicago Public Radio) about numerous Chicago homeowners facing huge repair bills for their homes constructed with split-face concrete block that wasn’t installed correctly.

Even through City of Chicago inspectors had approved the construction, the homeowners are on the hook for repairs since they now own the buildings, not the developers. Many of the homes with incorrectly installed split-face concrete block are leaking. Mold is developing in some of the homes.

To listen to the story or read the text, visit “Moldy Metropolis: Homeowners Struggle with Leaky Concrete“.

Even Chicago’s wealthiest aren’t immune to foreclosures! Today ChicagoRealEstateDaily.com reported that Amcore Bank has filed a foreclosure lawsuit for almost $16M on a 400 acre estate and horse farm in Barrington Hills. The couple who own the estate bought it for $19.3 million in December 2006 making it the most expensive Chicago Metro Area home purchase that year.

The estate includes a 10,000 square foot house, guest and staff quarters, barns and a ½-mile race track. For the full article read, “Foreclosure suit hits most expensive local home of ‘06“.

To see luxury homes currently for sale in the Barrington area click here.

Last week at Baird & Warner’s “Out of the Office” networking event in Chicago for gay pride month, I talked with my friend, Scott, who’s been thinking of buying a condo in or near the Loop for a few years now. He asked me if I thought now was a good time to buy.

There are a lot of good reasons to buy a condo in the Loop area now. Prices are lower. Interest rates are low. There’s an $8K first time home buyer tax credit good through November 30th. Condo buyers in downtown Chicago will also have far more selection and negotiating power this year than next since relatively few new condos will be coming on market next year in those areas. See my post “Regional Economic Forecast 2009 Highlights 3 of 3” for a chart showing the drop in new condos from this year to next.

At the same time, you also need to be careful where you buy since some newer condo developments are in financial trouble. Just this morning Crain’s Chicago Business reported that the 342-unit Lofts at Roosevelt Collection in the South Loop was considering converting the development to apartments since so many units remain unsold. Owners at some condo developments where sales have already closed may be facing higher monthly assessments since the expenses for the common elements must be covered by fewer sold condos.

Remember, sales reps and listing agents work for the sellers, not you! Get a professional on your side. Call me before you start looking at condos!

First, let me say that there are a lot of professional, hard-working Realtors. Unfortunately, there are also a few Realtors who are asleep on the job.

Such was the case in a recent sale where I represented the seller. A young man attended an open house I hosted. A couple of days later without bothering to see the home a Realtor negotiated an offer for him! When it was time for the closing, she didn’t even bother to do a final walkthrough of the home for him.

Her honesty was also questionable. At one point she refused to call her client and ask him if he would agree to a later closing date since he was asking for an extension of his mortgage contingency. She was adamant that she had discussed the closing date with him and that he didn’t want to push it back. My seller’s attorney contacted the buyer’s attorney and learned that the buyer was more than willing to push back the closing date even farther back than originally requested. I suspect the Realtor just wanted to get her commission check sooner than later. It would have been nice for her client, if she had truly earned it.

On Saturday I showed houses in Des Plaines to a woman wanting to take advantage of the $8K first time home buyer tax credit. She’s owned a home before, but not in the past 3 years, so she qualifies as a first time home buyer.

One of the houses, a 1924 bungalow, included the built-in kitchen table shown left. The top of the table folds in half so that it fits under a regular size countertop. The 2 legs are on wheels so it rolls back under the counter. It provides a nice work area.

I have never seen such a built-in before! Anyone else have one of these or seen one?