Happy Anniversary!

Today is the first anniversary of this blog. According to the counter below, we've had 22,300 visits in year one. According to Google AdWords analytics, we've had nearly 15,000 visits by 11,100 visitors. We are told by those in the know that our tool is more accurate. Based on the lower number, we've averaged 41 visits a day by 30 visitors a day. Judging by the on-site counter, we are visited 430 times a week, which is how often the typical visitor drops in. We thank each of you for stopping by.

Among the 155 items we posted, our favorite, most-valuable and most-prescient was a link to a roller-coaster video demonstrating the ups-and-downs of the real-estate market over the past decades and making a strong suggestion, based on research by Yale economist Robert Shiller, that, nationwide, we were in for a steep decline in prices. Who knew? Among others, Shiller did.

We would especially like to thank our friend Peg Corwin for helping us launch the blog, Joe Zekas for allowing us to draw on the reporting of his staff at YoChicago.com for our weekly New-Construction updates and all of you who have contributed to our blog.

We look forward to serving you in the coming year.

Trump's Chicago Tower: Controversy Continues

Interested in some insightful inside information on Trump International Hotel and Tower?

Check out this well-researched, well-balanced blog post by Jenny Ames, one of Coldwell Banker's--and Chicago's--top-selling, high-end agents. In her recent post, Jenny characterizes Donald Trump's luxury, 92-story condo hotel at 401 N. Wabash as a "source of concern for investors," but also as a source of "some outstanding opportunites" for anyone who wants to live in luxury downtown.

Among the troubling statistics she cites: In early January, 52 hotel units and 62 condo units in the 825-unit highrise were listed for sale on the MLS; 27 condos were listed for rent.

Jenny's blog, one of the best we've read, is Live and Play in Chicago: An Insider's Guide to What's Happening on Chicago's North Side. We've added it to our Recommended Resources.

Buyers Stuck in Condo Limbo

"Developers aren't the only ones smarting as the downtown condominium market tanks. Buyers of units in stalled condo tower projects face a tough decision: walk away and lose their deposits, or wait in hopes that the condos of their dreams will be built eventually."

That's the beginning of an article by Andrew Schroedter in the January 26 issue of Crain's Chicago Business. For the full article, plus an accompanying section titled "Will they ever get built?," which offers helpful updates on the status of six major developments (Chicago Spire, Lincoln Park 2520, Waterview Tower, X/O Condominiums, Solstice on the Park and Peshtigo), visit Crain's Web site.

Case-Shiller: October Area Prices Down 6%

Revised from previous post

For October 2008, the average sales price for 2,200 re-sale condos in the Chicago metro area was down 6% from its all-time October high in 2007 and 2006. And, for the past ten years, the average annual appreciation rate for existing condos in the Chicago area was 6%.

Those findings come from the most recent condo report issued by Standard & Poor's/Case-Shiller, one of the most-respected and most-followed U.S. housing indices. Until recently, condos were excluded from Case-Shiller's monthly housing reports, which receive significant media coverage.

Among the five Metropolitan Statistical Areas (MSAs) monitored for condo sales is Chicago-Naperville-Joliet (representing eight counties: Cook, DeKalb, DuPage, Grundy, Kane, Kendall, McHenry and Will).

So now, thanks to S&P, we have access to monthly data going back to January 1995. We'll be reporting on these statistics in future blog posts. With appropriate credit and a link to this blog, you may display these posts on your own blog or Web site.

For October 2008, the Chicago condo index was 151. (It was 100 on January 2000.) That compares to 160 for October 2007, which means a year-over-year decline in sales price for re-sale condos of 6%. (UPDATE: For December 2008, the index was at 146, down another 2%.) The numbers and percentage change from the previous year, each October, are as follows:

1998: 92 (+7%)
1999: 98 (+7%)
2000: 109 (+11%)
2001: 120 (+10%)
2002: 127 (+6%)
2003: 135 (+6%)
2004: 143 (+6%)
2005: 154 (+8%)
2006: 160 (+4%)
2007: 160 (+0%)
2008: 151 (-6%)

In the decade from 1998 to 2008, the increase in sales price was 64 percent (151 minus 92 divided by 92), for an average annual appreciation rate of 6.4 percent.

Compared to Chicago's year-over-year October decrease of 6%, New York was down 3%, Boston down 4%, San Francisco down 17% and Los Angeles down 21%.

For a spreadsheet with the 1995-2008 statistics for all five metro areas, e-mail your request to Ric14@ChicagoCondosOnline.com.

Notes from an S&P representative: The number of Chicago-area condos included in the most recent survey was 2,217. The index is calculated with the repeat sales method, which uses data on condos that have sold at least twice, in order to capture the true appreciated value of constant-quality condos.

To calculate the index, data are collected on transactions of all condos (including condo townhomes) during the month. The main variable is the price change between two arms-length sales of the same condo. Price data are gathered after that information becomes publicly available at county recording offices.

Data are collected on sales of specific condos. Each sale price is considered a data point. When a specific condo is resold, months or years later, the new sale price is matched to the first price, creating a sale pair. The difference in the value of this sale pair is measured and recorded.

The sale is screened to exclude transactions (a sale between family members, for example) that would make the index not representative of the market. The screened sale pairs are then weighted to control for atypical changes in particular condos. All qualified, weighted sale pairs in the MSA are aggregated into the corresponding MSA’s index.

For a complete description of the methodology, visit homeprice.standardandpoors.com.

42,000 Agents, Appraisers Gain Access to ChicagoCondosOnline.com

From a joint news release by Midwest Real Estate Data (MRED) and ChicagoCondosOnline.com, our Web site:

Finding the perfect Chicago condominium is becoming easier.

As the 2009 selling season opens, the 42,000 members of Midwest Real Estate Data (MRED), which operates the multiple listing service for northern Illinois, and their customers, have free access to ChicagoCondosOnline.com. That subscription-only Web site provides the most comprehensive, reliable and accessible content on this city’s communities and condos.

“We are proud to have established this relationship with ChicagoCondosOnline.com,” said Bud Fogel, chief executive officer of MRED, the organization that resulted from the recent consolidation of the two regional multiple listing services, MLSNI and MAP MLS. “This unique, innovative service will help our agents sell more condos in less time with less effort.”

From any listing on connectMLS, on MREDLLC.com, in any of 12,000 condo buildings in Chicago, agents are able to find the answer to almost any question about that property, as well as 13,000 floor plans. By giving buyers access, agents can save time and money while improving service.

Ric Cox, creator and owner of the site, said, “We are delighted to welcome MRED as our No. 1 marketing partner. Under this license agreement, buyers now have 42,000 more ways to gain free access to ‘The Ultimate Condominium Resource.’”

Buyers can access all content by paying $30 a month, or $300 a year, by credit card. Or they can gain free access by registering as a guest of any MRED member agent, with no obligation to their host.

Launched in December 2005, ChicagoCondosOnline.com also features profiles of the city's 77 census areas.

The 12,000 buildings represent more than 90 percent of market activity in city condos. In addition to resale, they encompass properties being planned, built or converted. Included are affordable units, two-flats, lofts, high rises, plus vintage and hotel condos.

Coming are thousands of condos in suburban Cook County, starting with Evanston.

Not displayed on ChicagoCondosOnline.com are active listings. "Our uniqueness is that we offer the entire inventory of unit types, from studios to penthouses, not just units on the market today," said Cox, an editor turned entrepreneur. "When ready to select specific units, buyers can ask any agent to sign them up with the MLS to automatically receive active listings that match their preferences."

In addition to profiles and floor plans, visitors to ChicagoCondosOnline.com can access maps, photos, declarations, comparison charts and a search engine with 100 preferences. Among the data, documents and interactive tools are:

100-Preference Search Engine. Instantly, Super Search lists buildings and unit types that match any of 100 preferences, such as balcony, deeded parking, dogs, walking distance to the Red Line, even maximum price per square foot.

Quick Comparison Charts. Using a unique tool called the Quick Comparison ChartTM, users can generate side-by-side charts that compare any three areas, buildings or unit types. When available, the 200 fields of comparable data include annual ownership costs per square foot, by unit type.

12,000 Building Profiles. With 12,000 Building Profiles, users have access to such data as “monthly assessment includes,” owner occupancy, median sales price by unit type, parking, travel time to work, and restrictions on pets and rentals. Managers with 30 property management companies provide much of the data.

77 Area Profiles. With profiles of all 77 of the city’s census areas, users can discover the city-wide ranking of any area, on such demographics as percentage of singles or professionals, student/teacher ratios by school, plus median sales prices, and appreciation rates for one, three and five years.

1,250 Declarations. With a credit card, any visitor can buy digital (pdf) versions of 1,250 recorded declarations and 500 amendments.

Agents & Appraisers: To register, go to connectMLS and click the Chicago Condos Online link in the Info section of any active city condo listing.

Buyers: To register, go to ChicagoCondosOnline.com.

New-Construction Update: 1/26/09

9 W. Erie

Every Monday, with help from our friends at YoChicago.com, we present vital data on five condos under construction.

To view Building Profile on ChicagoCondosOnline.com, click address. To visit developer’s Web site, click name. To use Chicago's best condo search engine to review in-depth profiles of 900+ new-construction properties and find the unit types that meet any combination of 100 preferences, click here.

9 W. Erie, 9 W. Erie
NA of 60 available, 1-2 BR, $270K-$600K, Delivery late '10
Developed by Provence, Marketed by Helios Design Build

1901 S. Calumet, Museum Park Place South
NA of 302 available, 1-3 BR, $250K-$550K, Delivery August '09
Developed by Enterprise, Marketed by Coldwell Banker

3844 N. Ashland, Ashby
5 of 18 available, 2 BR, $410K-$460K, Delivery now
Developed and Marketed by JAB Real Estate

3754-3756 N. Bernard, Bellevue
5 of 6 available, 0-2 BR, $90K-$170K, Delivery NA
Developed and Marketed by The Collazo Group

3245 N. Ashland, LV Lofts
12 of 24 available, 1-2 BR, $290K+, Delivery now
Developed and Marketed by New Haven Homes

Previous New-Construction Updates

How To Maximize Your Credit Score

To keep your increasingly important credit score as high as possible, we recommend the following advice by Larry Bettag, Vice President, Cherry Creek Mortgage, reprinted from HomeFinder.com:

Here are 5 factors impacting your credit score (in the order of importance):

1. Payment History has a 35 percent impact. Paying debt on time and in full has a positive impact, and late payments, judgments and charge-offs have a negative impact.

2. Outstanding Credit Balances have a 30 percent impact. Debt ratio of outstanding balance to available credit is important. Keeping that below 50 percent is wise and below 30 percent even wiser. It is never a good idea to close an account; the debt ratio will go up and the number of seasoned lines will decrease.

Pay outstanding debt down as close to zero as possible and evenly redistribute the remaining balance among the open lines. The increased interest incurred by moving a balance from a zero percent card to a 23 percent card will be minimal relative to what the increased mortgage debt might be with a low credit score. Hitting the maximums of available credit can be very negative. It may be worth calling and asking the credit company to increase your available credit to lower the debt ratio, provided they can do so without a hard credit inquiry.

3. Credit History has a 15 percent impact. The length of time a particular credit line has been opened is important. A seasoned borrower is stronger.

4. Type of Credit has a 10 percent impact. A mix of auto loans, credit cards and mortgages is positive, rather than a concentration in credit cards only.

5. Inquiries have a 10 percent impact. Hard inquiries for credit will negatively impact the score. Auto and mortgage inquiries receive special treatment and 20 inquiries can be made in a 14-day period for auto or mortgage and will be treated as only 1 inquiry. The maximum number of inquiries that will reduce the score is 10. Any inquiries beyond that (11 plus) in a six month period will have no further impact on the borrower. Each hard inquiry can cost 2-50 points on a credit score.

Time to Refinance?

Considering refinancing your mortgage, to take advantage of historically low interest rates, below 5%, in some cases?

As a first step, we recommend you read the helpful article by Sandra Block in USA Today, then contact your local lender.

If you're interested in refinancing, writes Block, here's what you'll need:

Excellent credit
To get the lowest rates, you'll need a FICO credit score of 720 or higher.

Obtain your credit score before you apply for a mortgage. You can order a free copy of all three of your credit reports once a year at http://www.usatoday.com/money/economy/housing/www.annualcreditreport.com. You'll have to pay extra for your credit score.

Once you've received your credit reports, check them for errors that could hurt your score. If your reports show late payments — and the information is accurate — the only way to repair the damage is by showing lenders that you've changed your ways.

However, if your credit reports show large credit card balances, you can raise your score quickly by paying them off. Your "credit utilization" ratio, which reflects to the amount you've borrowed as a percentage of your available credit, accounts for 30% of your credit score.

Home equity
Ideally, you should have at least 20% equity, based on your home's current appraised value. Most lenders will require an appraisal before refinancing your loan, and if the value of your home has dropped, you may be unable to refinance, or decide it's not worth the trouble.

Homeowners with less than 20% equity may still be able to refinance, but they'll probably need to buy private mortgage insurance, which is no longer available in some markets.

An unencumbered first mortgage
If you have a home equity loan or line of credit, you'll probably need to pay it off before refinancing.

Before a lender will refinance your first mortgage, it typically needs approval from the lender that holds your second mortgage. The lender with the second must agree to "subordinate" the loan.

In the past, that hasn't been a problem. But in the wake of the credit crunch, many lenders are eager to rid themselves of home equity lines and loans, which are considered riskier than first mortgages. As a result, many lenders are refusing to subordinate their loans.

A conforming loan
Borrowers in high-cost areas may not qualify for the lowest rates, even if they have outstanding credit, lots of equity and no second mortgage. That's because the interest rates for loans that exceed $625,000 — known as jumbo loans — have remained high. The [national] average jumbo rate is 6.8%.

Nationwide, the lowest rates are limited to loans of $417,000 or less. Those are known as "conforming" loans because Fannie Mae and Freddie Mac will buy them in the secondary market.

Patience
Some borrowers are waiting days to get their calls returned, if they can get through at all. In this market, "Patience is not just a virtue, it's a necessity."

NOTE: If you have details on the Chicago refinancing market, we invite you to post them by clicking on the Comments link below. Please identify yourself.

New-Construction Update: 1/19/09

Aquilo (formerly 2930 Sheridan Tower)

Every Monday, with help from our friends at YoChicago.com, we present vital data on five condos under construction.

To view Building Profile on ChicagoCondosOnline.com, click address. To visit developer’s Web site, click name. To use Chicago's best condo search engine to review in-depth profiles of 900+ new-construction properties and find the unit types that meet any combination of 100 preferences, click here.

2930 N. Sheridan, Aquilo
NA of 252 available, 1-2 BR, $210K-$340K, Delivery now
Developed by Kroupa, Marketed by Jameson

2800 W. North, 2800 W. North
16 of 16 available, 2 BR, $310K-$400K, Delivery Summer '09
Developed by NA, Marketed by North Clybourn Group

1615 N. Wolcott, Urban Sandbox
4 of 8 available, 3 BR, $710K+, Delivery March '09
Developed and Marketed by Ranquist Development

2730 N. Ashland, Parkland
NA of 16 available, 1-3 BR, $300K-$560K, Delivery NA
Developed and Marketed by Chicago Graystone Development

6955 N. Greenview, Greenmoore
9 of 12 available, 2-4 BR, $320K-$600K, Delivery February '09
Developed by MC&J Building, Marketed by Camelot Realty

Previous New-Construction Updates

If Your Developer Defaults

If you have purchased a unit in a building in which the developer becomes involved in a foreclosure action or defaults, check out the article by David Mack in Sunday's Chicago Sun-Times. In essence, the article concludes:

"Buyers who have closed on their units are protected against legal action by lenders that foreclose on defaulting developers. Those who have not closed would not be so fortunate. Their earnest money may be at risk, since they do not have title insurance protection. Unless the developer escrowed their deposits, which is doubtful, their money is at risk."

Bad News for Buyers, Sellers & Owners?

On the surface, it appears that more bad news for condo buyers, sellers and owners is on its way. But at least one industry expert we contacted sees a silver lining. The news, as reported by Mary Umberger in Sunday's Chicago Tribune:

"It's about that condo you're thinking of buying—or refinancing: The price is going up.

"I'm not talking about the sale price, but the latest fee that will nick you unless you're making a sizable down payment. With many lenders already casting a wary eye on condo loans because of their default rate, Fannie Mae has upped the ante by adding a fee of .75 percent of the loan amount of a 30-year fixed mortgage, for borrowers who put down 25 percent of the purchase price or less, effective April 1.

"For a condo priced at $300,000, with a mortgage of $240,000 (a 20 percent down payment), if Fannie will be purchasing the loan from your lender, it will assess the buyer an additional $1,800.

"Mortgage broker Dan Green of Mobium Mortgage predicts that many of the affected condo loans will stroll over, instead, to another governmental outlet, the Federal Housing Administration.

"The FHA insures low-down-payment loans; after being relegated to the sidelines during the housing boom, the FHA is soaring in popularity because it's the only recourse for many borrowers. So, while that may be a relief for buyers, it merely shifts the risk from Fannie to the FHA.

"Green says the fee will affect the majority of condo buyers these days, and it will particularly ding the pocketbooks of first-time buyers, many of whom are drawn to condos.

"The fee is starting to show up on lenders' rate sheets, even for closings scheduled before April 1, because of the time lag between closings and the packaging and sale of the loans to Wall Street, which might not be until after April Fools' Day."

* * * * *

Asked to comment on the news reported in the Tribune, industry experts we contacted responded as follows:

Dave Hanna, president of the Chicago Association of Realtors:

"First and foremost, it is the end cost of a loan a borrower should be looking at. A conventional loan, with a fee of under a point, may very well still put a buyer with a good credit score and reasonable down payment into a condominium home at a great interest rate and monthly payment, especially in relation to the net cost of loans in the past 24 months.

"FHA is a competitive alternative, letting a borrower with good or challenged credit get a low rate and put less down. The ability to use less money to get into a home, especially for first-time buyers, is a key component to getting them into the market now, when they can capitalize on high inventory and prices under their high point of 2005-2006.

"Historical perspective and current market conditions say this is a time for smart buyers to be in the market."

Jim Merrion, regional director of RE/MAX:

"Obviously, any increase in the acquisition cost of real estate is detrimental, especially in our current market.

"Unfortunately, we are currently seeing the residue of Fannie's having been stung previously with mortgage lending abuse, so they are moving to protect their loans, perhaps too agresssively, but that is what happens as the pendulum swings. Ultimately, this factor should drop.

"As far as the FHA option goes, my recollection is that the condo building has to be pre-approved in order for that unit to qualify, and that other FHA criteria may eliminate that as an option for some properties."

Mario Greco, a top-producing Rubloff agent:

"Much like the effect that Cook County's ill-advised attempt to foist an additional $3/$1000 of purchase price onto buyers in Spring of 2007 (later switched to sellers), this new fee will cause many people to jump into the market initially and cause closings to be moved up to 3/31/09 or sooner. So, short term, it will accelerate sales.

"If it stays in place, it may slow the market down a bit--but remember, rates are below 5% on a 30-year fixed mortgage, so that will hopefully offset any potential negative effect that this new fee may have.

"All of that being said, the timing and thought process behind the new fee is suspect at best."

Rubloff President Jim Kinney:

"Well this is certainly not a step in the direction of affordable home loans but it is understandable that now the taxpayers are responsible for the losses on these mortgages that the onus is being placed more on the borrower and less on the general population to carry that burden. Unfortunately, it will have a damping effect on the already troubled housing market."

Lauren Mitrick, president, Women's Council of Realtors & agent at Real Tek Realty:

"Just another bump in the road that we need to adjust to and overcome. I'm not surprised we are hit with another change in the lending guidelines. It is all about coaching and educating our clients. We need to stop dwelling on the negatives and realize that interest rates are at historic lows.

"Adding a fee under a point will not break the bank for most, especially since buyers are getting such great rates to begin with, but it certainly does not help in the short-term. Buyers will find a way to overcome, however. They may ask for already-hurting sellers to "chip" in.

"Since the default rate was so high, I can understand the cautious nature and although it does not make our jobs easier, I believe it will help in the long run. We are forgetting that putting 20 percent down has been the industry norm for decades; it may help people realize that you need more than just a pulse to get a loan."

New-Construction Update: 1/12/09

Deming on the Green

Every Monday, with help from our friends at YoChicago.com, we present vital data on five condos under construction.

To view Building Profile on ChicagoCondosOnline.com, click address. To visit developer’s Web site, click name. To use Chicago's best condo search engine to review in-depth profiles of 900+ new-construction properties and find the unit types that meet any combination of 100 preferences, click here.

416 W. Deming, Deming on the Green
15 of 23 available, 1-4 BR, $480K-$2.64M, Delivery NA
Developed by Silverleaf, Marketed by Coldwell Banker

3450 S. Halsted, Bridgeport Condominimums
49 of 67 available, 1-2 BR, $175K-$315K, Delivery now
Developed and Marketed by Mega Group

3952 W. Eddy, Old Irving Condos
10 of 10 available, 2-3 BR, $300K-$380K, Delivery NA
Developed and Marketed by Thomas James Builders

4720 N. Kimball, Kimball Station
15 of 59 available, 1-3 BR, $200K-$350K, Delivery spring '09
Developed by NA, Marketed by @properties

2318-28 S. Canal, Canal Crossing
11 of 60 available, 2-3 BR, $240K-$320K, Delivery NA
Developed and Marketed by Wabash Properties

Previous New-Construction Updates

New-Construction Update: 1/5/09

Whipple Court

Every Monday, with help from our friends at YoChicago.com, we present vital data on five condos under construction.

To view Building Profile on ChicagoCondosOnline.com, click address. To visit developer’s Web site, click name. To use Chicago's best condo search engine to review in-depth profiles of 900+ new-construction properties and find the unit types that meet any combination of 100 preferences, click here.

4226-4230 N. Whipple, Whipple Court
NA of 20 available, 2-3 BR, $210K-$310K, Delivery now
Developed by Schubert Properties, Marketed by Sussex & Reilly

650-670 W. Wayman, Trio
NA of 209 available, 1-3 BR, $270K-$1.3M, Delivery Summer '09
Developed by RDM Development, Marketed by Jameson

505 N. McClurg, Parkview
54 of 268 available, 1-3 BR, $380K-$830K, Delivery now
Developed and Marketed by MCL Companies

4152-4156 N. Elston, Renaissance on Elston
16 of 16 available, 3-4 BR, $290K-$410K, Delivery now
Developed and Marketed by Sergio & Banks

3300 W. Irving Park, Irving Place
NA of 55 available, 2 BR, $240K-$330K, Delivery now
Developed by NA, Marketed by @properties

Previous New-Construction Updates