Living in Lincoln Park Blog

Are you one of today’s savvy buyers who are capitalizing on the current market dynamics, taking advantage of the low housing prices and the near historic low interest rates? A buyer who realizes that they may not be buying at the absolute bottom of the market but who is astute enough to understand they will never be able to time the absolute bottom of the market?  A buyer who understands that over the short term they will be enjoying their new home and over the long term perhaps have greater equity appreciation.

Or are you a wannabe quasi astute buyer who thinks they will know when the market bottoms out and be ready, willing and able to pull the trigger and purchase that home?  The odds are you’ll miss the bottom of the market and be sitting on the sidelines after the turnaround commiserating with your buddies about ‘the one that got away’.

What most people don’t understand is that when home prices turn the corner, the market won’t change by small amounts, dribbling its way to recovery. It will bounce back and increase by large amounts. The odds of being able to continue to save enough money to meet the new down payment requirements before the price increases again are pretty slim.  Think of it this way – for every $1,000 in price increase, you’ll need to save an additional $200 to stay within the 20% down payment guidelines.

Bottom line…are you a wannabe or an astute & savvy buyer?

We’re two months into the  new year, spring is right around the corner and hopefully things are looking brighter for all of us!

For those of you that took advantage of my advice in December, and gifted some or all of the allotted monies to your children, are you ready to make this year’s gift contribution? Why not help your children take advantage of the buyers’ market that we still find ourselves in?

It’s never too late to help your children get a jump start on building wealth through real estate ownership. What’s holding you back from getting started with your home search!

If you’re not familiar with East Lakeview, there’s no time like the present to get a better understanding of all this neighborhood has to offer. It is bound by Halsted on the west and runs north along the lake front from Diversey to Irving Park.

Many of the  condos are vintage and the high rises offer wonderful examples of what life was like in the early 1900′s. Buildings like 3750 Lake Shore Drive and 3400 Lake Shore Drive have exceptional layouts with spectacular lake views. But, not all of the prime vintage buildings are high rises.

As seen here, 445 W. Briar provides a wide, spacious floor plan with high ceilings, generous room sizes and modern amenities like in-unit laundry and central heating and air conditioning. There are also multi-piece crown moldings, vintage baseboard trim and french pane doors. This home is an excellent example of classic vintage meeting modern convenience.

If you’re an aficionado of vintage condos, in almost any price range, East Lakeview has a lot to offer. If  vintage living isn’t your cup of tea, and you’re are looking for more contemporary and traditional condos, you can search Lakeview condos on the MLS and find your perfect next home!

I was talking with a perspective buyer the other day. They were doing all the right things; lease ending in 6 months so begin the home search process online, find a Realtor (me), talk with a lender and determine affordability. Then…decision time…they decided to wait another year. Not necessarily a bad choice. Everyone has different needs & tolerances for the idiosyncrasies of this economy. However what I think many fail to consider is the cost of waiting to buy. While this approach has rewarded those that held off the past 2 years in the form of lower prices and lower interest rates, rates are rising and according to the many economic experts, prices are stabilizing. In fact, in Lincoln Park, some individual home prices seem to be up slightly. When comparing the overall condo sales prices for the year to date in 2011 vs the 4th quarter of 2010, the average closed price is up 5.3%!

So here’s our dilemma…Even if prices fall another 10% this year, the cost of a home will increase if interest rates go up more than 1%. And if prices remain constant and rates go up… well…buyers should not worry where prices are going, they should be concerned where their costs will be later in the year (courtesy of the kcm blog).

While none of us have a crystal ball, the option of buying now is definitely worth considering. Indications are that interest rates are on the rise but no one knows just how much they will go up. Where are you in this paradigm?

A lot of my real estate sales are in Lincoln Park, one of the 77 Chicago community areas. When a great opportunity comes along in any of the other 76 communities, I’m delighted to work with them.

I have recently listed a wonderful 2 bedroom condo on Ashland Avenue that is a surprisingly good value…it has a wide footprint, is only 8 years new and is conveniently located to Whole Foods, X-Sport Gym, the Southport Corridor and the Brown Line. You should check this video out for yourself. In the past 10 days, this particular home has been emailed to perspective buyers 249 times, and that’s just tracking the MLS! Imagine the numbers when you take into account the multitude of home search sites that are out there!

In the past week  ~68 new condos came on the market in Lakeview. While this may sound like a large number, the boundaries of Lakeview are fairly broad; from Diversey on the south to Irving park on the north and the lake to roughly Lincoln on the west. In that area, 21 condos have gone under contract + an additional 13 have closed…that’s pretty good movement!

If this condo doesn’t suite your needs, you can search the entire Chicagoland MLS and find your ideal new home. And, if you are relocating here and your company is offering you relocation benefits as a part of your move, be sure to let me know. Since my company and I cooperate and participate with all of the relocation companies, I want to make sure you take advantage of whatever benefits your employer is offering you.

As the new year begins ramping up, nearly everyone I talk with wants to know “how is the Lincoln Park real estate market doing?” So I thought I’d go with the old adage that a picture is worth a thousand words and make some general comparison from there.

Click to enlarge

If you click on this picture, you’ll be able to see a larger, readable picture of the overall home sales in Lincoln Park for 2010. For a quick review, the average sales price for all single family homes was $1,643,119, condos were $425,224 and multi-units were $813,627.

Click to enlarge

If you click the next picture, you’ll see a larger, readable picture of the overall home sales in Lincoln Park for 2009. Again for your quick review, the average sales price for all single family homes in 2009 was $1,790,627, condos were $449,592 and multi-units were $770,871.

Here’s the bottom line numbers you’ve been waiting for: when comparing 2010 average sales over 2009, single family home prices are down 8%, condos are down 5.5% and multi-unit buildings are up 5.5%. Yes, you read that right, up 5.5%! Looks to me like investors are taking advantage of this market.

What does this mean to you? If you live in Lincoln Park, click on the picture and you can see how the sales were for your particular size of home. If you don’t live in Lincoln Park, contact me and I will happily send you the statistics for your neighborhood. Should you live outside of the Metro Chicago market place, let me know where you live and I will be happy to introduce you to one of the Realtors® from my national (or international!) network.

Whether it’s through getting a great deal on your primary residence or buying rental property, this is a market where where wealth is built! What are you doing to increase your future net worth?

Or, ‘6 Truths from the Chicago Real Estate Front’

So you’re still fence sitting…

Truth #1:  There currently exist ‘some of the best housing affordability conditions buyers have seen in their lifetimes – and perhaps even their parents’ lifetimes’.

Truth #2:  Even the worst housing slump since the Great Depression can’t remove the long-term benefits of home ownership, specifically, slowly and surely building a long-term forced savings plan.

Truth #3:  Mortgage rates are sitting near all-time lows, with 30-year, fixed mortgage rates are 4.875%, maximum conforming loan amount of $410,000 (quoted 7 December, 2010, RWF Mortgage)

Truth #4: Lower prices are making buying and owning more tempting… to everyone!  If you think that by fence sitting you are likely to snatch up that bargain…what do you suppose the other ‘fence sitter’ is thinking?  You guessed it.  You jumped in at the same time as another fence sitter and now that ‘bargain’ price that you’ve been waiting for has been artificially increased. By fence sitting for too long, you’ve created that perfect storm for the seller…the multiple offer!

Truth #5:  The combination of lower prices and cheap mortgage rates has made for the most favorable conditions for home buyers in years.

Finally, Great Truth #6:  All those headlines about the national housing market aren’t nearly as important as what’s going on in the area you are looking to buy into.  The trajectory of home prices will vary a great deal from one place to the next and Chicago Real Estate is rated #12 out of 20 metropolitan areas showing growth in housing prices.

We are passionate about what we do and would love to help you become a homeowner.  The sooner you get off the fence, the sooner you will enjoy all the delights and benefits of home ownership.

As approval requirements for loans in the mortgage market have tightened up, the requirement for a down payment has become significantly more important.  This has left many prospective Chicago home buyers out in the cold.  This reality has brought back into vogue the gift as a potential means of bolstering a purchaser’s assets.

A gift is direct financial assistance from an immediate family member for the purpose of purchasing Chicago real estate.  The amount of the gift is unlimited, but often times specific programs have minimum requirements for the actual borrowers to bring money to closing.  The donor simply needs to provide a signed gift letter, which provides verification of the amount and the source of the funds.

One major consideration that often complicates the gift process is the tax implications for the donor.  Generally, a $13,000 gift is allowable before taxes apply.  One method of maximizing the tax-free portion of the gift is breaking it up among family members.  An example of this scenario would be where each parent in a spousal couple would gift up to $13,000 to their child to a total amount of $26,000 without tax implications.

Another means of maximizing a gift without incurring taxes is to separate the gift between multiple years.  With a bit of planning, gifts in excessive of $13,000 can be broken down into multiple gifts with a portion gifted prior to the December 31^st and the remainder gifted after December 31^st.  Because of this, the end of the year becomes an opportune time for donors and their recipients as the time required for the separation is at a minimum.

So if helping your child purchase Chicago real estate is in your future, now is the time to start planning!

I work with a very diverse group of clients. One group is parents either buying, or helping their kids purchase a condo in Lincoln Park. For those who are planning ahead, this time of year presents a unique opportunity to help your kids with their down payment.  And BONUS!…there is little or no tax implications to you!  Here’s how it works. You can give up to $13,000 per child (or up to $26,000 if given jointly with your spouse) without triggering the IRS gift tax.  Even though I’m not a CPA or tax attorney, this sounds like a pretty sweet deal if you are of the mind to help your children with a cash infusion!

Assuming you have not hit the maximum amount that you can gift, the real beauty to this timing is that you can max it out by the end of December 2010 & gift the full annual amount again in January 2011. So theoretically, a parent, with their spouse, can give their child up to $52,000 in a matter of a few months, which adds up to a pretty substantial sum of money that will surely help with your child’s down payment.  Talk about a Happy New Year!

And, according to the AXA Equitable site, “if you don’t feel comfortable with giving substantial gifts directly to your recipients, the IRS allows another avenue. You can, for example, pay someone’s college tuition or medical expenses on a gift tax-exempt basis — as long as you write the check directly to the institution. This is generally considered a qualified transfer with no dollar limits.” While this is not relevant to helping your kids buy a condo, there may be other benefits to family members.

So if you are looking to purchase a condo this spring for or with your kids, now is the time to start planning. And while you’re discussing the financial options over the holidays, you might want to begin searching for that perfect Lincoln Park condo.

So…What’s the truth about Real Estate Today? The National Association of REALTOR®s (NAR) announced that home sales were up in June. Housing Wire announced that sales had dropped. Real Estate guru Steve Harney says, both of these statements are TRUE!

There are seven major reports, each measuring different data. Some look at average sales price, some look at houses that closed the previous month and another looks at house that went under contract but have yet to close! Bottom line: there are nuances in the reports and both media sources decided to focus on a different nuance; therefore, they are not comparing apples to apples!

What does this mean to you? That you should pick up the phone or type in the E-mail address, but  whichever method you choose, contact a professional REALTOR®! They will explain the headlines, listen to you about your particular situation and help inform you as to how this information may affect you.

Mortgage rates are at their lowest point in over 30 years. Housing prices have stabilized in the Chicago metropolitan area. What are you waiting for? Get off the fence!!