Attorneys practicing in and around the Chicagoland area. Experienced in the practice areas of Real Estate Law, Mortgage Foreclosure Defense Litigation, Social Security Disability, Business Law, & Estate Law.

 - Attorneys practicing in and around the Chicagoland area. Experienced in the practice areas of Real Estate Law, Mortgage Foreclosure Defense Litigation, Social Security Disability, Business Law, & Estate Law.

Is Chicago Real Estate Market Headed to a Slump? [VIDEO]

Is Chicago Real Estate Market Headed to a Slump? Real estate expert opinions

Is the Chicago real estate market headed to a slump?

People’s opinions vary based on whether they are looking to buy or sell and what neighborhood of Chicago or suburb they live in.

A panel of real estate experts appeared on News Views on ABC7 Chicago to discuss this topic with host Judy Hsu.

The panel included Tommy Choi, president of the Chicago Association of Realtors, Orphe Divounguy, chief economist with the Illinois Policy Institute and Paul Wells with Re/Max of Barrington.

You can watch their entire discussion on the ABC7 Chicago website.

CLICK HERE TO WATCH THE TWO-PART VIDEO

 

 

Chicago Underwater Mortgages Over Twice National Average

Chicago Underwater Mortgages Over Twice National Average

In this post, we discuss a recent report that stated that the number of people with underwater mortgages in Chicago is twice the national average.

The inventory of homes in Chicago and the Chicagoland area has been fairly low for the past several years.

The Chicago area has been slower to recover from the real estate market crash than the rest of the nation.

There have been a few reasons for this.

One of the biggest problems for homeowners in Chicago though has been that so many people have so little equity in their homes that they can’t afford to sell them.

 

Chicago Underwater Mortgage Rate

At the end of the 2019 second quarter, a little over 7.8% of Chicago-area homeowners had a mortgage had negative equity.

This is according to a property information report from CoreLogic.

The same report stated that the national negative equity rate had dropped to 3.8 percent during the second quarter.

The only major city with a higher negative equity rate is Miami.

Chicago did, however, still beat out Miami for the highest number of underwater homes with a little more than 104,000.

This is more homes than New York City and Los Angeles combined, which totaled just under 97,000 between the two of them.

Another 1.6% of Chicago-area homeowners were in the “near negative equity” range, meaning their home has equity of under 5 percent.

 

What this means for Chicago homeowners

Equity that small often discourages homeowners from selling because they won’t end up with enough to buy a move-up home after paying commissions and other sale expenses.

First Time Home Buyer Mortgage WorkshopThe total of underwater mortgages and near negative equity homeowners is 9.4%.

That comes out to almost 125,000 homeowners that are stuck in their home without enough equity to sell.

Still, that is actually an improvement.

In 2018, there were 141,200 Chicago-area homeowners who couldn’t afford to sell.

 

What’s holding back the market

There have been several factors holding back the Chicago real estate market, including economic uncertainty and high property taxes.

Property tax bills Kane & DuPage CountyThere has been a comparatively slow revival of the Chicago area economy after the mid-2000s economic recession.

Even though the real estate market has slowed, property taxes have continued to rise.

Many homeowners are also wary of even more tax increases on the horizon.

Illinois and Chicago have both experienced a loss of population for the past five years, and that has led to reduced demand for homes as well.

 

Home prices in the Chicago area have continued to climb, however, they continue to recover at a slower rate than the rest of the country.

 

Source: Chicago way ahead of U.S.—in those who can’t afford to sell their home – Crain’s Chicago Business


* Advertising Material: To the extent that the information in this post is interpreted as attorney advertising in accordance with the Illinois Rules of Professional Conduct or within the meaning of state bar rules from all other localities, this statement is made pursuant to those rules.

Specialties: Specialization claims are prohibited by Illinois Supreme Court Rules and we do not claim to be specialists. The content of this e-mail is organized and presented for the sole purpose of general information. None of the included content should be construed as legal advice. Viewing this e-mail or e-mailing the account holder does not create an attorney-client relationship. NOTICE: This page may be considered advertising material.


 

The Law Offices of Lora Fausett P.C. provides real estate law services including loan modificationsbuying and selling legal assistanceshort sales and deeds in lieumortgage foreclosure defense, and more.

Located in Glen Ellyn, Illinois and serving clients in DuPageCookKane, Will, and Kendall Counties.

For Information Call 630-858-0090

 


 

Will Illinois Pass Rent Control Law?

Rent Control Debate in Chicago Illinois on WTTW

In this post, we share a video featuring Illinois rent control advocates and opposition discussing their positions.

The state of California just passed a rent control bill, becoming the third state to do so.

Will the state of Illinois could be the next state to pass rent control?

The only states that currently have rent control laws are New York, California, and Oregon.

Rent control laws have been barred in Illinois since 1997.

The Illinois legislature has considered repealing the rent control ban.

A bill introduced by state Rep. Will Guzzardi has called for the ban against rent control laws to be lifted.

Dast the previous legislative session, the bill failed never made it out of the commercial law subcommittee of the Judiciary-Civil Committee.

With proponents and opposition groups formed, the battle is not over yet.

A new bill has been introduced to the Illinois lawmakers that calls for repealing the rent control ban and establishing six “regional rent control boards” across the state.

So what is rent control? How do renters benefit?

Jawanza Malone of the Lift the Ban Coalition, and Michael Mini, executive vice president of the Chicagoland Apartment Association, met recently on WTTW Tonight to discuss their positions.

 

Read the original article, view the video and read the transcript on WTTW.com

 


The Law Offices of Lora Fausett P.C. provides real estate law services including loan modificationsbuying and selling legal assistanceshort sales and deeds in lieumortgage foreclosure defense, and more.

Located in Glen Ellyn, Illinois and serving clients in DuPageCookKane, Will, and Kendall Counties.

For Information Call 630-858-0090

 


 

 

Lightfoot Favors Graduated Real Estate Transfer Tax for Chicago

Chicago Gold Coast Real Estate subject to real estate transfer tax

In this post, we discuss a proposed graduated real estate transfer tax for property sales in the city of Chicago supported by Mayor Lightfoot.

The City of Chicago is facing an $838 million budget gap faces next year.

Mayor Lightfoot says she doesn’t want to increase property taxes.

Instead, she has proposed taxing high valued homes at a higher transfer tax rate.

 

During the most recent city council meeting, Mayor  LoriLightfoot said her administration will be planning a graduated real estate transfer tax.

Chicago Mayor LightfootLightfoot explained her reasoning: “This will bring relief to homeowners whose houses sell for under $500,000, while owners with higher-valued homes will pay more of their fair share.”

She further said, “We are committed to addressing homelessness and housing instability, and putting real resources toward these problems.”

The idea of a graduated real estate transfer tax in Chicago has been proposed before.

In 2018, the idea was promoted in the Chicago Sun-Times by Marisa Novara, at the time a Metropolitan Planning Council member, and author Daniel Kay Hertz.

At the time, then-Mayor Rahm Emmanuel said that their idea “tax treated homeowners like an ATM.”

But in 2019 Daniel Kay Hertz is now the policy director of the Chicago’s Department of Housing and Marisa Novara is now Housing Commissioner of the DOH. They have the opportunity to promote their ideas directly to lawmakers.

In her speech in Springfield after becoming mayor, Lightfoot said that the city needed help with pension obligations.  Governor J.B. Pritzker said that this was not an option.

 

Now the city needs to find another way to fund half-a-billion in new pension obligations over the next three years.

Property Tax Assessment - CalculatorMany Chicago homeowners on the north side are already still in shock from large increases in their property taxes last year.

Homeowners in Illinois already pay the second-highest property taxes in the country.

Mayor Lightfoot has said she doesn’t want to go to the “old playbook,” and increase property taxes again.

For now, she is trying to “avoid that measure,” but has also said that “nothing was off the table.”

Will an increased real estate transfer tax on homes over $500,000 be the solution?

At this point, we will have to wait and see.

 


The Law Offices of Lora Fausett P.C. provides real estate law services including loan modificationsbuying and selling legal assistanceshort sales and deeds in lieumortgage foreclosure defense, and more.

Located in Glen Ellyn, Illinois and serving clients in DuPageCookKane, Will, and Kendall Counties.

For Information Call 630-858-0090

 


How Fast Are Chicago Homes Selling in 2019?

In this post, we look at recent home sales data and the analysis of a top Chicago real estate agency leader to determine how fast Chicago homes are selling in 2019.

If you are planning or even just starting to think about selling your home in Chicago, it’s an obvious question to ask yourself:

How fast are homes in Chicago selling?

The rate that homes are selling and the time spent on the market gives you insights into how strong the real estate market is and what the trends are.

 

Average days on the market in Chicago

For Sale SignA simple market time analysis is available through many real estate databases.

For example, Redfin provides a market trends analysis that is based on the averages of all homes sold.

Redfin Chicago Housing Market Trends

As of August 2019, Redfin data shows the average number of days on the market for a house in Chicago is 57 days.

This gives you a simple trend analysis but has a couple of flaws. It looks only at averages and only looks at homes that sold.

If you are not looking at how long homes sit on the market without selling, how many get pulled from the market, and when homes are pulled off the market, you’re not seeing the entire picture.

 

How fast homes sell or don’t sell in Chicago

In order to get a more accurate view of the market that also includes homes that are not selling, you need to give new listings enough time frame that the market gets to play out.

Gary Lucido of Lucid Realty in Chicago performs this analysis each August, using homes that were listed in late February/ early March.

This gives a measure of the market beyond just average homes that sell. It is still imperfect because the results of this analysis will be slightly tainted by the common realtor practice of relisting properties that are not selling in order to make it appear new again and increase visibility. However, it does still give you a wider view.

How fast are homes selling in Chicago or not selling?

To summarize these results:

  • 24.5% of the listings sell within the first two weeks.

That’s pretty fast but it’s slower than in 2018 when 30% of Chicago houses sold in the first two weeks.

  • 4% of the listings get pulled from the market in the first two weeks.

These numbers are comparable to 2018. Most likely many of those homes came back as new listings fairly quickly because that is a short amount of time to have a home on the market before giving up.

  • At the end of 30 days 36% of homes have gone under contract and not quite 13% have been pulled from the market.

The market in this regard is definitely slower compared to 2108. Last year 41% of homes were selling within 30 days.

  • At the end of the 5 1/2 month period studied,  52% of Chicago homes on the market had sold

This is a lower percentage of sales compared to 57% in 2018. Of homes pulled from the market within this period, 42% were pulled, compared to only 37% last year.

  • 2018 was slower than 2 years prior when 64% sold by the end of the time period.

 

Home sales by age of listing

Probability of Chicago home sale by age of listing

As noted in the data above, 36% of new listings sell within 30 days but only 18% of the listings that are still on the market at 30 days will sell within the next 30 days.

This is totally consistent with what most realtors realize but sellers often don’t: the longer a home sits on the market the less likely it is to sell.

The longer a home is on the market the more it will exhaust the existing pool of buyers. New buyers will enter the market of course, but it is natural for them to wonder what is wrong with a home that has been on the market for six months and not yet sold.

We hope you find this real estate market analysis interesting and useful!

 

This article was based on a post that originally appeared on the Getting Real Blog on ChicagoNow written by Gary Lucido of Lucid Realty.

 


* Advertising Material: To the extent that the information in this post is interpreted as attorney advertising in accordance with the Illinois Rules of Professional Conduct or within the meaning of state bar rules from all other localities, this statement is made pursuant to those rules.

Specialties: Specialization claims are prohibited by Illinois Supreme Court Rules and we do not claim to be specialists. The content of this e-mail is organized and presented for the sole purpose of general information. None of the included content should be construed as legal advice. Viewing this e-mail or e-mailing the account holder does not create an attorney-client relationship. NOTICE: This page may be considered advertising material.


 

The Law Offices of Lora Fausett P.C. provides real estate law services including loan modificationsbuying and selling legal assistanceshort sales and deeds in lieumortgage foreclosure defense, and more.

Located in Glen Ellyn, Illinois and serving clients in DuPageCookKane, Will, and Kendall Counties.

For Information Call 630-858-0090