One Hand Bites the Other

In an effort to supplement Chicago Transit Authority (CTA) funding, Mayor Daley plans to fast track a proposal to increase city transfer taxes for real estate purchases.  A long term remedy for the CTA is certainly necessary after using band aids of emergency funding for about the past year.  However, this proposal begs the question, is it fair to punish new home buyers and investors for CTA budgeting shortcomings?

 The city transfer tax for each transaction will be raised $3 for every $1,000 of purchase price, from $7.50 per $1,000 to $10.50 per $1,000.  Generally, buyers are responsible for city transfer taxes while sellers pay the county ($.50 per $1,000) and state ($1 per $1,000) transfer taxes.  Therefore, buyers will be absorbing the entirety of the tax increase.  Grand scheme we are talking about an extra $300 dollars in tax for every $100,000 in purchase price.

 Additionally, “Aldermen briefed Thursday by Chicago Transit Authority President Ron Huberman and a top mayoral aide said an ordinance imposing the increase will be fast-tracked for City Council approval, with a vote expected at the Feb. 6 meeting.” – Gary Washburn, Chicago Tribune

Here you’ll find the entire article complete with links to register your opposition: http://www.chicagotribune.com/news/local/northwest/chi-council_25jan25,0,2809209.story

Best,

JLC

Industry Concerns

 I recently came across a disturbing phenomenon while doing some industry reading and thought it was worth sharing.  While the debate over precautions against inflation and undeclared recession rages on, it is more important than ever to have a quality mortgage lender in your corner.  The link below will take you to a post from a blog written by a mortgage lender.  I have been a loyal reader for awhile now and am consistently impressed by the content and poignance.  This specific post addresses the dollars and cents cost to a homeowner when their mortgage is “orphaned” due to either lack of follow up or a change in career of their lender.

http://www.themortgagereports.com/2008/01/homeowners-with.html

Below you will find contact information for a couple lenders that I can personally vouch for.  They each handle re-fi, pre-approval, and a number of other services and moreover, are happy to work with first time buyers or people who’s mortgages may have been orphaned.  Just let them know you received their name and number from me.

Kevin J Ferries
Trust One Mortgage
430 W Erie Suite #205
Chicago IL 60610
Office 312-587-7600
Cell 773-425-6276
Kferries@onetmc.com
 
Joe Burke
Mortgage Consultant
National City Mortgage
2021 N. Clark Street
Chicago, IL  60614
Office:  773-665-5290 x. 21349
Cell:  773-742-6707
joe.burke@ncmc.com

This blog is meant to serve as a forum for conversation so please feel free to post comments or questions and I will respond as quickly as possible.

Best,

JLC
 

Neighborhood Update – Lakeview

In this week’s update I will focus on two bedroom/two bathroom condos in Lakeview.  Like most every neighborhood in chicago, there are a multitude of condos currently on the market and in addition, some planned new construction.  To illustrate exactly how much inventory is out there, I will be using absorption rate.  Absorption rate indicates how long it would take for the current inventory in an area to be purchased if the rate of consumption continued at a steady pace, assuming no new units come onto the market.  In order to determine that pace, I’ll use the number of closed units in the last thirty days.

Hence, there were 10 sales of two bedroom condos in Lakeview over the last 30 days. (ranging in list price from $252,000 to $489,000)

There are 305 units currently on the market (ranging from $244,950 to $719,900)

 Therefore, it would take approximately 2.5 years to absorb the current inventory.

Meaning for Sellers:

 If you’re selling a two bedroom condo in Lakeview, ideally you should hold off listing it until some of the current inventory is sold.  If waiting is not an option or you plan to buy a larger home, it is of utmost importance that a seller understand the amount of competition out there and moreover, have the willingness to price your property according to market conditions and the direct competition to your unit.  In essence, this means pricing your property the lowest or second lowest within the building or among comparable properties.  Units are certainly still moving, but the ones that are selling create value in the eyes of a buyer.  As with any other type of purchase, buyers determine value by comparison shopping.  A good realtor is crucial to effectively marketing a property under current market conditions.

Meaning for Buyers:

 From the purchasing side, a little over 2.5  years of inventory on the market coupled with still historically low interest rates provides a buyer a classic buy low opportunity.  The chance to search out a good deal in an area where they were previously hard to come by.

I would like to highlight two new developments I visited this week in Lakeview. 

 1. Bellezza at 1624 W. Grace – 16 unit complete gut rehab of one and two bedroom condos with quality appliance packages and finishes.  Bellezza is located on Grace a fairly quiet, residential street, yet still is easily within walking distance of wrigleyville and the shopping and restaurants of Southport Corridor.  Prices range between $299,900 and $369,900.

2. The Winchester at 3175 N. Hudson – 47 unit new construction building of 2 and 3 bedroom homes with lake and city views.  The Winchester is 1/2 a block from Lake Michigan making all that lakeview has to offer easily accessible.  A full amenity building including fitness facility, indoor parking, doorman, and extra storage.  Delivery in Fall of 2009.  Prices range from $479,900 to $759,900.  Additionally, two penthouse units are available for just under $2 million.  For further details visit www.thewinchesterchicago.com

 If you have further questions about any of the properties mentioned here, or would like a neighborhood update for another area please contact me or leave a comment stating the neighborhood.  If any one area garners enough interest, I’ll gladly do the research and provide a post.

Best,

JLC