Monday, September 15, 2008

CHICAGO’S HOME MARKETPLACE IS ‘STABILIZING’ AS PRICES START TO RISE

Desperate for any positive news on the nation’s icy housing market, home sellers recently felt a warm breeze of hope that the worst may be over, experts say.

Sales of existing homes rose 3.1 percent nationwide in July, as bargain hunting buyers started to snap up deeply discounted properties in sections of the U.S. hit hardest by the housing bust.

And, resale home prices rose in June, compared with May, in nine of 20 major U.S. cities, according to a recently released report by Case-Schiller market indexes.

The Chicago-area is one of the good-news cities. The median price of a home in Chicago increased 5.1 percent in the second quarter to $310,000, compared with $295,000 in the second quarter of 2007.

However, the market is far from back to normal. Uncle Sam now is planning a sweeping takeover of mortgage giants Fannie Mae and Freddie Mac in a move to expand the nation’s pool of home-loan money and stop the plunge in housing prices that threatens the economy.

Experts say it is likely that the bailout will not help borrowers who are behind on their mortgages or stuck with overpriced home they can’t sell.

“With the median home price for a home in the city of Chicago up more than 5 percent, second quarter data continues to show that the marketplace is stabilizing,” said David Hanna, president-elect of the Chicago Association of Realtors.

“Average home sales are closing at 95 percent of list price,” Hanna said. “This shows Chicago’s home buyers are making reasonable offers and finding great deals in the city.”

However, total sales of single-family and condominiums in Chicago only reached 6,210 sales in the second quarter, down 28 percent from 8,628 homes sold in the second quarter of 2007.

“The Illinois housing market has been resilient,” said Kay Wirth, president of the Illinois Association of Realtors. “It is a good market, especially for buyers who now have many choices. The new first-time buyer tax credit and foreclosure rescue program enacted by the Housing and Economic Recovery Act should help stabilize the housing market.”

Experts say if more people believe that the decline in home prices is nearly over, that could bring a boost of confidence to the marketplace and start to end the downturn.

New-home prices definitely are softening, and there are real signs that the home market is starting to stabilize, experts say. For example, after some hefty price cuts C.A. Development recently sold five luxury new-construction homes over the August 24th weekend at its three single-family home communities on Chicago’s Northwest Side.

“Today’s marketplace has created the home buying opportunity of a lifetime,” said developer Paul Bertsche of C.A. Development, who noted that four immediate-occupancy homes are still available at Edgebrook Glen development.

With 4 to 6 bedrooms, 3.5 to 4.5 baths, the homes were previously priced as high as $1.15 million. Now prices start at $550,000. Visit www.edgebrookglen.com.

And, while most of the Chicago-area residential real estate market struggled in 2008, American Invsco closed a whopping 111 units in the first quarter alone at 200 North Dearborn Private Residences, a 47-story high-rise condo conversion in Chicago’s Loop.

The 309-unit 200 North Dearborn not only led the Loop in closings, but the development had more closings than the entire downtown Chicago condominium market, according to Appraisal Research Consolers Ltd.

“It’s a buyer’s market out there and our success in 2008 proves it,” said Nicholas S. Gouletas, chairman and CEO of American Invsco.

“We are averaged seven or eight sales a month at 200 North Dearborn and have surpassed the 50-percent sold mark,” said Gouletas, who has successfully developed, marketed and managed more than 40,000 condominiums nationwide valued at more than $4 billion since 1969.