Home   Wordpress   Log in

Commercial Real Estate Sales Have Fallen Off a Cliff

June 9th, 2009 by thomasjhall | No Comments | Filed in Chicago Real Estate, Real Estate Investments, Real Estate Market

Here’s the article from ChicagoRealEstateDaily.com regarding the tightening of commercial real estate lending, including large residential multi-families.

The graph tells the story:

Meaning of Flag Draped Coffin

June 9th, 2009 by thomasjhall | No Comments | Filed in About Town, Chicago Real Estate

To understand what the flag draped coffin really means … Here is how to understand the flag that laid upon it and is surrendered to so many widows and widowers.

Do you know that at military funerals, the 21-gun salute stands for the sum of the numbers in the year 1776?

Have you ever noticed the honor guard pays meticulous attention to correctly folding the United States of America Flag 13 times? You probably thought it was to symbolize the original 13 colonies, but we learn something new every day!

The 1st fold of the flag is a symbol of life.

The 2nd fold is a symbol of the belief in eternal life.

The 3rd fold is made in honor and remembrance of the veterans departing the ranks who gave a portion of their lives for the defense of the country to attain peace throughout the world.

The 4th fold represents the weaker nature, for as American citizens trusting in God, it is to Himwe turn in times of peace as well as in time of war for His divine guidance.

The 5th fold is a tribute to the country, for in the words of Stephen Decatur, ‘Our Country, in dealing with other countries, may she always be right; but it is still our country, right or wrong.’

The 6th fold is for where people’s hearts lie. It is with their heart that They pledge allegiance to the flag of theUnited States Of America and the Republic for which it stands, one Nation under God, indivisible, with Liberty and Justice for all.

The 7th fold is a tribute to its Armed Forces, for it is through the Armed Forces that they protect their country and their flag against all her enemies, whether they be found within or without the boundaries of their republic.

The 8th fold is a tribute to the one who entered into the valley of the shadow of death, that we might see the light of day.

The 9th fold is a tribute to womanhood and Mothers. For it has been through their faith, their love, loyalty and devotion that the character of the men and women who have made this country great has been molded.

The 10th fold is a tribute to the father, for he, too, has given his sons and daughters for the defense of their country since they were first born.

The 11th fold represents the lower portion of the seal of King David and King Solomon and glorifies in the Hebrews eyes, the God of Abraham, Isaac and Jacob.

The 12th fold represents an emblem of eternity and glorifies, in the Christians eyes, God the Father, the Son and Holy Spirit.

The 13th fold, or when the flag is completely folded, the stars are ! Uppermost reminding them of their nations motto, ‘In God We Trust.’

After the flag is completely folded and tucked in, it takes on the appearance of a cocked hat, ever reminding us of the soldiers who served under General George Washington and the Sailors and Marines who served under Captain John Paul Jones, who were followed by their comrades and shipmates in the Armed Forces of the United States, preserving for them the rights, privileges and freedoms they enjoy today.

There are some traditions and ways of doing things that have deep meaning. In the future, you’ll see flags folded and now you will know why.

A Brief Look at Recovery

June 2nd, 2009 by thomasjhall | No Comments | Filed in Chicago Real Estate, Real Estate Market

Why on earth do we even bother to look at the pending, actives and closed sales data to determine whether or not we’re in recovery?

Even Alan Greenspan says that we should be tracking mens underwear sales - a true leading indicator as to whether or not we’re in an economic rebound.

If you’re sick of taking it in the shorts with this economy, maybe the key is to buy new ones!

Tags:

Chicago Condo Market Review: Units Sold and Median Price

May 7th, 2009 by thomasjhall | No Comments | Filed in Chicago Real Estate, Property Listings, Real Estate Investments

I wanted to share the following two tables provided by ChicagoCondosonline.  The source is a fantastic overview of recent condo sales by area/neighborhood.  While median prices of single family homes has shown an increased bump, median condo price in Chicago remains relatively flat.

Condos represent two-thirds of the real estate sales volume in Chicago so it is important to see the numbers:

Have We Reached Bottom?

May 2nd, 2009 by thomasjhall | No Comments | Filed in Chicago Real Estate, Real Estate Investments, Real Estate Market

How do we know when we’ve reached the bottom of the market? The answer is - we really don’t know. However, I suggest that there are ways to evaluate whether or not we’re close.

One site I view religiously to view the real time data for how real estate is doing in Chicago and through out the nation is Altos Research

Here is the latest data on median home prices in Chicago. While not always the best indicator, the issue isn’t the actual number, but the trending upward.

Why is this significant? I believe it indicates we are reaching price stability because this phenomenon seems to be repeated in many major US markets:

Altos Research - Real Time Median House Price in Chicago

Altos Research - Real Time Median House Price in Chicago

Here is the latest data comparing Denver to Las Vegas and Phoenix - clearly two of the hardest hit areas in the nation:

Denver Median Home Price versus Phoenix and Las Vegas

Denver Median Home Price versus Phoenix and Las Vegas

What does this mean? While it may be entirely too early to predict, what I find interesting is that the trending appears to be moving up in several major markets. If anything, it does demonstrate that inventory is moving.

Looking to buy? Looks like it might make sense to move more aggressively.

Less Than Sobering Investment Approach - A New Spin on the 401K

April 20th, 2009 by thomasjhall | 2 Comments | Filed in About Town, Chicago Real Estate, Real Estate Investments

If you had purchased $1000 of shares in Delta Airlines
one year ago, you will have $49.00 today.

If you had purchased $1000 of shares in AIG
one year ago, you will have $33.00 today.

If you had purchased $1000 of shares in Lehman Brothers
one year ago, you will have $0.00 today.

But—- if you had purchased $1000 worth of beer
one year ago, drank all the beer,
then turned in the aluminum cans for recycling refund,
you will have received $214.00.

Based on the above, the best current investment plan
is to drink heavily & recycle.

It’s called the 401-Keg

Tags:

Why Lower Interest Rates Offset Waiting for Bottoming Real Estate Prices

April 1st, 2009 by thomasjhall | 2 Comments | Filed in Chicago Real Estate, Lending, Real Estate Investments

I wanted to share a great quick analysis as to why lower interest rates matter more than waiting for prices to bottom out.

If you are on the fence thinking that it makes sense to wait for lower prices, take a look at Brian Brady’s quick analysis regarding why paying points to get rock-bottom mortgage rates make sense.

Make sure you understand your time horizon when making a purchase decision.  If you plan to stay put for at least 3 years, waiting for prices to fall further is not the best options.  Rock bottom interest rates offset any further price declines, particularly knowing that inflation is not far off.

Call me with questions.  I can help assess which properties are the right opportunities.

New FHA Loan Limit Guidelines

March 3rd, 2009 by thomasjhall | 2 Comments | Filed in Chicago Real Estate, Lending, Real Estate Investments, Real Estate Market

My in-house mortgage guy, Brian Cumpton just passed along the following good news regarding new FHA loan limits.  The new albeit temporary loan limits will certainly help home buyers with limited resources.

The new stimulus bill that was signed on Feb 17th - called the American Recovery and Reinvestment Act of 2009 - allows for higher loan limits on FHA transactions.  These are temporary loan limits starting March 4th until the end of the year, December 31st, 2009.  Transactions must close by the 31st in order to access the higher loan limit, with no exceptions.  Below are the temporary loan limits:

1 unit  417,000
2 units 533,850
3 units 645,300
4 units 801,950

This is great news and will allow for all of us to access and put together additional transactions that we would have not been able to.  Remember the advantages of the FHA program:

- 3.5% down payment (1-2 Unit)
- 10% down payment (3-4 units)
- the down payment can be a 100% gift from a relative
- No minimum credit score (unlike conventional programs)
- No reserves required (unlike conventional programs)
- 2 years from a Bankruptcy discharge date (4 years for conventional)
- 3 years from a Foreclosure discharge date (4 years for conventional)
- 85% of rental income is added to borrower’s income (75% for conventional)
- Non owner occupied borrowers with no occupying borrower requirements (Kiddie Condo - parents as co borrowers, etc…)
- Renovation Loans allowed

This is great news and we should all share with our clients as this will help make transactions that otherwise would not have been able to be put together.  Remember, this is good through December 31st, 2009.

Don’t Go from Riches to Rags

February 25th, 2009 by thomasjhall | 2 Comments | Filed in Chicago Real Estate, Real Estate Investments, Real Estate Market

I just spoke to a client who told me that a friend of his just attended a seminar about how to buy foreclosures - the market is smoking hot!

I must admit I cringe when I hear that people attend seminars the tell you how to make millions by buying  investment real estate or flipping foreclosures.

Red flag number 1:  If there is so much money to be made buying and investing in foreclosures, why are you wasting your time teaching others?

If it is a licensed real estate professional, educated on local market conditions and has year - YEARS of experience working with investors, I believe it may be worthwhile - if not, buyer beware.

I understand that one of the suggestions made during this particular seminar was - because foreclosures are both plentiful and priced at such great values - you should liquidate your 401K in order to pay cash.

YIKES!

If you are unfamiliar with real estate investing, I strongly urge clients to approach an investment with the possibility that the property will continue to lose value.  Investments inherently come with risk.  Insure that the investment compliments your overall investment strategy, not replace it completely.  While foreclosures do represent a high percentage of the active sales in today’s market, they aren’t all created equal.

If real estate investment is new - or you’re still a novice, it is my personal feeling that liquidating your retirement savings account to invest in a new investment vehicle - i.e. real estate - is simply irresponsible.

I currently work and have worked with investors who have purchased investment property - I am actively working with some in this current market, seeking undervalued properties - many of which are not short sales or foreclosures.

Keep in mind that not all foreclosures or short sales are necessarily a good deal.  Many require cash payment - financing may not be available on some foreclosures.  Again - BUYER BEWARE.  Some properties may have building code violations which require immediate repair - understand - when you buy “as-is”, you may inherit a series of issues that may cost thousands more.

If you have not purchased foreclosures before, I strongly suggest you seek out a professional who can guide you through the do’s and don’ts.

If you are seeking investment properties for cashflow purposes, make sure that a rental analysis is done in the area - you want to make sure that the projected income is realistic and attainable.  There are an increasing number of properties available for rent on the market - rents are not necessarily climbing.  Be sure to understand the rental dynamics in the area in which the future investment property is located.

Make sure that real estate investing does not make you go from riches to rags!

Condo Buyers Continue to take it up the Fannie

January 22nd, 2009 by thomasjhall | No Comments | Filed in Chicago Real Estate, Lending, Real Estate Investments, Real Estate Market

Unfortunately April 1 will take on new meaning this year - for condo buyers, Fannie Mae is no longer willing to be the fool.

Fannie Mae is adding a .75 point fee to the mortgage amount of condo buyers with less than or equal to 25% downpayments.  In the interest of recouping the significant writedowns, Fannie is imposing the fee to mitigate risk.

While this will impact buyers of condos, first time home buyers may be able to offset the Fannie fee with the $7,500 first time home purchase credit, which is expected to become a true credit that will not need to be paid back.

Another alternative to avoid the fee is to explore FHA financing.

Bottomline (ahem) - if you plan to stay in your condo/home for at least 5 years, the rates and current prices of properties still make it worthwhile to consider purchasing now.

« Older Entries