Chicago real estate update

October 26, 2009 by
Filed under: Illinois 

chicagoChicago real estate prices are on the rise, according to Eleanor Goldberg who wrote an article based on Northwestern reports on September 29, 2009.  Goldberg claimed that “Chicago home prices rose in July for the third consecutive month, up 2.7 percent, but prices are still down 14.2 percent from a year prior.”  Even the pricier Chicago homes for sale are improving in terms of price.  The article states that “in terms of a million-dollar house, there has been roughly a $40,000 to $50,000 increase in median sale price in larger, newer homes.”

searstower2A recent Chicago Tribune article written by staff reporter Mary Ellen Podmolik brought attention to the issue of short selling.  The author explained “the practice, which involves selling a property for less than the amount owed on the mortgage, has grown in popularity as an exit strategy for financially strapped homeowners because it doesn’t ding a credit report as deeply as a foreclosure. But because the transactions have to be approved by first and second lien holders, they are languishing. Some real estate agents try to steer clear of them entirely and even specify in their listings that a property is not a short sale.”  According to Podmolik’s research, “During the second quarter, 14 percent of all home sales were short sales and they were made primarily to first-time buyers who may have more flexibility to deal with the long wait times.”

CNNMoney.com and Money Magazine’s 2009 Real Estate Forecast, valid through the end of March 2010, claims that real estate in Chicago will lose value 2.7 percent during the period and will fall on a median home price of $280,000.  This is a decline of about 14.5 percent from the housing market’s peak and a 10 percent change from the same quarter last year.  Analysts estimate the bottom is not even close – perhaps the second quarter of 2010 if they are lucky.  At rock bottom, the analysts hope the damage won’t be too bad.  They are predicting prices similar to those of the first quarter in 2004 when the local housing market was not in great shape either.

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