Archive for October, 2008
October 29th, 2008 categories: Real Estate Finance
Through all of the recent financial upheaval– bailouts, failing banks, a new relief package from the government every few days, a stock market that has gone absolutely bonkers insane–there has been one constant in media coverage–”tight money.” A lot of potential buyers have assumed that there was NO money available. This is simply not true. A loan officer who works in my office has lenders calling him daily saying “We have money, do you have people?”
MORTGAGES CAN STILL BE HAD! There is a variety of products available from reputable brokers. Underwriting standards have tightened a lot–a good thing for all of us and the mortgage industry. Documentation has become key to getting a mortgage today–you have to prove you are worthy of the credit and document your income and assets. This is the way it used to be in the “good old days” and it is not a bad way. With proper loan documentation and a good credit score, there is no problem obtaining a loan.
Would now be a good time to invest in a short sale, bank-owned property, or a foreclosure–might be worth thinking about. . . if you need help with the decision, please call me, 312-981-2360–it would be my pleasure to answer your questions.
Related article: Agency conforming loan, what is it?
Spoken by Ruth Karel |
October 24th, 2008 categories: Lifestyle
This is another discussion about the differences between city living and suburban living–good for a few more posts. Some of the questions about noise and parking are discussed in this edition.
- Noise can be a problem–in the Lincoln Park and Lakeview neighborhoods, it can be the exuberance of bar and restaurant patrons leaving at the end of their evening. In the Gold Coast and Streeterville, it can be the whistles of hotel doormen calling cabs and people talking loudly while their cars are being returned by parking valets. Another source of noise is the fire engines and ambulances that travel in the neighborhoods–all of them. When you are living in or near the heart of one of the world’s major cities, it will never be as quiet as most suburban homes. Before you make the huge decision to buy a downtown home, there are two things you can do to help with that decision.
- First, drive through the neighborhoods under consideration at different times of day and different days of the week and LISTEN. Think about are you a light sleeper or a heavy sleeper. In the building my husband and I currently live in, the north side is the quiet side and the south side is the noisy side. The north side faces another condo buiding and a small residential hotel. The south side faces Chicago Avenue with the fire engines and ambulances that go with the fire engines.
- Second, think about renting for a year in the neighborhood you like best. A studio or one bedroom home for a year just might be a good idea and a wonderful weekend retreat. The rental money could save you from making an even costlier mistake by moving downtown and finding it doesn’t suit you.
- Parking is essential IF you decide you want a car. Many of the newer buldings have deeded parking only. Deeded parking is just like another condo unit–it has a property tax identification number, a separate small tax bill and frequently a small monthly assessment. If you choose a newer building, be sure you buy a parking space. If you don’t have a car when you buy your home, it doesn’t matter–BUY A PARKING SPACE! More than likely you can rent the space to another owner until you need it. HAVING A PARKING SPACE IS ESSENTIAL FOR RESALE! Newer condo buildings frequently have deeded parking. A deeded parking space may have a small additional monthly assessment. The older buildings usually have parking spaces that can be rented for a monthly fee. The really older buildings (what we call vintage in Chicago) may not have parking. In that case find out where the closest parking is available,how much it costs and decide if you want to be walking home on a cold, icy, snowy Chicago January evening.
Spoken by Ruth Karel |
October 23rd, 2008 categories: New Developments
Our beloved Chicago Spire has stubbed its toe on today’s economic conditions. Liens have been filed against the developer and construction has stopped. An inside source said that the developer has been in Dubai looking for funds–one of the best sources of money in today’s world. A number of articles have been published in a number of publications–the one below is, in my opinion, the best and most comprehensive. If you like this blog post, please visit:
Spire pay dispute spurs doubt
Calatrava among consultants filing millions in liens against developer
By Mary Ellen Podmolik and Blair Kamin |Chicago Tribune reporters
- October 18, 2008
The Chicago Spire’s penthouse may be sold but there is growing doubt whether the project will rise out of the hole that’s been created at 400 N. Lake Shore Drive.
Consultants on the project are starting to line up seeking payment for their work on the development, designed to become the tallest skyscraper in the United States and one of the tallest in the world. The most well-known of the consultants, architect Santiago Calatrava, filed a lien on Oct. 8 through his Lente Festina Ltd., seeking more than $11.3 million in payment from Spire developer Shelbourne Development Group Inc.
Separately, Chicago-based architectural design firm Perkins+Will Inc. filed a lien against Shelbourne for almost $4.85 million in payment. The two liens were filed with the Cook County recorder of deeds.
The liens suggest the project’s financing, as well as its feasibility, is shaky.
Reached at the family’s home in New York, Calatrava’s wife, Tina, declined to comment. Perkins+Will did not return phone calls for comment.
A spokeswoman for Irish developer Garrett Kelleher said the firm knew that the liens were coming and continued to have dialogues with the companies. However, Shelbourne disagrees with the amount the firms say they are due.
“These guys have been paid well,” said spokeswoman Kim Metcalfe. “It’s clearly a four-year project. The project payment and delivery is over that four years. The amounts are under dispute.”
The Spire captured the public’s imagination, not only because of its great height and uniquely twisting design, but also because of the charismatic Calatrava’s involvement. He has been the public face of the project, not only involved in every aspect of the project right down to custom door handles, but also wowing crowds as he made sketches of the design at public meetings.
Along with the city’s bid to host the 2016 Summer Olympics, the iconic proposal came to symbolize Chicago’s aspirations to become a “global city,” a worldwide center of culture as well as commerce.
But a faltering economy and seized-up credit markets have brought visible work on the project to a standstill. Currently the site is simply a circular hole, 76 feet deep and 110 feet across, that is surrounded by caissons to support the skyscraper’s concrete core. The East Water Place Townhome Association, which had been conducting weekly meetings with the developer about the project adjacent to its building, told residents earlier this month the meetings had been discontinued because the Spire’s construction had been halted.
News of the liens was first reported by Crain’s Chicago Business.
Just 21/2 weeks ago Shelbourne sought to inject a bit of optimism into the beleaguered project by announcing that Beanie Babies magnate Ty Warner had signed a contract to buy the two-level penthouse, a unit that was listed for sale at $40 million.
To date, 395 of the building’s 1,194 units have been sold.
“The sales are going very well,” Metcalfe said. “This is the normal course of business for companies to protect themselves, and the market is obviously the 800-pound gorilla in the room.”
mepodmolik@tribune.com
bkamin@tribune.com
RELATED ARTICLES:Chicago Spire Penthouse Sold, Chicago Spire 30% Sold
Spoken by Ruth Karel |
October 16th, 2008 categories: Real Estate Finance
READ THIS NOW! When almost former President Bush authorized a Stimulus Package earlier this year, he created a new kind of loan–the AGENCY CONFORMING LOAN. There are now three types of loans, Conforming, Agency Conforming, and Jumbo.
A traditional Conforming Loan, the vast majority of loans, is anything under $417,000. Usually this kind of loan is easier to get and provides the lowest interest rates. A loan above $697,500 is a Jumbo Loan. They have been around for a number of years. In today’s market it is much harder to qualify for a jumbo loan and you pay a premium in your interest rate that can be as much as 1.5%.
Any loan amount between $417,000 and $679,500 can be a Agency Conforming Loan. The interest rate is somewhat greater than the Conforming loan and less than the Jumbo. It is usually about .25% to .50% higher than the Conforming rate. We know that rates change on all loans–hopefully, this information will give you an idea of what your rate might be. The Agency Conforming Loan amount will decrease in 2009. At this time we just don’t know what the amount will be–many authorities believe it will be in the low $600,000 range. The new limit will vary from place to place
Many people are waiting for prices to go down more–bottom line is that another few months of waiting for a price decrease could cost you and the rate hike might not balance out the price reduction. Loan guidelines are stricter than ever, appraisers are stricter than ever, and a jumbo loan might not be available to you any more. It doesn’t seem possible that A .50% or 1% increase in your loan rate would create a huge difference in your monthly payment. Do the math, I think you might be surprised. It is my belief that in the Chicago area, waiting for prices to go down might not provide what you need to counter a rate increase. If you are going to be looking for a loan from $400,000 to $700,000, my best advice is to use the Agency Conforming loan before December 31, 2008.
Please feel free to e-mail me at ruthkarel@att.net or call me if you prefer, at 312-981-2360. My promise to you is that I will give you honest information–not what I think you want to hear.
Spoken by Ruth Karel |
October 14th, 2008 categories: Market Trends
Today’s blog will qualify as a genuine rant! These days most of us are hearing and watching more news than we probably want to–economic, political, all kinds of news bombards us day in and day out. Some of it is national and some of it is local. What bothers me is that the local weather is treated with all due respect–it follows the national weather on most TV news programs, it follows the national weather on The Weather Channel–it has its proper place. Wouldn’t it be loverly if REAL ESTATE NEWS was treated the same way? Does it make any sense to compare Chicago real estate with say, St. Louis real estate? Or for that matter suburban Chicago real estate?
There is no such thing as NATIONAL REAL ESTATE NEWS! Each geographic market has it’s own peculiarities–prices, demand, supply, financing, even customs are different from market to market. Just as there is no NATIONAL WEATHER! Being a life-long Chicagoan, I know that the temperature can differ at least ten degrees when you travel from the lake front to the western suburbs and the same when you travel from the lake front to the northern suburbs. Let’s all remember that real estate is local in the extreme. What is happening in my market in downtown Chicago is just as drastically different as the weather. There, that’s my Monday RANT!
Spoken by Ruth Karel |
October 1st, 2008 categories: New Developments
Chicago Spire
According to the Chicago Tribune, the penthouse home in the Spire has been sold. It was purchased by the Beanie Baby tycoon, Ty Warner. Mr. Warner’s new home will have a 360 degree view of the city of Chicago and several neighboring states, Michigan, Indiana, and Wisconsin. The two story home is 10,000 square feet in area. The building itself was the feature of one of my earlier blogs. It is the world’s tallest strictly residential building–2000 feet high!I If you are like me, you can’t even imagine how many Beanie Babies it would take to yield anything like the $40,000,000 asking price. Well, at least he doesn’t have to come up with all the cash until 2012! or later! Are we all a bit envious?
Related articles: Chicago Spire Construction Stopped, Chicago Spire 30% Sold
Spoken by Ruth Karel |
