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Mortgage Rates Not Rising As Expected

by Karen Breen Elia

Economists predicted mortgage rates would climb above 5% in 2014, but this hasn't happened. Why you ask? Market Watch has published a great article explaining why rates have stayed low this year...even lower than 2013. Take a look...

mortgage ratesThere are a few reasons why higher rates never came to pass.

Rates on the 30-year fixed-rate mortgage averaged 4.15% for the week ending July 10, according to Freddie Mac’s weekly survey of conforming mortgage rates. A year ago, rates averaged 4.51%.

“In January, we were projecting at the end of the year that the 30-year would be 5.1%,” said Leonard Kiefer, deputy chief economist with Freddie Mac. “We most recently revised that down to 4.4%.

Supply and demand

Economists had largely expected rates to rise once the Federal Reserve indicated it would taper its purchase of mortgage-backed securities through its quantitative easing program, Kiefer said. Rates did, in fact, rise spike upward due to that indication last summer.

But when the Fed actually began purchasing fewer of these securities, mortgage rates began to fall. That’s because the tapering ended up coinciding with a reduction in mortgage originations — which means fewer mortgage-backed securities were being issued, Kiefer said.

“The Fed’s ‘demand’ for new mortgage-backed securities has declined less than has the new ‘supply,’” Kiefer and chief economist Frank Nothaft wrote in a recent outlook.

And that’s keeping rates down.

Fewer mortgages are being originated in large part because refinance activity is down; with rates no longer at record lows, there are fewer homeowners interested in refinancing these days. Also, while the housing market is improving, there hasn’t been an abundance of first-time home buyers in the market today, and that has been a drag on housing, said Ted Ahern, chief financial officer of mortgage lender Guaranteed Rate.

“There’s not a big supply of mortgages being originated, so that in and of itself kind of keeps the rates down,” Ahern said.

Another reason for the supply/demand imbalance: Global investors buying mortgage-backed securities, said Dan Green, chief publishing officer of The Mortgage Reports, a mortgage blog.

“Wall Street planned for the end of QE3 in a vacuum. There was no consideration given to the health of domestic and global economies or to market-destabilizing geopolitics,” Green wrote in an email interview. “The Fed has been exiting the market exactly as forecast, but not as quickly as global investors have joined. Demand for mortgage-backed securities still outweighs supply, which has lowered consumer mortgage rates.”

Low inflation, a weaker-than-expected economy in the first quarter and a “decent, but not great” housing market are also forces contributing to keeping mortgage rates low, Ahern said.

If you’re mortgage shopping

Eventually mortgage rates will go higher — unless there’s some sort of slowdown in economic growth, a recession or some big shock to the economy, Kiefer said. “It’s likely to be gradual, but [rates are going] up, for sure,” he added.

Once it’s clear the economy is expanding, mortgage rates should be on their way up, Green said.

In fact, those in the market for a mortgage may want to pay close attention to any marked improvement in the job numbers and any increases in inflation, Ahern said. Those are likely to be tell-tale signs that rates are heading up, he said.

MAKING A POSITIVE DIFFERENCE IN PEOPLE'S LIVES.

Karen Breen Elia & Louis M. Elia, REALTORS®, are brokers for homes, condos, and multi-unit properties on Chicago's North Side.

ChicagoCityHomes, RE/MAX Exclusive Properties
2951 North Lincoln Avenue 
Chicago IL 60657
Toll Free: (866) 404-3585 Fax: (773) 938-1467 
Send An Email

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6 Tips For a Stress Free Summer Move

by Karen Breen Elia

Each year around 65% of all household moves take place between May and September, so obviously you need to plan ahead if you’re moving to a new home this summer.

stressWhile the act of relocating to a new place can certainly be exciting, there are, of course, challenges to be met, especially during a hot, busy summer season.  Although there are no foolproof ways to make the experience totally stress-free, there are, thankfully, actions you can take to make your “adventure” a more positive one.

Sage advice to heed includes:

  1. Plan ahead!  Contact moving companies or truck rental firms at least six weeks in advance if possible. Try to schedule your move for a weekday and at a time when traffic is less heavy.  Make prior arrangements for the care of young children and pets on moving day—for their sake and yours!  Line up commitments from friends and family if you’ll need their assistance for the move.
     
  2. Be strategic about packing.  Gather necessary supplies and start packing early.  Whether it’s one room, one cabinet, or a drawer at a time, weed through what may be years of accumulation.  Decide what to donate to charity, give to a friend, recycle, trash, pack now, or keep handy until moving day.  Label boxes as to contents and intended room in the new home.
     
  3. Take care of logistics in advance.  Ideally, you should contact your future utilities provider at least two weeks before you move regarding turning on your electricity, gas, phone, cable, and internet before your arrival, if possible.  Contact any new school for a list of documents needed for registration.  Do not pack these materials away it’s better to hand carry them for easy retrieval.  If you’re going to need to spend a night in a hotel, make those arrangements early.
     
  4. Make life simple.  Keep all small parts labeled, in plastic bags, and all together in one box.  Likewise, take pictures of electronic hook-ups for future use.
     
  5. Consider the heat.  Dress appropriately, stay hydrated, and refrain from placing certain items in a hot truck—candles or wine, e.g.  Click here for tips on packing cleaning products and toxins.
     
  6. Stay calm.  Relax, whistle, smile, and anticipate the pleasure of living in your new home. 

MAKING A POSITIVE DIFFERENCE IN PEOPLE'S LIVES.

Karen Breen Elia & Louis M. Elia, REALTORS®, are brokers for homes, condos, and multi-unit properties on Chicago's North Side.

ChicagoCityHomes, RE/MAX Exclusive Properties
2951 North Lincoln Avenue 
Chicago IL 60657
Toll Free: (866) 404-3585 Fax: (773) 938-1467 
Send An Email

We know Chicago Real Estate!  Call us today!

New Condo Project For Ukrainian Village

by Karen Breen Elia

The Chicago Architecture Blog has reported a Chicagoland developers plans to turn a Ukrainian church building and school into 20 condominiums. Read the story here...

A Chicagoland developer is expected to get a thumb’s up on his plan to turn a Ukrainian Village church building with an attached school into 20 condominiums.

Alex Troyanovsky bought the former Saint John’s Evangelical Lutheran Church (913 North Hoyne Street) in February of last year. A month later, the city named the Henry Worthmann & John Steinbach-designed buildings a city landmark. Worthmann & Steinbach designed at least 30 churches in Chicago.

When the Commission on Chicago Landmarks meets this week, it’s expected to vote in favor of the residential conversion, with certain conditions:

  • ulrainian villageThe stained glass windows must be preserved
  • Walls can’t end at an exterior window
  • New windows must have a historic looks, similar to the existing windows
  • The rooftop addition must be dark in color

The developer also wants to punch a series of skylights into the roof of the building, but the landmarks commission wants proof that they’re necessary first.

It’s been a rough life lately for the church.  It was built between 1905 and 1906 by German immigrants, though the congregation and school trace their history back to 1867.  Eventually (possibly in 1974?) the original congregation left this building.  It was later occupied by several other churches over the years.

By 2002, when it was known as the Central Hispanic Church, an engineers report noted significant structural movement.  Enough so that in places the floor had separated from the walls.

ukrainian villageIn 2005, the interior was stripped bare, with all of the pews and other furnishings removed.

In 2009 a city water main broke and the basement was flooded with gushing water for months before it was discovered and stopped.

Scavengers have ripped out all of the building’s plumbing and wiring, causing extensive damage in the process.  They also made off with some of the stained glass windows.

With the church is such terrible condition, it’s easy to understand how the city would allow it to be converted into residences.  Let’s hope the new owners are able to reverse what age, thieves, and neglect have done to the buildings.

MAKING A POSITIVE DIFFERENCE IN PEOPLE'S LIVES.

Karen Breen Elia & Louis M. Elia, REALTORS®, are brokers for homes, condos, and multi-unit properties on Chicago's North Side.

ChicagoCityHomes, RE/MAX Exclusive Properties
2951 North Lincoln Avenue 
Chicago IL 60657
Toll Free: (866) 404-3585 Fax: (773) 938-1467 
Send An Email

We know Chicago Real Estate!  Call us today!

To Fix Or Not To Fix?

by Karen Breen Elia

I am often asked, “Should sellers fix up their home before selling?” First, let’s talk about the stuff any Realtor is going to tell you so you have context for the rest.

toolsIt is easier to sell a house that is attractive to buyers and shows as being well-maintained. That is a matter of doing a little fix-up, but mostly clean-up. Make sure pipes aren’t leaking, for instance. That is relatively easy and not expensive. If your home really needs painting consider doing that. These are not high priced issues. Below we are talking about the expensive items.

If your house has structural defects or other problems that are expensive to fix you have more challenging decisions to make. First, remember that every house has defects! That is simply the nature of a complex structure. Second, savvy buyers know to expect defects so don’t try to hide them. Don’t kid yourself that if a problem can’t be seen easily it won’t be found out.

Most buyers assume there are some problems with any house. If they make an offer that you accept they will pay for a professional home inspector who knows Chicago real estate. Good buyer inspectors are very thorough. They are being paid by the buyer and are looking out for the buyer’s interests, not yours. It is not unusual for an inspection report to be in excess of twenty pages…in small type! Being honest with yourself about defects will prepare you better when you are faced with that inspection report.

So, the question becomes “Do I fix the problems before going on the market, or do I make it clear that I am selling “as-is” and discount the price accordingly?” The obvious follow-up question is “If I spend the money before selling, will I get that money back in the final sale price?” The general answer is that it depends on the nature of the defect and magnitude of the likely cost of repair.

Potential buyers are most likely to overestimate the cost if they have to make the repair and under-estimate the cost if the seller is paying. Cost versus value then becomes a negotiation to establishing a final purchase/sale price. If the cost of repair is major, such as a septic system, it makes the most sense to repair it before selling.

The best way to go about making these decisions is to pay a professional home inspector in your Chicago real estate market to make an inspection on your behalf as the seller. Their report will give you a thorough list of issues you might be faced with. It will also give you the tool to get estimates from contractors to make the repairs. Then you have a sound basis for making decisions.

An added benefit to having your own inspection on hand is that you have a professional document that you can use when negotiating with a buyer. Be practical and be prepared with your own inspection.

MAKING A POSITIVE DIFFERENCE IN PEOPLE'S LIVES.

Karen Breen Elia & Louis M. Elia, REALTORS®, are brokers for homes, condos, and multi-unit properties on Chicago's North Side.

ChicagoCityHomes, RE/MAX Exclusive Properties
2951 North Lincoln Avenue 
Chicago IL 60657
Toll Free: (866) 404-3585 Fax: (773) 938-1467 
Send An Email

We know Chicago Real Estate!  Call us today!

Chicago Real Estate Market Trends for May 2014

by Karen Breen Elia

All-cash offers are an unusual real estate tactic, but often times are a winning strategy at the negotiating table, and are presently on the rise. The National Association of Realtors® reports market share of all-cash purchases has risen and currently makes up 33 percent of the market. This is a unique trend, especially since the market has experienced a decrease in distressed homes and investor activity.

Economists point out many reasons for this popular trend. One is restrictive lending standards have caused many buyers, especially wealthy ones, to forgo a loan. Another is the aging baby boom generation, many of whom are trading down and paying for their purchase with cash accumulated from decades of equity. Some also point to foreign buyers; home purchases by foreign buyers in the U.S. are increasing and those buyers don’t have the credit history in the U.S. to qualify for a loan.

Take a look at sales figures in our local real estate market for May 2014.

Chicago Real Estate Sales – Detached Single Homes

The number of Chicago detached single homes selling in May 2014 decreased 23% for the month compared to May 2013. The average selling price decreased by 12% to $681,934 and the average market time decreased by 41 days. Homes sold for 98% of the listed price.

Neighborhoods included in these statistics are: Avondale, Albany Park, Edgewater, Irving Park, Lakeview, Lincoln Park, Lincoln Square, Logan Square, Loop, Near North Side, Near South Side, Near West Side, North Park, North Center, Rogers Park, Uptown, West Ridge, West Town.
 

Date

Sold Listings

Average Sold Price

SP:LP

Average Market Time

May 2014

155

$704,827

98%

51

May 2013

202

$806,265

97%

92

 

Chicago Real Estate Sales – Attached Single Homes

The number of Chicago attached single homes selling in May 2014 decreased by 1% for the month when compared to May 2013. The average selling price increased 13% to $397,145 and the average market time decreased by 16 days. Homes sold for 99% of the listed price.
 

Date

Sold Listings

Average Sold Price

SP:LP

Average Market Time

May 2014

1,083

$365,679

99%

63

May 2013

1,102

$321,424

98%

79

 

Chicago Real Estate Sales – 2-4 Flats

The number of Chicago multi-family properties selling in May 2014 decreased 28% from May 2013. The average selling price increased 21% from May 2013 prices, and the average market time decreased by 51 days. Homes sold for 99% of the listed price.
 

Date

Sold Listings

Average Sold Price

SP:LP

Average Market Time

May 2014

64

$472,843

99%

64

May 2013

89

$388,864

98%

115

 
Curious about the value of your home? Get your home's value here!

Assessing Your Homeowners Insurance Coverage

by Karen Breen Elia

The news lately has been filled with reports of blizzards, tornadoes, hurricanes, floods, and fires, each of which has resulted in untold loss of lives, homes, and possessions.  As we watch with horror the impact these disasters have insuranceon those affected, it is only natural that we ask ourselves,” Would I be able to sustain such losses?  Would my insurance policy cover the costs of rebuilding my Chicago home?

The National Association of Insurance Commissioners (NAIC)) recommends that you use your annual renewal notice or any improvements to your home as a reminder to touch base with your agent or insurer to recheck how much insurance you really need.  Do you have sufficient coverage for rebuilding and replacement? Amy Bach, executive director of United Policyholders, a consumer advocacy group, urges homeowners not to blindly trust that their home insurer has all the bases covered.

With fluctuations in the Chicago real estate market, coverage equal to the current replacement cost (excluding land), is advisable.  The first step in getting adequate coverage is to establish your policy’s dwelling limit. Your target number is the full-replacement cost of your home and its possessions. The dwelling limit bears no relation to your property’s market value, its appraised value, or its assessed tax value. And don’t mistake the cost of new construction for the cost to rebuild, which is more expensive because of factors such as debris removal and higher demand for materials and labor after a catastrophe,

(You can get a pretty good idea of what it would cost to rebuild your home by using an online calculator, available at sites such as HMFacts.com ($7) and AccuCoverage.com ($8).

It’s a good idea to purchase guaranteed replacement coverage, meaning the insurer will pay whatever it costs to rebuild your home with materials of like kind and quality, without deducting for wear and tear. Avoid actual cash value coverage, which pays only the depreciated value of your home.

Check also on your need for flood insurance, even if you don’t live near a body of water, since policies vary in their coverage of many types of water damage.

And lastly, it goes without saying that you need to update the inventory of your possessions at least annually since it is not only a record of the contents of your house and their value, but also a good indicator of whether you have enough coverage.

MAKING A POSITIVE DIFFERENCE IN PEOPLE'S LIVES.

Karen Breen Elia & Louis M. Elia, REALTORS®, are brokers for homes, condos, and multi-unit properties on Chicago's North Side.

ChicagoCityHomes, RE/MAX Exclusive Properties
2951 North Lincoln Avenue 
Chicago IL 60657
Toll Free: (866) 404-3585 Fax: (773) 938-1467 
Send An Email

We know Chicago Real Estate!  Call us today!

The 5-Year Rule For Buying A Chicago Home

by Karen Breen Elia

There are many factors that go into the decision to buy a Chicago home. One of those factors is how long you expect to stay in the home. This applies whether you are a first time homebuyer or stepping up to a larger home. The length of time you stay in a home affects the financial outcome of that ownership.

Here’s a summary of some thoughts from moneyning.com and the 5-year rule for buying a home. There is a tendency for younger buyers to go through 3-year upgrade cycles. Why? Newer and younger buyers typically experience significant increases in income in their younger years.

homebuyersAs income increases their ability to afford a larger mortgage increases and the desire for a larger house sets in. There seems to be an assumption that buying is more cost effective than renting. Click here for a perspective on ownership costs vs. rent. That thought process occurs, on average, every three years.

The 5-year rule states that generally you should plan to stay in a home you’re buying for at least five years. That is for two primary reasons…

  • The first reason is closing costs. Every time a home changes hands both the buyers and the sellers put money on the table just to make the transaction happen. These costs can easily add up to thousands of dollars. Those dollars provide no real financial benefit to the buyers or sellers except to allow the transaction to happen.
     
  • The second reason is the payment of interest on the mortgage. A mortgage payment has two components – payback of the principal of the loan borrowed and interest on the amount borrowed. Because typical mortgage payments remain the same during the life of the loan the proportion paid on the two components changes. In the early years the payment is almost all going to pay interest and very little to principal. As the principal is gradually paid down the portion going to interest diminishes and the portion going to the principal increases.

According to author Thursday Bram “it isn’t until you’re about five years into paying down your mortgage that you’ve made enough progress on the principal to make it a better deal than paying rent each month.”

Here’s how to beat that average…don’t buy the biggest house you can just because a lender tells you what you can afford. Instead, consider buying smaller and then adding extra money to your monthly payments. That extra money will go entirely to paying down the principal loan – that means you will pay less interest over the life of the loan and you will create more equity in your home because you are diminishing the principal balance faster.

However, if you’re not going to stay in your Chicago home five years you should probably consider renting.

MAKING A POSITIVE DIFFERENCE IN PEOPLE'S LIVES.

Karen Breen Elia & Louis M. Elia, REALTORS®, are brokers for homes, condos, and multi-unit properties on Chicago's North Side.

ChicagoCityHomes, RE/MAX Exclusive Properties
2951 North Lincoln Avenue 
Chicago IL 60657
Toll Free: (866) 404-3585 Fax: (773) 938-1467 
Send An Email

We know Chicago Real Estate!  Call us today!

6 Lessons For Serious House Hunters

by Karen Breen Elia

While reading the RE/MAX Blog this week I came across an article that is great advice for all serious buyers to keep in mind during their home search...

home buyerI recently lived the adventure that is house hunting (under a tight deadline and in a competitive market with low inventory, but that's another story). Here are some lessons I learned during my home search that I'd like to share with fellow homebuyers:
  • Dress appropriately. The serious house hunter should have slip-on shoes that can be taken off easily and frequently. And layering clothes is a big help, especially when there's no telling whether homes you're touring will be heated or cooled.
     
  • Bring tools. Don't guess whether your king-sized bed or piano will fit, whip out the tape measure, or your tablet or smartphone and use apps like Photo Measures or MagicPlan. They let you take snapshots of interiors and include measurements and room specs. Many smartphones also have a flashlight feature – very helpful in dark basements.
     
  • A lot of art is a lot of holes in the wall. Yes, they may look impressive, but the owners' expensively framed oil paintings will leave behind a lot of big holes you will be patching when they move out. Which also means you'll likely have to repaint, too. It's not necessarily a deal-breaker, but it's good to think about in advance.
     
  • Remember your pet peeves. It's easy to fall in love with a house if you're desperate to find one, but remember to stick to your guns and your key must-haves. My pet peeve is a lack of natural light. Hollow, faux-wood doors annoy my husband. If we had bought a house that had them, I know he would have insisted on costly door replacements.
     
  • Start packing. If you're serious about moving, get serious about packing. Start collecting boxes now, because you never have enough boxes. Make a point of packing every day, consistently, little by little, room by room. Don't save anything for the last minute because at the last minute there's always more to do than you have time for. Trust me on this.​
     
  • House hunters deserve treats. A sure way to stay cheerful during house hunting is to reward yourself afterward with a fortifying happy hour. Or a visit to a bakery, ice cream shop or spa. You can always justify your treat by chalking it up to the process of getting to know the area. And it will make the prospect of next weekend's house-hunting excursion that much nicer. 
Take it from one who's just been through this: You can never, ever underestimate the expertise, community connections, patience and steady calm your real estate agent will bring to the table – especially in a market where every advantage counts.
 
Ready to buy a Chicago home? Check out what is for sale here!
 

MAKING A POSITIVE DIFFERENCE IN PEOPLE'S LIVES.

Karen Breen Elia & Louis M. Elia, REALTORS®, are brokers for homes, condos, and multi-unit properties on Chicago's North Side.

ChicagoCityHomes, RE/MAX Exclusive Properties
2951 North Lincoln Avenue 
Chicago IL 60657
Toll Free: (866) 404-3585 Fax: (773) 938-1467 
Send An Email

We know Chicago Real Estate!  Call us today!

How Chicago's Neighborhoods Got Their Names

by Karen Breen Elia

It is often said that "Chicago is a city of neighborhoods. " This may seem redundant, isn't every city a city of neighborhoods? - but Chicago really is a big amalgamation of unique enclaves. Where do all these names come from? Nick Greene with the website 'Mental floss" decided to find out. Here are his findings.

chicago neighborhoods

MAKING A POSITIVE DIFFERENCE IN PEOPLE'S LIVES.

Karen Breen Elia & Louis M. Elia, REALTORS®, are brokers for homes, condos, and multi-unit properties on Chicago's North Side.

ChicagoCityHomes, RE/MAX Exclusive Properties
2951 North Lincoln Avenue  
Chicago IL 60657
Toll Free: (866) 404-3585 Fax: (773) 938-1467 
Send An Email

We know Chicago!  Call us today!

Mortgage Rates Hit 6 Month Low

by Karen Breen Elia

I am often asked if now is a good time to buy and my answer is always a resounding "Yes!" for various reasons. One is the Chicago real estate market is rebounding causing prices to climb. It is in a buyers' best interests to take advantage of the lower prices.

Secondly, mortgage interest rates have been declining in the past few weeks....something that we usually don't see in the spring. Interest rates historically rise during the busy spring buying season. But not this year.

mortgage interest rates


Ready to take advantage of relatively low prices AND low interest rates? Contact us today and we'll show you how!
 

freddie mac survey

MAKING A POSITIVE DIFFERENCE IN PEOPLE'S LIVES.

Karen Breen Elia & Louis M. Elia, REALTORS®, are brokers for homes, condos, and multi-unit properties on Chicago's North Side.

ChicagoCityHomes, RE/MAX Exclusive Properties
2951 North Lincoln Avenue  
Chicago IL 60657
Toll Free: (866) 404-3585 Fax: (773) 938-1467 
Send An Email

We know Chicago!  Call us today!

Displaying blog entries 1-10 of 119

Contact Information

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Chicago IL 60657
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