Rental Prices Will Increase Soon. Start Looking Now!

If you were able to dodge a rent increase in 2010 don't assume you'll be so lucky this year.

Demand is outstripping supply, meaning landlords both downtown and in the suburbs have many existing and prospective tenants just where they want them. And property managers know it.

Last year, landlords were able to push through rent hikes of about 7 percent. This year, rents are expected to rise by an additional 7 percent to 8 percent, particularly in newer buildings downtown, according to a forecast by Appraisal Research Counselors.

For the prospective tenant looking for a bargain, which means the time to shop for a lease that includes a free month of rent or a flat-screen television, is now. By spring, those rent concessions are likely to evaporate, and leasing managers expect to hear back from prospective tenants who thought they'd find a better deal across the street but didn't.

"The concessions are still out there, but as soon as you hit that April market you're going to start seeing a lot of push on rents," said Ron DeVries, vice president at Appraisal Research Counselors.

"Last year everybody dropped the rates to get someone in the door," said general manager Phyllis Kempton. “Now, everyone is raising their rent. People are accepting of 8 percent."Meanwhile, at Flair Tower, renters will see renewal rates increase 4 percent to 6 percent, and new renters will see fewer concessions, said general manager Amanda Kopko.


Landlords "never hit the renewals as hard as the new tenants," DeVries said. "But if the building is 98, 99 percent occupied, they're going to take a more aggressive stance because they can sign another tenant at the full rate."

A combination of factors is responsible for the current leasing environment. Consumers with the financial resources to buy properties remain leery and continue to wait for the housing market to bottom; other people are forced into apartments because they've lost their homes to foreclosure.

Meanwhile, the supply of individually owned condos rented by their owners, called the "shadow" market, reached a record 5,718 units last year. But with condo construction at a virtual standstill, little new inventory is expected. Also, some potential tenants are fearful of renting condos, fearing that the owners may fall into foreclosure.
 

Woodstock Institute, a Chicago research and advocacy group, reported Thursday that condominiums accounted for 42.5 percent of all foreclosure activity in the six-county Chicago area in 2010. Also, delivery of new apartment projects downtown has plummeted in the near term. More than 2,500 new downtown apartments came online in 2010. This year, the only new building is Randolph Tower, with 312 units, followed by potential additions of 650 units in 2012 and 2,000 units in 2013, the year in which rent increases may moderate.

Also, the national unemployment rate for people over age 25 with a college degree was 4.5 percent in January, according to the Labor Department, compared with 9 percent for the population as a whole, so they have the financial footing to seek out, and afford, apartments.

From the fourth quarter of 2009 to the same period last year, 2,000 more apartments were rented in downtown Chicago. "That's a huge number," DeVries said. "Absorption downtown is phenomenal."

The rental trends aren't expected to extend to all corners of the city and suburban markets or to every building. Rent increases in older buildings, those generally built before the 1980s, are trailing behind those of newer buildings.

And not everyone has enough confidence in Chicago's job market to test a rent increase. Arnell Cordero, leasing director of Group Fox Property Management, which manages 2,500 units in Chicago, Evanston and Hoffman Estates, has seen fewer job transferees from other states and more of his younger renters move back home.

"We're a little more open to negotiation," Cordero said. "We can ask (for a rent increase), but it doesn't mean it's engraved in stone."

The 2,356-unit Presidential Towers, which just copleted a $2 million renovation of its lobby and common areas, anticipates rents this spring will be as much as 8 percent higher than in May 2010. 

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Logan Square’s Time Comes Round in Chicago

Via The New York Times, comes an an article on Logan Square:

For decades Logan Square, on the northwest side of Chicago, has been on the brink of gentrification by urbanites drawn to its broad boulevards lined with grand, turn-of-the-20th-century mansions and two-flats built by well-to-do immigrants. By midcentury, the neighborhood had declined owing to suburban flight, and many houses were chopped up into apartments. But the neighborhood has been revived in recent years as restaurants, coffee shops and bars have opened, encouraged by city loans and grants for small-business development. An affordable alternative to the neighboring and now pricey districts of Bucktown and Wicker Park, Logan Square is a magnet for creative types running everything from hip hair salons (Wilco’s Jeff Tweedy gets his locks trimmed at Sparrow salon) to an international film series.

Hot spots featured in the article include:
Longman & Eagle, Owen & Engine, Revolution Brewing and Wolfbait & B-girls.

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Top Neighborhoods to Rent Chicago Apartments

With over 2.8 million people in the city who live here year-round, it can be difficult to even think about finding the right place for you in the city of Chicago. After all, if there are so many people who live here, how are you going to be able to find the perfect Chicago apartments to look at and rent? And, if you're on a budget, it can be even more difficult to think about looking at Chicago apartments for rent. But our agents can easily find the perfect apartment for your needs that will also be in your budget. There are many neighborhoods throughout Chicago that appeal to all types of people. Let's take a look at a few of the top neighborhoods to rent apartments in Chicago.

Logan Square
Located on the Northwest side of Chicago, Logan Square is known for the Illinois Centennial Monument located at the center of the traffic circle formed by Kedzie and Logan Boulevards and Milwaukee Avenue. The monument was erected to celebrate the 100th year of Illinois statehood. There is a wide variety of cuisine available with over 100 restaurants, cafes, and bakeries in this very family friendly neighborhood. Logan Square's land area is 3.2 square miles with a population of 83,000 people of many ethnicities. Apartments in Logan square range from $750 for a one bedroom, $900 for a two bedroom, and $1100 for a three bedroom.

Avondale
Also located in Northwest Chicago, Avondale is home to a total of 43,000 people with a land area of 2 square miles. In the late 19th century and early 20th century, large numbers of Polish immigrants settled in Avondale. Though most of the Polish have moved out to other neighborhoods, Avondale is still rich in Polish history with Polish character still evident in the local arts and culture. Apartments in Avondale range from $650 for a one bedroom, $775 for a two bedroom, and $950 for a three bedroom.

Lincoln Park
Lincoln Park is one of the most expensive areas to live in Chicago with the average home selling for 1 million dollars. The community was named for its parkland which contains Lincoln Park Zoo, Chicago History Museum, Lincoln Park Conservatory, ponds, playing fields and many entertainment venues. The neighborhood has many upscale stores, restaurants, and shopping centers. Apartments in Lincoln Park can start around $1000 and go all the way up to as much as $10,000 per month.

Wicker Park
Many young white-collar workers call this neighborhood home due to its easy access to downtown Chicago. It is close to public transportation and the Loop. Wicker Park has many entertainment venues, bars, restaurants, and stores. The neighborhood has grown substantially and as a result real estate prices have continued to rise. Apartment prices in Wicker Park can be comparable to Lincoln Park with one bedrooms starting at $900, two bedrooms at $1200, and three bedrooms at $1400. Depending on location, amenities and size, apartments can go all the way up to $3000.

One of the great things about Chicago apartments, is that there is a wide array of different sizes and styles of apartments, which means that no matter what your budget is, you should be able to find something that suits your needs. Learn more about the different neighborhoods before you start your search for Chicago apartments and you'll be able to find areas in the city where Chicago apartment rentals are much less expensive than they are in other areas.

{Image via Ork Posters}

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Two States Sue Bank of America Over Mortgages

The attorneys general of Arizona and Nevada on Friday filed a lawsuit against Bank of America, accusing it of engaging in “widespread fraud” by misleading customers with “false promises” about their eligibility for modifications on their home mortgages.

In withering complaints filed in state courts in both states, the attorneys general accused Bank of America of assuring customers that they would not be foreclosed upon while they were seeking loan modifications, only to proceed with foreclosures anyway; of falsely telling customers that they must be in default to obtain a modification; of promising that the modifications would be made permanent if they completed a trial period, only to renege on the deal; and of conjuring up bogus reasons for denying modifications.

“Bank of America’s callous disregard for providing timely, correct information to people in their time of need is truly egregious,” Catherine Cortez Masto, the attorney general of Nevada said in a statement.

The lawsuit comes as top prosecutors nationwide are investigating whether the paperwork that banks used to support foreclosure cases often was egregiously sloppy, sometimes relying on robo-signers — employees who signed hundreds of documents a day — to sign sworn court documents.

Tom Miller, Iowa’s attorney general who is heading the multistate investigation into foreclosure fraud allegations, said the two states’ lawsuits would not dilute his inquiry. A Bank of America spokesman, Dan Frahm, said bank officials were disappointed that the lawsuits were filed “at this time,” given the bank’s cooperation with the multistate investigation.

Arizona and Nevada are among the states hardest hit by the housing downturn, and the state attorneys general said their lawsuits were prompted by hundreds of complaints by consumers who sought modifications of their mortgages.

The complaints in the lawsuit in many ways echoed problems encountered by homeowners nationwide who have tried with little luck to obtain mortgage modifications from banks, often through a federal program set up for that purpose. Thousands of homeowners complain that banks repeatedly lose their documents, fail to return calls or foreclose when a homeowner believes he or she is still negotiating a modification.

The lawsuit noted that Bank of America ranked last in “virtually every homeowner experience metric” monitored in a monthly report on the federal home loan modification program.

Former employees said that Bank of America’s modification staff was “chaotic, understaffed and not oriented to customers,” according to a news release. The Arizona complaint cites the case of an Apache Junction couple who faced foreclosure. Terry Goddard, attorney general of Arizona, said the lawsuit was filed in part because the bank had violated the terms of a 2009 consent decree that Countrywide Home Loans — which Bank of America purchased in 2008 — had engaged in “widespread consumer fraud” in originating and marketing mortgages. As part of the judgment, Countrywide had agreed to create a loan modification program for some Arizona homeowners.

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Most Americans Concerned About Housing Payments

More than half of Americans are worried about not having enough money to pay their mortgage or rent, according to a survey from the Washington Post released today.

A third of respondents were "very concerned" about their ability to make housing payments, while a fifth were "somewhat concerned," adding up to 53 percent of respondents. This contrasts to the results of similar surveys the newspaper conducted in February 2009 and December 2008.

In the 2008 survey, 37 percent of respondents said they were at least "somewhat concerned" about making their housing payments. By February 2009, that figure had risen to 46 percent.

In the latest survey, 15 percent of respondents said they were "not so concerned," while 28 percent said they were "not at all concerned." Three-quarters of African Americans were concerned; 55 percent were "very concerned," the paper said. The rest had no opinion.

"Americans' views about a moratorium are intertwined with their concerns about their personal finances and the economy. Opinions about whether homeowners or mortgage lenders are more to blame for homeowners' challenge in making payments and avoiding foreclosure haven't changed much since a September 2007 poll conducted by the Wall Street Journal and NBC.

The Washington Post survey found that 45 percent of respondents blamed lenders more, 26 percent blamed homeowners more, and 20 percent said they were equally at fault. The 2007 WSJ-NBC poll found 48 percent blamed lenders more, 27 blamed homeowners more, and 22 percent said they were equally responsible.

Despite concerns about the economy, the majority of respondents, 61 percent, said that now was a good time to buy a home. Twenty-nine percent said it was a bad time to buy, and 10 percent had no opinion.

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Most Americans Concerned About Housing Payments

More than half of Americans are worried about not having enough money to pay their mortgage or rent, according to a survey from the Washington Post released today.

A third of respondents were "very concerned" about their ability to make housing payments, while a fifth were "somewhat concerned," adding up to 53 percent of respondents. This contrasts to the results of similar surveys the newspaper conducted in February 2009 and December 2008.

In the 2008 survey, 37 percent of respondents said they were at least "somewhat concerned" about making their housing payments. By February 2009, that figure had risen to 46 percent.

In the latest survey, 15 percent of respondents said they were "not so concerned," while 28 percent said they were "not at all concerned." Three-quarters of African Americans were concerned; 55 percent were "very concerned," the paper said. The rest had no opinion.

"Americans' views about a moratorium are intertwined with their concerns about their personal finances and the economy. Opinions about whether homeowners or mortgage lenders are more to blame for homeowners' challenge in making payments and avoiding foreclosure haven't changed much since a September 2007 poll conducted by the Wall Street Journal and NBC.

The Washington Post survey found that 45 percent of respondents blamed lenders more, 26 percent blamed homeowners more, and 20 percent said they were equally at fault. The 2007 WSJ-NBC poll found 48 percent blamed lenders more, 27 blamed homeowners more, and 22 percent said they were equally responsible.

Despite concerns about the economy, the majority of respondents, 61 percent, said that now was a good time to buy a home. Twenty-nine percent said it was a bad time to buy, and 10 percent had no opinion.

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Chicago Home Prices Rise for Fourth Straight Month

Nationwide, home prices rose slightly in August compared to the same month last year, according to the monthly Standard & Poor's/Case-Shiller Home Price Index.

A 10-city composite index rose 2.6 percent year-over-year in August and a 20-city composite index rose 1.7 percent year-over-year. Compared to July, both indexes dipped slightly for the first time in several months: 0.1 percent and 0.2 percent, respectively.

Fifteen out of 20 tracked metro areas saw index declines compared to July. Despite the overall index increase, 12 metro areas also saw declines compared to August 2009. Seventeen metro areas saw slowing annual growth rates.

Average home prices nationwide are back to late 2003 and early 2004 levels.

Chicago, Detroit, New York and Washington, D.C., have posted at least four straight months of month-to-month increases, though none of the 20 metro areas posted more than a 1 percent increase from July, the report said.

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Homebuilder confidence up but still low

An index measuring homebuilder conference rose for the first time in five months during October, but showed the vast majority of builders view the current level of sales as poor.

Although more builders are expecting sales to pick up in the next six months, they remain in the minority, and traffic from prospective buyers remains low.

The National Association of Home Builders/Wells Fargo Housing Market Index asks builders builders to rate current single-family home sales, sales expectations for the next six months, and traffic from prospective buyers.

The index gauging current sales conditions rose three points in October, to 16. The index gauging sales expectations in the next six months rose five points, to 23. The index gauging traffic of prospective buyers rose two points, to 11.

The new-homes market is finally moving past the lull that occurred when the homebuyer tax credits expired and economic growth stalled this summer," said NAHB Chief Economist David Crowe in a press release.
Challenges to homebuilders include competition from foreclosures, inaccurate appraisal values, and "general consumer uncertainty about the economy and job market," Crowe said.

The toughest obstacles are credit-related, Crowe said: the scarcity of construction credit for builders and tighter mortgage requirements for consumers.

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Mortgage Rates Ease Again

Mortgage rates are at new lows for a third consecutive week as investor demand for mortgage-backed securities that fund most home loans continues to be more than adequate to satisfy demand for mortgages.

Rates for 30-year fixed-rate mortgages averaged 4.19 percent with an average 0.8 point for the week ending Oct. 14, down from 4.27 percent last week and 4.92 percent a year ago, Freddie Mac said in releasing the results of its weekly Primary Mortgage Market Survey.

That's a new low in Freddie Mac's records, which date back to 1971. Rates haven't been lower since April 1951, according to another set of data based on FHA rates that goes back to 1948.

Rates for 15-year fixed-rate mortgages averaged 3.62 percent with an average 0.7 point, down from 3.72 percent last week and 4.37 percent a year ago. That's a new low in Freddie Mac records dating to 1991.
Rates for 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) loans averaged 3.47 percent with an average 0.6 point, unchanged from a week ago but down from 4.38 percent a year ago. Rates on 5-year ARM loans have never been lower since Freddie Mac began tracking them in 2005.

"September's employment report held no big surprises to financial markets, allowing long-term bond yields and fixed mortgage rates to continue to ease," said Freddie Mac Chief Economist Frank Nothaft. "As a result, both the 30-year and 15-year fixed mortgage rates hit all-time record lows for the third consecutive week."

Although the latest slide in mortgage rates has sparked another refinancing boom, demand for purchase loans remains down 37.1 percent from a year ago, according to a separate survey by the Mortgage Bankers Association.

Via Inman News

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Home-sale discounts jump 24%, Chicago 5th Highest Share of Discounted Listings

Sellers cut asking prices on 2.1 percent more homes last month compared to August -- a total of 323,316 homes.

Meanwhile, total inventory rose 0.6 percent from August and 13.6 percent from September 2009 to a total of 675,872 homes. The share of discounted homes is therefore 47.8 percent, up from 43.8 percent in September 2009 when 260,358 homes had experienced a price cut.

On average, sellers had reduced their list prices twice last month. Median list price last month was $245,265, down 1.8 percent from August and 15.3 percent lower than in September 2009.

Markets with the highest share of discounted listings (of 26 markets surveyed):

1. Jacksonville, Fla. (55.8 percent)
2. Phoenix, Ariz. (55.4 percent)
3. Minneapolis-St. Paul, Minn. (53.2 percent)
4. Orlando, Fla. (52.8 percent)
5. Chicago, Ill. (52.1 percent)
6. Tucson, Ariz. (51.7 percent)
7. Baltimore, Md. (51.3 percent)

Markets with the lowest share of discounted listings (of 26 markets surveyed):

1. Denver, Colo. (34.4 percent)
2. Los Angeles (39.1 percent)
3. Richmond, Va. (42.9 percent)
4. Miami-Ft. Lauderdale-Palm Beach, Fla. (43.3 percent)
5. San Francisco (45.2 percent)
6. Charlotte, N.C. (46 percent)

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