Sun Times Round-up for 2007 Real Estate

Happy New Year!

Nice little column from the Sun Times to get you thinking about the year to come in Chicago real estate. Thanks to Peter Olson for catching the best stories that I miss.

Oh and the celebration tonight? Sitting on the couch this year with the wife... her pregnant with the flu :-(

Albany Park weighs in on Hussein hanging

Albany Park, here at Lawrence and Kedzie, doesn't make the news too often... usually a building collapses or a dictator is hanged... normal stuff. But the local news was all a flutter, staking out the Iraqi restaurant Mataam Al-Mataam for some immediate local reaction.

I'm glad to say that the patrons of this Middle Eastern haunt for the undergound foodie and native Iraqi were as classy as it gets. CBS aired a little celebration in Dearborne, Michigan, but Iraqi citizens of Chicago gave some perspective on the hanging for the news audience instead.

Amazing... just down the street you can hang with these guys and get a history lesson for one of the hottest spots in international debate and turmoil. Kudos to CBS for seeking out some intelligent commentary on a subject... I expected the local news channels to screw this one up by seeking out a nutcase for a sound bite.


Photo Karbon69

Clark Street development booming in Uptown

Great post today by Barry Pearce of Yo Chicago pointing out the development along North Clark Street in Uptown. The stretch of North Clark from Montrose to Lawrence is shaping up... with rather large new construction condo developments with more pedestrian friendly retail and atmosphere. Let's call it Wrigleyville North!

Several developments already exist and units are available for immediate closings. Others are just starting, while others still- empty lots waiting to rise up (with a few pre-sales maybe...).

I ride this stretch quite a bit and have watched the mini boom of new construction. The post discusses quality retail should boom here as well, joining the wholesalers famous for the area. I think the area could use a mainstream bar and restaurant to help draw attention to the existing spots. It will be interesting to see how the "vanilla box" storefront here draw retailers. The best scenario would be a mini Roscoe Village effect.

In that hood, rather good sized new construction projects sprang up just west of North Seely to North Western Ave., and retail moved in. Roscoe Village retained some existing buildings and existing retail and restaurants, and new retailers moved in with the increased density. I see this possibly happening on the Clark stretch in Uptown, however, you may have a situation of empty retail storefronts in new and existing buildings that we see on North Lincoln Avenue between Montrose and Irving Park Rd. The hot spot is north of this area and many businesses have not cut it in this "slow" zone.

For instance, you have the dense area of Wrigleyville bars, shops and restaurants. So, is there demand for a mini hot spot from Montrose to Lawrence? I think there is an opportunity to put in more bohemian shops/restaurants to match the more chill area west of Ashland.


Here's a good comment posted concerning the story. This reader tagged "Eagle" describes the area in the positive light that I think it deserves:

Eagle Said:
"In 2004 I trod the well-worn path from Detroit to Chicago, and I rented near Ashland and Diversey for about a year. When looking to buy in late 2005, I must have viewed 50 condos in Lakeview and Bucktown/Wicker Park. Because the area bounded by Clark, Ravenswood Ave, Montrose, and Irving Park is technically part of Lakeview Township (for property tax purposes), my online searches for “Lakeview Condo" also picked up the few condos along Hermitage and Paulina.

Even though the area was only two miles north of where I was renting, I had never visited it. Right or wrong, for many who first venture into Chicago, exploration often stops north of Irving Park.

In the end I bought in the East Ravenswood area (just east of the Montrose Brown Line stop), and I really love living there. The deep lots (~165 x 30) are truly awesome for Chicago and give the feeling of open space. Most of the homes are from the late 1800’s / early 1900’s, and almost all of them have been rehabbed. When open, the Montrose L stop is very convenient to the Loop (but bring a magazine or book – the trip is about 25 minutes). For the next year I’ll be walking down Hermitage to get to the Irving Park stop, but it is a pleasant walk. Other benefits of Ravenswood include real estate prices that are 15-20% less than places just south of Irving Park. Anyone who thinks that Ravenswood is “sketchy" either a) simply hasn’t walked the area in a long time or b) prefers to live in a homogenous bubble.

Well-constructed houses (older ones) now cost at least $700,000, but there are some pretty large condos that couples can still buy at a reasonable price. And if kids eventually enter the picture, Ravenswood’s parks and tranquility make the suburbs an option, not a necessity. The Chicago public schools will only continue to improve, and the Catholic schools are a bargain at approximately $4k per year per kid. If we consider that most families have two cars in the suburbs, their payments, insurance, and gasoline for two cars likely total $900 to $1000 per month. Catholic school for two kids at $670 total per month doesn’t sound so bad, especially if the family has one 2001 model vehicle in the garage that doesn’t have car payments.

I believe most would agree that the area is safe. Sure, graffiti pops up with relative frequency (last week someone tagged my sidewalk – my sidewalk!, but the city power-washed it within three days), and car break-ins are typical for a city neighborhood. But that’s going to happen in the city. In my mind, the two key safety factors to consider are robbery rates (“give me your wallet") and open drug dealing on the streets. On these measures, East Ravenswood is fine.

I’m glad to see Clark developing between Wilson and Lawrence. After the Brown Line stop opens at Montrose, I expect retail and condo development to take off on Montrose between Clark and Damen. It’s a nice enough strip right now, if a little dowdy. It would be great to have a few more bars within walking distance. There is big opportunity for retailers and developers eying Montrose. It has a convenient L stop and is smack in between Lincoln Square, Clark/Wilson, Wrigleyville, and the Southport Corridor. People who invest near Clark/Wilson and the Montrose Brown Line stop should see appreciation at rates as high or higher than most other areas on the North Side. Ravenswood will probably never be an “it" area, but it will only keep getting better.

Well put.

My favorite Christmas present...

As a season ticket holder for my dear Chicago Cubs, not a year goes by that I don't contemplate buying an authentic Cubs jersey. I'm somewhat practical when it comes to material purchases for myself (but less so when buying the drinks for friends!), so, this was the seasonal anguish I put myself through. I couldn't bring myself to walk in the Sports Corner on Addison and plunk down the BIG chunk-o-change on this luxury for myself.

I had already started the talk this year when the Cubs signed Alfonso Soriano to play outfield and hired Lou Pinella to manage the team. "If I get that jersey this year, who would it be?" Maybe Derek Lee or Michael Barrett? No, too new. I'm a bit old school, at least throwing back to my days growing up with the Cubs. Maybe Grace, maybe Ryno. That sounds more like it.

And then Christmas day it happened. My wife and mom-and- law teamed up and really surprised me.

Any nice little gifts that kinda got ya? I really didn't see this coming.

Oh yeah, and it's a Ryne Sandberg. Can't go wrong with Number 23 in Chicago. And it fits perfect.

The condo turnover meeting

I frequently post on condo association issues... I feel it will at least get my readers and clients going in the right direction. With a recent rush of new clients out in the field looking for that terrific box to put their new couch they haven't bought yet, the last thing most clients consider is the association. I think the questions start flying (the freak out) when they walk into a place and have that "oh yeah" feeling.

It goes like this; "My 42 inch flat screen will look so freakin' awesome on that wall. What happens when the developer turns the building over?"


A quick guide. I know, I know... I just posted on this subject. Get use to it. Anyway, here's how I answered that question this evening.

My clients are very serious and on the hunt. We've mostly looked at re-sale condos... in fact that's all we saw the first time out. So, earlier this evening I had a couple new conversion buildings lined up. They were incomplete, so neither had a closed unit as of yet.

My clients liked one on the buildings and unit layouts. As we left the top floor they may consider, we entered the model (a higher end, bigger unit) to check out the finishes. From the unfinished units to the model it looked like good work... How do I know? My brokerage, inspectors and fellow agents actually taught me how to know.

Becoming more impressed with the building, the husband turned and asked, "What happends when the developer turns over the building?" Yes, just like above! Anyway, the listing agent kind of paused, and the wife and husband looked at me... So, maybe a little embarassing right? I haven't had that conversation yet. Do I even know? Of course! But geez, second time out... and he just put it out there... I haven't even had a chance to buy them a glass of wine yet.

Calmly, I suggested we can discuss that as we head to the next showing... great question. But I continued:

1. The developer is required to have a turn over meeting when 75% of the building units are sold (there is also various stipulations for a three year time period after declaration of the condiminium or after the first unit is sold etc...)

2. After the first sold unit and conveyance, the developer must pay assessments for each unsold unit and collect assessments from each owner that closed on a unit. Accounting of the collection and expenditures of the assessment monies must be provided. This must be done until the turnover meeting.

3. At turnover, 3 to 5 people will run for the board of the condo Association (an announcement will be made before the turnover meeting and will request volunteers to run for the board). These positions are usually filled by volunteers. A larger building may actually require you to "run a campaign" for election. The 5 elected members than choose who will be President, Secretary, Treasurer and the two voting members.

4. You have created a non-for-profit association with a board of directors and are now responsible for running the building! I outline some of the first and important things to do when this occurs my last post on the subject. Briefly;

A. Decide if you need a management company or will be self managed.

B. Get a structual engineering report of the building to make sure the developer has met his/her obligations. This can be exspensive, but the best investment ever made.

C. Assemble a common area punch-list and present to the developer with a deadline for completion.

D. Make sure the developer is paying the assessment for the unsold units... again, a lot of this will be done by the management company. But, the ultimate responsibility is with the Board... what if the management company is loafing on their responsibilities? What if they are not proactive and advocate on your behalf?

E. Set the assessment at an adequate amount to fund the building.

Knowing what to ask, what to do, and how to follow up is key. But again, if you have a professional on your side for your condo purchase, you will save yourself some pain and hours of research. Make sure they know this stuff.

Like I said in my last post... just invite me to your turnover meeting! I'll make sure you ask the right questions. After that, it's up to you.

Chicago and Regional Economic News

Quite a few important and positives reports are summarized in the Chicago Tribune story below. I've reprinted an excerpt below

Fiscal readings exceed forecasts: Economy showing unexpected strength
By James P. Miller, Tribune staff reporterPublished December 28, 2006, 7:36 PM CST


A key measure of Chicago-area manufacturing activity showed an unexpected rebound in December, a trade group reported Thursday, in a surprisingly solid performance that may augur improved results for the nation's flagging industrial sector. In fact, the stronger-than-anticipated regional reading was just one of three economic reports that topped expectations Thursday. Consumer confidence showed a surprising surge, strengthening in December to its highest level since April. And existing-home sales for November were modestly better than expected, suggesting to some observers that the hard-hit housing sector might be approaching a bottom after weakening through most of the year.

Taken together, the reports hint that the nation's economy, while clearly downshifting in response to higher interest rates, is holding up better than some forecasters have been expecting. Thursday's reports "have contributed positively to the economic outlook as we close out 2006," said Action Economics economist Mike Englund, noting the latest data "put topspin on the outlooks for factories, housing, the consumer and the labor market. "Many economists had been expecting the Chicago purchasing managers index, which has weakened considerably in recent months, to be flat or even drop slightly from November's disappointing 49.9 reading.
Instead, the industrial barometer rose to 52.4. That move is significant. Under the "diffusion index" format used by the National Association of Purchasing Management-Chicago, a level above 50 indicates the sector is expanding, while a below-50 reading indicates that the manufacturing sector is contracting.


The index is based on a survey of purchasing managers in northern Illinois and northwest Indiana, one of the nation's major industrial centers. The survey looks at a number of factors such as manufacturers' spending, orders and hiring.

Chicago mortgage lending law continues to draw ire

Yo Chicago continues their coverage of a controvesial proposal to require credit counseling for those living in certain Illinois area codes. I don't agree with the legislation that singles out certain area codes. I think if madatory credit counseling is a mandate of the state, it should cover all state citizens. You'll see my reasoning... I weigh in on the comments section. This is important in many ways. But in one way, it may remind us all to check in with experts and plan before making huge decisions.

Chicago Market Predictions for 2007

Hope we are all enjoying a great holiday season. I'm back in the loop... at least writing again... barely legible, but writing.

Good story written by Mary "Zillow" Umberger titled "A market in need of a push: Home buyers and sellers must break stalemate for sector to move beyond post-boom doldrums", in the Chicago Tribune Business section today. If the link goes dead, Google the story. Balanced, but as usual, a little sarcastic bent to the negative.

However, the premise is pretty good and the theory posited has been discussed for the better part of the second half of 2006. Sellers are hanging on to "that last comparable condo/home sold for this much" attitude and buyers on the other hand are looking for the deal of the century. We have short memories... and if you bought almost anything in many of Chicago's neighborhoods in the last 10 years prices appreciated... a lot. So, we remember the "a lot" part. Reason being, Chicago is 100 times better to live in than 10-20 years ago.

But, we hit the "top" for some condos and single family homes and things are balancing. There are winners and losers and this will remain the case. The predictions are all over the board for 2007... some suggesting modest price increases overall and increased sales transactions. Others think it will take another year to see the shake out and correction.

My take is, well, on a case to case basis. Depending on the home, neighborhood, list price, equity of the seller... my buyer clients and I will try to get the best deal. My seller clients will have to look seriously at what I present to them, as far as market competition, and decide if they want to start below the comps or price with them and hang on and see.

For example, I have a listing now that is approaching 90 days. There are not comparables priced lower in the immediate neighborhood, or, in neighborhoods that are comparable in quality. We went on in the late fall, so... the slowest time in the market. Our price and location has attracted a heavy amount of showings... a couple second showings. We are going to hold tight because, even if it takes 6 months, we are confident the buyers will see there are not a bevy of cheaper alternatives for the location.

It's a great neighborhood and condo, and if we went to a "certain" price, the place would fly out the door... and the people who have seen it, have not exactly ran out to buy other places. They'll be back or someone else will snatch it up because leases come up in the spring! So it's worth holding there. The buyers are finally gonna get it... there just isn't a lot of supply in certain great areas to live. If you want to be there, it's costs a certain amount.

Another example is a 6 unit building in the same general neighborhood. The new conversion building priced under the current market for its comparable product and sold out in 30 days! So, the buyers I took there and passed because they didn't believe the numbers I presented them are regretting it. Other units for sale, and there is not a lot, have stayed at the "comp line" and my buyers wait.

But this will play over and over in each neighborhood, on each street, for each unit. Rogers Park for example has a ton of two bedroom, one bathroom condos on the market... most with no parking, limited outdoor space etc... Those who bought similar units two years ago will be lucky to break even due to the competition. This is not the case in Lakeview where very tiny shifts in the last comparable price can sell a unit quickly.

From my personal take on the market, and I've written on this blog, Yo Chicago and other sites, that indeed I see a pick up in serious buyers. And I'm doing all I can do to keep up with their demand and put the best product in front of them, negotiate the best deal, and fit them into a place and neighborhood they will enjoy. Just ask them.

By the way... this story, New home sales rise more than forcast by Bob Willis of Bloomberg News, also ran in the Tribune online with the November numbers. Better than assumed in Umberger's story.

The moral... buy and sell for the right reasons. To move up to the next place for your needs, to plant roots, to improve your own home, to live with other owners that derive social benefits of being in this terrific "club"... and buy a place you can afford so you may build equity, or, make the sacrifices involved in buying a little above your means. But don't buy because you want to make 50K on a two bedroom, one bath condo in a couple years (although, this still happends if you rehab a place to that extent!). If you're investing, that's another can of worms we can open.

"Closed" for the Holidays

Wishing you good closings and a Merry Christmas!

And to all... a Cubs World Series!

Quality in Bowmanville Chicago

In our continuing effort to bring you first hand accounts of Chicago's neighborhoods, I will introduce you to the Bowmanville neighborhood located in the Lincoln Square area.

A long-time, but little known by name "sub-neighborhood" of Lincoln Square, Bowmanville has emerged on as a destination for high qualtitly living spaces and surprising proximity to amenities.

Travel north down Damen Avenue just past West Foster to the heart of a Bowmanville. The historic boundaries include the Rosehill burial grounds to the the North, West Foster Avenue to the South, West Ravenswood to the East and North Western Avenue to the West. This central location provides a short walk to Andersonville, Ravenswood and Lincoln Square shops and restaurants without the premium prices asked in these neighborhoods. The Ravenswood Metra Station located nearby zooms you downtown or the burbs ... in minutes! The Damen Avenue "L" stop is close by for your everyday commuter needs around the entire north side and Chicago's Loop.

For the present Chicago dweller, the neighborhood as it is "now" matters. But ChicagoBungalow.org has this to add on the history of Bowmanville:

"Bowmanville was established in 1850 by Jesse Bowman. Although his claim to the land was later found to be illegal, it did not prevent the area from becoming a bustling settlement. The area became a stopping point for farmers delivering there goods to markets in Chicago. Numerous saloons and taverns sprang up, among them an establishment owned by Hiram Roe, locate on Roe's Hill. The name of the area was later misspelled Row's Hill and Rose Hill, which became the name of the train depot in the community. The name eventually became Rosehill, as it stands now in the name of the burial ground- Rosehill Cemetary."

Of course today, high quality new construction homes offer size and luxury surrounded by tree lined streets- while built to suit the historic feel of the neighborhood. Three, six and eight flat buildings provide hip, totally rehabbed condos in two and three bedroom layouts. The coverted buildings retain famous Chicago architectural details. No high-rise buildings here!

For the professional looking for nightlife at hot restaurants and bars such as Rioja, Spaca Napoli, The Hop Leaf and the classic Fireside Grill, to the the established or growing family looking to be among city life with a bit of a mature spin, Bowmanville warrants a look. I'll see you at Pauline's for brunch, or maybe on the outdoor patio at Joie de Vine...