The residential real estate market in the Chicago-area and across the nation is gradually rising from the ashes of the Great Recession, experts say.
The highly respected S&P/Cash-Shiller Home-Price Indices released in early November shows home prices have increased for eight consecutive months for the first time since the spring of 2006.
While prices are still slightly negative over the nearly four-year period, the annual returns are close to being in positive territory for the first time in three years.
“Now that there’s a gradual upward trend in both home sales and home prices, it’s a positive sign that we’ve moved past the bottom of the hear estate market, and are now moving towards a fully recover,” noted Dr. Mark J. Perry, professor of economics and finance in the School of Management at the University of Michigan.
A new RE/MAX Northern Illinois network analysis of transactions gathered by Midwest Real Estate Data shows home sales activity in the metropolitan Chicago real estate market registered a solid gain of 11 percent for the first nine months of 2010, compared to the same period in 2009.
The average sales price for homes in the metro area during the January-September period was $255,684, a decline of only 1 percent from $258,354 a year earlier, said Jim Merrion, regional director of RE/MAX Northern Illinois.
Developers of new condominiums in downtown Chicago say the market has hit bottom and demand is slowly returning sparked by affordable pricing and rock-bottom mortgage rates.
“We have had a good sales year in 2010 and are highly optimistic about the new-construction condo market in 2011,” said Scott Hoskins, president and managing broker for CMK Realty, the exclusive marketing agent for 235 Van Buren, a new 47-story condo tower in the Loop’s Financial District.
“With both mortgage rates and condo prices at the bottom, we are anticipating good condo sales in downtown Chicago during the first quarter of 2011,” said Keith Giles, president of Weichert, Realtors—Frankel & Giles, the exclusive broker for several South Loop projects.
Meanwhile, apartment owners also are enjoying a rebound in the rental market with occupancy levels improving and concessions being phased out.
Judith Roettig, executive director of the Chicagoland Apartment Association, said forecasts indicate many Chicago-area landlords are planning catch-up rent increases of up to 8 percent in 2011, after seeing rent declines since 2007.
“If apartment rents rise a hefty 8 percent that will make condominium ownership more desirable,” predicted Giles. “Chicago historically is a condo town. People like to own their real estate here.”
Once resale values start to rise again, pride of ownership will return as owners start to enjoy the investment benefits of income-tax deductions for mortgage interest and real estate taxes, experts say.
“While the new-construction condo development market may not come roaring back at full capacity for a few more years, we expect to see condo conversions begin again in 2011,” Giles said.
“As the market revives, the first rental buildings to be converted will be the broken condos—the properties that were built to be sold as condos but failed during the recession,” Giles predicted.
Don DeBat’s weekly real estate column is syndicated by DeBat Media Services. For more home-buying information visit his website at: www.dondebat.net.
DON DeBAT
chicago journal
www.chicagojournal.com
The Home Front
11/10/2010 9:55 PM
By STARCHY from Eagle Rock
Posted: 11/11/2010 12:06 PM
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