Chicago Home For Sale

August 31, 2010 - Sales of Chicago condos may not be booming right now, but the rental portion of Chicago real estate is. Because of the recent downturn in home values as well as tighter lending requirements, many potential Chicago condo buyers have decided to rent instead and wait out the market and economy. Appraisal Research Counselors vice president Ron DeVries was quoted in an article in Crain’s as saying that, “People are retrenching, and I think renting is consistent with that mindset. Everyone wants to reduce their risk, I guess.”

According to the latest Appraisal Research Counselor report, the occupancy rate at Class A rental towers downtown was up to 94.5% in the second quarter of this year and is the highest occupancy rate in almost three years. Net effective rents are also up to $2.22 per square foot, which is a 2.8% increase over last quarter. Ron DeVries predicts that downtown apatment occupancy will increase to around 95.5% by the end of this year, according to the article. He also believes that rents will go up to 9.5% more than they were last year.

There have been 3,620 Chicago apartments completed since the start of 2009. But no new apartment towers are set to be built and completed for at least three years, so a shortage of rental units could actually take place, causing rents to go up even more in the next couple of years.

Chicago apartments face a lot of competition from Chicago condos that are temporarily up for rent. ARC reports that there were 1,808 downtown Chicago condos rented through the MLS in the second quarter of this year. That is a 72% increase from the first quarter of this year and 32% increase from the same period a year ago.

Renters certainly have a wide selection of units and options right now, as well as concessions like free rent. But if you are in a position to buy, there are also lots of Chicago homes for sale, many at reduced prices.

Technorati Tags: Chicago Apartments, Chicago Homes For Sale, Chicago Real Estate

August 30, 2010 - According to the latest numbers released by Bankrate, closing costs in Illinois have increased quite a bit over the past year. The Tribune states that there has been a 41% increase in closing costs since last year, according to the Bankrate study. Closing cost nationally have gone up 36.2% over the past year.That means that closing costs on Chicago condos that are priced at $200,000 would be about $3,505. Last year closing costs on a $200,000 mortgage were about $2,486. Closing costs on Chicago real estate generally cover things such as credit checks on buyers, title insurance and appraisals to name a few services.

The reason for the jump is that the federal government has required that lenders stick by their good faith estimate. A good faith estimate is a statement from a lender given to a borrower at the start of the loan application so that the borrower has an idea of what the closing costs will be. It wasn’t uncommon for banks to understimate closing costs in a
good faith estimate and then write them in higher once the loan was approved. But now they must honor those estimates, so they must quote them higher in the beginning.

But according to the article, Illinois isn’t anywhere near the top when it comes to high closing costs. The state actually ranks 31 among the 50. So if you’re in the process of buying Chicago condos, just be sure to shop around for both the best deal on a home and the best deal on Chicago mortgages.

Technorati Tags: Chicago Mortgages, Chicago Condos, Chicago Real Estate