The Spire

Garrett Kelleher, the Irish developer who was the visionary for Chicago?s proposed newest landmark, the 150-story Spire, is now being sued by Bank of America for $110,000 in unpaid credit card bills related to the stalled construction project. Allegations have been added to a lawsuit filed in August by Bank of America to recover an additional $4,900,000 lent to Shelbourne Development, Kelleher?s development company. Kelleher personally guaranteed two credit cards issued by Bank of America in 2006 and 2007.

The Spire Developer Defaults on Loans

Additionally, in December 2006 Bank of America provided Shelbourne with $3,000,000 in the form of a revolving line of credit for the project, designed by the world renowned Spanish architect Santiago Calatrava. In June 2007, the bank extended a $7,000,000 term loan to Shelbourne for the Spire, the terms of which were later amended to give the developer until November 2008 to line up a syndicate of investors to provide construction financing for the project. Shelbourne missing the deadline and defaulted on the above loans as the real estate market cooled and capital markets froze.

Landmark Single Family is on the Market

In April 2006 Kelleher bought a 1912 Arthur Heun designed Georgian with Palladian windows at 1416 N Astor Street for $8.5MM. The personal residence has 5 bedrooms, 6 ½ baths and sits on a 75 x 110 lot with English garden and 4 car garage. The property is now on the market for $20 million, and rumor has it that Kelleher is moving back to Ireland.

Will rates float up and away?

To date, the Federal Government has pumped over $1.25 TRILLION into the mortgage market in an attempt to boost slumping activity and aid the overall economy. However, the end may be in sight ? the Federal Reserve is considering ending aid as of March 31.

The Real Estate Market Drives the Economy

The housing market has been a form of life support to the economy?without this activity the economic crash would have much more severe. If the government withdraws their support we will very likely see significant upward movement in mortgage rates, causing another decline in the housing market.

Most mortgages are not held long term by banks. Instead, they are packaged and made attractive for sale to Wall Street. This creates liquidity in the banks, and frees up money to be lent again in the mortgage market. After the credit crunch erupted in 2008, many investors lost their appetite for mortgage backed securities, and the Federal Reserve stepped in to fund purchases on the secondary market and keep money flowing back to banks and ultimately to home buyers.

The Federal Government Plans to Pull from Mortgage Baked Securities

In January 2009, just after the 2008 credit crunch, the Fed started buying securities back by Fannie Mae, Freddie Mac, and Ginnie Mae, with the original plan of continuing this activity through January 2010. They have since extended the program an additional three months to continue support of the housing market. The ultimate outcome of this program will not be known until the government sells off these securities to other investors. The degree of profit or loss remains to be seen.

Experts agree that if the Federal Government stops the assistance program, mortgage rates will rise. Right now, they are absorbing about $12 billion a week in excess supply. When they stop, the market will have to pick up the slack.

First Time Home Buyer Tax Credit Set to Expire

My personal concern is that with the home buyer?s tax credits of $8,000 first time buyers and $6,500 for repeat buyers expiring on April 30th, what will motivate the buyers? Those people who were on the fence may have bought a little earlier than they had planned due to the incentives, but what happens May 1st? No more tax credit, combined with rising interest rates, certainly limits the incentives and motivation of potential buyers. The cost of buying a home will rise significantly and we may expect early summer sales to slow.

If sales do slow what will the Federal Government do? Will Congress simply activate a third tax credit (or as I like to call it, tax crutch) for another 6 months? as it did it once before? And what after that?

We would like to thank James Canby for sharing today’s photo via Creative Commons License

Photo taken from Cortland Avenue looking into Finkl & Sons

The word is that Depaul University has been considering the Finkl & Sons Steel Mills at Clybourn Avenue and Cortland Street as a place to build a new 10,000 seat basketball stadium so that it could be in the proximity of their Lincoln Park Campus. They are also considering an alternative site just south at Divison and Clybourn.

Site not suitable for Residential

There has been much discussion about a new Depaul basketball stadium in the media as of late, but it?s only recent that they have been naming site locations. The Finkl & Sons site is located on the east bank of The Chicago River at Southport Ave, and Cortland Street within steps of DePaul?s main campus and due to its heavy industrial use over the past 100 years the site is believed to be to contaminated for many real estate re adaptations. So it seems the current thinking is that instead of removing all the over-sized foundations so closely positioned by the rivers edge that it might be far simpler and safer to just remove all the top soil, pave over the site and any possible contamination.

Its has always been a touchy subject for DePaul athletes that their venue is 15 miles off campus in Northwest Suburban Rosemont over a more local stadium

Finkl to move to the South Side

Finkl Steel in the meantime will continue their move from their longtime site to the south east side of the city. In November they bought 13 acres of land in the Stony Island neighborhood from the City of Chicago for $1.00 (Glad I wasn?t their broker) Work had begun quickly after for their arrival. The $250 million a year Finkl and Sons is the world’s leading supplier of forging die steels, plastic mold steels, die casting tool steels and custom open-die forgings, processing over 100,000 tons of steel each year, and then distributed domestically and to more than 18 countries worldwide all while sitting quietly on the banks of the Chicago river between the beautiful neighborhoods of Depaul, Lincoln Park and Bucktown.

We’d like to thank Payton Chung for kindly sharing today’s photo via the Creative Commons’ License.

On Friday, President Obama signed into law an extension and expansion of the home buyer tax credit.

A tax credit of $8,000 currently exists for first-time homebuyers who will close on a home by November 30, 2009. This credit was set to expire on December 1, but because of a continued weak economy and the efforts of  Realtors, it will now remain in effect through the end of June 2010.  To qualify, buyers must sign a contract before April 30, 2010 and close on the property by June 30, 2010. This opens up several new possibilities for buyers and sellers for the upcoming winter and spring seasons.  It continues to be a buyer’s market even though the housing market has improved significantly since October 2008.

Additionally and perhaps of even greater consequence, the signed law offers a new $6,500 tax credit for current homeowners looking to buy up. This new credit is intended to reach those who have patiently waited for the right time to buy. Those who have used their home as their primary residence for five consecutive years our of the last eight can claim the credit.  They must also close by the end of June, 2010.  Coupled with the extension of the first-time home buyers’ credit, this additional provision should boost the real estate market in ways beneficial to buyers, sellers, and the real estate industry.

Congress substantially increased the income limits on the tax breaks as well. Individuals earning less than $125,000 will now be eligible (currently $75,000), and married couples with income less than $225,000 who file jointly are eligible (up from $150,000). One item to note, the tax credit can only be used to purchase homes that cost less than $800,000. Here’s a video to explain the details.

The National Association of Realtors (NAR) also breaks down the new law in a concise and simple way.

If you have already purchased a home and intend to use the tax credit, don’t forget to file. Visit www.irs.gov to find the necessary forms to receive the tax credit.

We would like to thank rutlo for sharing today?s photo via the Creative Commons License.

Chicago-area home sales are slightly up in July compared to July ’08, the first year-over-year increase in over 3 years, as reported by the Illinois Association of Realtors. The graph below more accurately shows the details.

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Price Disconnect Between Buyers & Sellers

Uniquely Chicago sunrise...hopefully a sunrise in the home market is also taking place.

The stats are indicative of how the market is responding. August has been an incredibly busy month for myself and my team. We have increased showings by 50% on most of our listings, ranging over all price points: from the low $200,000s up to the $1 million+ homes. It’s a great sign and we are more confident in the market now than we have been in several months. That said, there is still a disconnect on price between buyers and sellers. The market is still in a less favorable state for sellers, but with realistic and educated sellers, deals can be made and homes can be sold.

Below is a monthly year-over-year comparison of home sales (single-family and condo) in the nine-county Chicago area.  “It’s significant that we are seeing break-even or better sales levels compared to last year at this time on top of the month-to-month increases since January,? Pat Callan, president of the association and owner of Realty Executives Premiere in Wheaton, said in the release by Illinois Association of Realtors^®.

Chicago Not as Strong as Greater Chicagoland

Chicago-area sales also increased by 4% in June 2009 compared with June 2008, the sixth consecutive month that an increase has been reported. This said, sales volume still fell year-over-year in the city, with 1,975 sales in July, down 11.3% from July 2008. In Chicago proper, the median price was $245,000 in July 2009, down 18.3% from July 2008.

“Chicago continues to show a leveling of the marketplace as we see distressed properties being absorbed. With that said, we are a long way from seeing a stable real estate market in Chicago, and we face challenges surrounding lending that do not take into account real local market conditions,” said David Hanna, president of the Chicago Association of Realtors^® in the release. “Policy changes are still needed before Chicago can have a healthy real estate market, and a full economic recovery.” HVCC is one policy that most real estate agents would like to see changed. This government mandated reform is intended to protect buyers from changes in price by an 1/8 of a percent on their loan three days prior to closing. The lender must disclose the final figures three business days prior to closing to the buyer. If the final figures change by 1/8 point up or down at closing, then all parties must walk away from the closing table & wait three additional business days for the lender to recalculate the costs and disclose to the buyer before they can return to the closing table. This is a recipe for disaster, especially with the nature of closings and transitions for people who are moving from another home or a rental and are obligated to be out by a certain date. If the closing is pushed back on their purchase, presumably they will be homeless for a few days incurring additional temporary housing costs in the interim of closing.

The Realtors^® group’s sales figures include new and existing homes. The nine-county Chicago Primary Metropolitan Statistical Area consists of Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, McHenry and Will.

The Market is Picking Up in Chicago

The market is picking up with increased showings, but it’s still a long row to hoe from contract to close; the financing piece is always the last piece of the puzzle and that’s proven to be the most unpredictable piece at present. Finding a good, knowledgeable lender and providing as much documentation up front to the lender with your application is key. It’s a must to know your true ability to obtain financing in this market.

We would like to thank John Picken for kindly sharing today’s photo via the Creative Commons License.

Less South Loop Construction Means Reduced Supply...Eventually

I think there is light at the end of the tunnel. We can certainly see it in our showing activity and in the market. It’s still not an easy market or necessarily a fair market for all involved, but it is changing for the better. Statistics from Illinois Association of Realtors (IAR) definitely back up the these feelings.

Chicago-area sales in May had the smallest drop so far this year at -18.7%. 5,634 single-family homes and condominiums were sold in May in the nine-county Chicago region, compared with 4,747 in April 2008, the IAR said. The association is reporting the following Year-on-Year Declines:

Monthly Year-on-Year Comparison of Home Sales (Single-Family and Condo) in the Nine-County Chicago Area:

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Month-on Month Home Sales Up In Chicago Area

Month-on-month total home sales (which include both single-family and condominiums) were up 19.3% in May 2009 with 8,945 homes sold compared to 7,501 homes sold in April 2009. This is showing the market picking up some speed and buyers feeling more confident in purchasing. Now take this compared to a year ago, when month-on-month home sales were down 21.0% from May 2008 with a home sales number of 11,326 for 2007. We are not back to 2008 numbers yet, but are working on it. The activity is growing and there is an air of growing confidence as well. This is what the market needs right now. There is still a plethora of inventory available, but I think by fall it will start to thin out and come back to more a stable market. Everyone is looking for a good deal right now. Prices are still dropping to meet consumer demands, but are stabilizing just a bit and not falling so drastically. If you have an aggressively priced listing in this market, odds are it will sell.

“We are seeing more activity in the housing market with increased listings, more activity at showings, a surge in interest from first-time buyers as well as some improvement in time on market,” said REALTOR® Pat Callan, president of the Illinois Association of REALTORS®. “First-time home buyers who want to take advantage of the $8,000 tax credit need to be aware that the purchase has to close no later than November 30, 2009 given the December 1 cut-off under current guidelines by the federal government. That means being under contract by early fall.”

Dr. Geoffery J.D. Hewings, director of the Regional Economics Applications Laboratory (REAL) of the University of Illinois said, “Month-to-month sales have recorded increases for the months of March, April and May and this is expected to continue into June. The modest recovery in housing prices and sales has been constrained by the job losses in the economy as a whole. A sustained housing recovery is still not within sight and much will depend on the degree to which federal stimulus funds and the resolution of the state?s budget generate a much needed boost to employment.”

Chicago Home Sales Up 11.5% in May

In the city of Chicago, month-on-month May total home sales (single-family and condominiums) were up 11.5 percent to 1,537 sales compared to April 2009 sales of 1,378; year-on-year sales were down 27.5 percent from 2,119 homes sold in May 2008.

“We?re encouraged to see the bank-owned inventory moving in the marketplace, indicating buyers are finding good bargains, especially in single family homes and flats,” said David Hanna, president of the Chicago Association of REALTORS®. “The city of Chicago condominium sales numbers continue to reflect a critical need for governmental agencies to review the growing disparity in the ability to finance a condominium purchase in the city. This affordable housing will become unaffordable and unattainable to many qualified first-time home buyers in the city of Chicago unless existing federal guidelines, which do not take into account nuances of the local market, are modified.”

Buyers Will Come Out in the Fall

To David Hanna’s quote I say, I think that the feds are addressing this…not quickly enough, but it is being addressed. The FHA guidelines that make it nearly impossible to get financing on a condo in the city are being removed as of October 2009. Some of these guidelines include right-of-first-refusal, liens against the association, and association controlled by the owners (not the developer). Come fall I think we will begin to see a larger number of FHA condo buyers enter the market and also use the $8,000 first-time home buyer tax credit. Watch out lenders…take your vacations now!

We’d like to thank Payton Chung for sharing today’s photo via the Creative Commons License.

The Montgomery's Signature Marble Columns and Glass (Click to enlarge)

Of the thousand’s of buildings in Chicago, I’d like to single out The Montgomery as one of my favorite buildings.  The once corporate headquarters for Montgomery Wards Catalog Company is now a 28-story, 245-unit residential tower in Chicago’s emerging and posh River North neighborhood.

An Icon of Modernism

Montgomery Wards Company originally built their 26 story high-rise in 1972 as a corporate headquarters, on Chicago Avenue just east of the Chicago River.  Things were looking up for Wards at the time and they made a huge statement by hiring Minoru Yamasaki, the Japanese-American architect who was also working on the World Trade Center at the time.  Yamasaki’s ground-breaking design was considered structurally & visually innovative at the time.  The rectangular structure was designed to have wide open floors uninterrupted by walls, so its support columns were sited in the center of the building and its corners were braced with massive concrete walls skinned in travertine marble, which remains today as one of its signature details.

An Amazing Renovation

The building has since undergone an intense renovation to residential condos through the collaborative efforts of Skidmore, Owings & Merrill and Pappageorge/Haymes.  They created a mirror-like wall of blue-green tinted windows & brushed aluminum framing anchored by the white travertine marble corners.  With this intense combination, The Montgomery commands a city skyline presence with its modern lines. Additionally, they reconfigured the elevators for greater efficiency, added balconies to the east and west facades, and built a very unique glass parking helix.  The first residential units were offered in 2005.  The units range in size from 1 to 4 bedrooms, have 10.5′ ceilings on the first 25 floors, 16′ ceilings on the 26th floor and 12′ to 27′ ceilings on the 27th and 28th floors (you read that right).  The luxury common amenities include a concierge, rooftop zen garden, state-of-the-art fitness center, private dog run, enclosed bicycle storage room, storage lockers, dry cleaners, community room, 24-hour doorman and on-site management, and restaurant on the first floor.

Stunning Lobby

The Montgomery's Lobby

Setting the stage for the building’s modern asthetic, Darcy Bonner master-minded the stunning re-design of the 4,000 sqft lobby with 30′
ceilings to create its glass canopy entrance.  A glass wall underscores a narrow reflecting pool organizing the space into the lobby and mail room.  Bonner used luxurious finishes, such as Wenge paneling, travertine marble, oversized upholstered velour furniture, lighting
fixtures (all custom Bonner designs) to give the space intimacy and warmth.  The lobby has become the gateway to modern luxury in this building. Many savvy Chicago fasionistas regard The Montgomery as an icon for modern living and the most significant, desirable high-rise in River North.  Those who have put down roots in The Montgomery are design savvy Chicagoans that include noted designers, dealers, and art collectors. The Montgomery has become an icon for modern living.

In this market of long listing times and high inventory, there are a few ways to make your home stand out and sell quicker.

You’ve Got to Start with Price, Price, Price

The absolute most important item is price.  If your price is not competitive and realistic to what the market will bear, then you’re behind from the beginning.  Reviewing recent comparable home sales and listings in your neighborhood from the previous 3 to 6 months with your real estate agent is of the utmost importance when listing your home for sale.  Research shows that in the first two weeks of listing, most properties will achieve the highest possible sale price.  After four to six weeks, you may need to consider a lower price (based on recent, comparable sold properties), which will in turn re-energize your listing by reaching a new pool of buyers.

In addition to the pricing strategy, there are several inexpensive ways to make your home shine and rise to the top of a buyer’s list.  Get ready for some sweat equity.

Neutral Decor Sells Homes

For starters, take a good look at your home…an unbiased look, I should say.  Walk into your house like you’re seeing it for the first time and rip it apart…just like you do when you go over to your neighbors or friends houses.  Then decide what decor is your taste and what decor is more neutral. Then keep the neutral and minimize/remove your beloved decor…even if they’re so comfortable it’s impossible to see them go.  You’d be surprised how many buyers cannot look past the furniture or wall color, thus immediately eliminating your home from their list, even though it make fit all of their criteria.

When we grow accustomed to our space, we become blind to our own things.  Eventually, everything needs updating, and a quick brainstorm of new ideas can have a big impact on updating your home’s look.  But, remember to be honest about outmoded design elements. The following tips can help get a home up-to-date without breaking the bank.

Edit/Rearrange

Re-energize a room by simply rearranging the furniture. Be creative and mix and match with other rooms in the house to make the living space be its most spectacular.  A few items to consider are lamps, rugs, accessories, and mirrors. You’d be surprised how much depth a simple mirror can add to a room, thus creating a whole new feel.

Be Green and Plant

Indoor plants add texture, warmth, and color to any room. And don’t forget about decorative planters?they make a statement on their own.  It will be important to maintain the plants, which yes, means watering them weekly and doing a bit of pruning. While you’re pruning, but keep in mind that you’re efforts are to recoup the highest sale price possible. Positive thinking goes a long way.

Paint

One of the easiest and most cost-effective ways to make a substantial change is by painting. It doesn’t even need to be a whole room, unless of course your room happens to be chartreuse green or bright orange!  Use more neutral colors in living spaces and consider just doing an accent wall if you can get away with.  Take it from my experience, always do a test before painting the whole room.

Organize

You want your home to have a lived in feel, but there’s a fine line between “lived-in” and messy.  Clutter just happens – the daily mail, kids homework, baseball bats, toys?you get the picture.  Organizing will make a space feel polished while maintaining utility. Hooks and shelves inside the door to hang coats and keys, canvas bins or natural baskets contain magazines and mail, and shelves neatly display collectibles and pictures.  The added value is that you benefit from the organization immediately.

Clean

Again, take an honest look at your home; would you buy your house in its current condition.  Some people can say, “yes,” and for that I congratulate you.  While others…not so much.  Look at your floors, corners, nooks and crannies in every room?a buyer does.  Present your house in its best condition.  Scrub grout, seal natural stone, rub out scratches/nicks on wood floors. “Get down on your hands and knees and detail the floors,” Birdsong says. “It takes a little elbow grease, but the results are well worth it.” Vinyl flooring is a bit harder to spruce up but usually can be replaced easily and inexpensively.

Replace/Repair

Look for worn, outdated, or just boring old handles, hinges, switch plates, lights, faucets, toilet seats, bathroom accessories, etc. and repair or replace them. The cost is minimal and gives a big, but subtle bang for the buck.

Light it

Most people don’t like a dark or too bright home?both present as a harsh first impression.  Accent lighting, such as lamps, sconces, or lighter curtains, can make a big difference and set a mood. You can also add dimmers in the dining room, bathrooms, kitchen, and even the hallways for less than $5 each. Then adjust the lighting to create the mood you want.

With a little work, your home will have a better chance of selling, and selling at the highest price possible. Take the time to be honest with yourself and do a thorough evaluation of the home. Or, ask your real estate agent to be honest; they usually have no trouble if you give them permission to be brutal!

Photo by Marya

If you’re new to Chicago, you have probably been scratching your head a lot lately. You were driving down the street and you saw a lawn chair in a semi-shoveled-out parking space. Do you move the chair? What’s going on? Welcome to Chicago, the city where if you shovel out a public parking space, you keep it! I like to call it parking squatting. My best friend, a Chicago native, explains away this practice as simply a Chicago tradition.

Absurd! City Streets Are for All to Use

Parking Squatting At Its Finest - Click to Enlarge

How does placing your scavenged orange construction cones, summer lawn furniture, picnic bench, or, even worse, something from the back of your utility closet, like a broom, a milk crate, or cement block, in your recently shoveled out parking space on a city street give you the right to put dibs on it? What form of parking ownership is that? Does it apply to the space immediately in front of your private residence or can you self-proclaim parking rights anywhere? And, most important, when is the official start of parking squatting season? Is it October through March? Because I don’t see people squatting in the summer months. Do you need a permit to toss your personal property into a parking space to reserve it? Can you leave a chair there all day while you go to work? So many questions… Maybe the city should publish a Parking Squatter’s Guide To Chicago with all the answers.

I am the first to recognize the amount of time and effort it took those individuals to release themselves from the grips of the heavy snow. It always seems to be made worse because the people are often digging with their ice scrapers, an over-sized soup ladle, or even their gloves. But does that give them a free pass? Not in my opinion.

Revenge Is Best Served Stealthily on a Cold Night!

Beware if you are brave enough to remove that yellow vinyl dinette chair/space holder and take the public parking space for yourself. Be warned of the strength of a neighborhood’s solidarity and one or more witnesses peering at you from behind the drapes. For when you return you may find your tires slashed, your paint job keyed, or, even worse, the dreaded icing up the car with a bucket of water. Was it the protective neighbor or the shoveler themselves? You’ll never know. But be sure they know you now and you might as well put a big scarlet PST on your coat, because you are now a Parking Space Thief!

And don’t even think you can outsmart them by removing their markers from that prized shoveled space and replace their things with your own. When the city publishes the Parking Squatter’s Guide To Chicago they will have a whole chapter on how putting your stuff into the space does not transform it into your new space! I speak from experience?they know the space they dug out and where it was. It does not confuse them and your plot will be foiled with dastardly results.

Even the mayor defended this peculiar practice in 2000 saying, “If someone spends all their time digging their car out, do not drive into that spot.” Official city policy, of course, is to remove the debris, but few police bother.

How do you think Chicago got its big shoulders? Shoveling out parking spots!

Please leave your thoughts below in the comments section!