Windy City Media Group Frontpage News

THE VOICE OF CHICAGO'S GAY, LESBIAN, BI, TRANS AND QUEER COMMUNITY SINCE 1985

home search facebook twitter join
Gay News Sponsor Windy City Times 2023-12-13
DOWNLOAD ISSUE
Donate

Sponsor
Sponsor
Sponsor

  WINDY CITY TIMES

Chicagoland's real-estate market, from foreclosures to luxury homes
Extended for the Online Edition of Windy City Times
by Andrew Davis
2010-06-23

This article shared 4109 times since Wed Jun 23, 2010
facebook twitter pin it google +1 reddit email


With the economy being as mercurial as it has, people have had many questions regarding the area's real-estate market. Jim Kinney, vice president of luxury sales for Baird & Warner, talked with Windy City Times about buying/selling, foreclosures and luxury portfolios—and provided a couple of surprising facts in the process.

Windy City Times: Obviously, the economy has affected the real-estate market, as it has everything else. How is the Chicagoland market looking right now?

Jim Kinney: Last year, of course, was the bottom of the market, more or less. Things came to a standstill with credit markets tightening up and everyone dazed by the stock-market collapse, so values plummeted. But we've been slowly building out of that because the government responded with the home-buyer tax-credit stimulus and that ran through the April—and that helped the first-time buyer market, anyway. There was no stimulus package for the luxury market, however.

So all of these markets, in one way or another, are related to employment. If you have unemployment levels as high as you do, you're not going to have a super-robust housing market. So I think, as a prognostication, we're in for a very slow and deliberate climb out of this—but I think, unless another shoe drops in the financial world, we've probably seen the bottom.

We've got lots of inventory. Depending on what price points you're in, we've got two to eight years inventory on the market. Right now, in the luxury market, on single-family homes over $1 million there's a 36-month supply market-wide, and on condominiums there's a little more than a two-year supply. Just to give you a point of reference, it's usually considered in balance when there's a six-month supply. So we're way off a balanced-market scenario.

If you're a buyer, put a smile on your face. Interest rates are at historic lows. If someone's getting into the market and has equity to make the purchase, that person's going to luck out in several ways. There's a pullback from high prices and record-low financing. If someone's in the market, that person can probably still sell at a profit if he or she bought a long time ago; if they're looking to trade up, they might take less of a profit on what they're selling, but they'll be able to trade up cheaper than they thought.

The people who are [ out of luck ] are those who bought at the height of the market, in 2005-2007, and have no equity. A lot of people are underwater, meaning they owe more on the mortgage than the home is currently worth. But it's only a problem if they have to sell the property and/or re-finance to take out equity.

WCT: I noticed on the Baird & Warner website that there's an area for foreclosures? Now when do you recommend someone use that particular feature?

JK: We added that to the website because we've gotten so many requests; foreclosures are [ definitely ] part of the market right now. Earlier on this year, almost half of the properties closed in the MLS [ Multiple Listing Service ] were short sales [ when the sale proceeds fall short of the balance owed on the property's loan ] or foreclosures. So we thought we'd make it easier for consumers to find foreclosures.

A foreclosure is when a bank has taken a property back because the loan has gone bad. Just because a property is a foreclosure does not mean it's a deal. Some of these lenders were lending loan-to-value amounts on fairly inflated price tags—and the first thing they do when they take a property back is to recapture the full amount they loaned. Well, if the market is headed south 20-30 percent, they're not going to get that full amount—but they're going to start there. The consumer has to look at what they're asking for, and see that you're not paying over market. "Foreclosure" does not equal "good buy." But consumers see possibilities because they not dealing with sellers but lenders, and often the lenders are willing to take losses. Be prepared to wait to see if the bank is willing to accept a big loss.

WCT: That's a very good point about foreclosures not necessarily being deals. I think many people have that preconceived notion.

JK: Yes. It's like auctions. People think that they can get items at rock-bottom prices. I've actually seen auctions where properties have sold more at auction than they were listed for in the MLS. People get caught up in the bidding frenzy and don't realize how much they pay.

WCT: Let's also talk about something that most people see on the other end of the scale: luxury homes. What are the advantages and disadvantages of seeking such a property?

JK: Often, the luxury-property buyer wants a home that speaks to their lifestyle. It could be an executive or someone else who wants a property that has more than four walls and a roof. It's a way people reward themselves for their success in life. There's a lot of ego often tied to high-end markets. But, at the same time, people like nice things and the higher you go, the more unique the property can become. If you want a 20,000-square-foot home with a basketball court, you're not in FHA [ Federal Housing Administration ] financing.

Back when we had all those acronyms—ARMs and ALMs—one client said he had CRAP. I asked, "What's that?" He said, "Cash really answers the problem." [ Laughter ] A lot of our high-end buyers are cash buyers because there is no government secondary market for jumbo mortgages. Last year, when the market turned south and credit became very tight, there was the stimulus for the low-end market but the jumbo market really froze up; we saw interest rates jump up over 8 percent and down-payment requirements getting as high as 30 percent in some cases. So those are the constraints of the high-end market—but someone might argue that if you're buying a $4 million house, you should be able to have 30 percent down.

One pitfall with the high-end market is that, with the economic downturn, your potential-buyer market can be miniscule. Typically, we say that the high-end market is the last one to swoon and the first to revive. When the upper end starts to pick up, it's a general consensus that the [ housing-market ] bottom has been reached.

Some people say that all things in real estate start in California, and work our way. The high-end market in San Francisco has been fairly robust recently, with bidding wars and such. So it seems like that market has bottomed out and turned upward.

With Chicago, there was so much new housing inventory added—you can see how different the skyline looks now—it's going to take a little longer for us to bounce back. We do have supply issues.

WCT: But you're confident that things will at least slowly bounce back.

JK: Everything is a cycle. I tell people that if you want to sell high, you have to buy low—and you have to look at this as an opportunity to buy. I've seen several waves; I rode the inflationary wave of the '70s, when we had very high interest rates and very high inflation. You could buy something and double your down payment in three to six months—but your money was becoming worthless, although you had more of it. [ Laughs ]

Then the market tanked in '79-'80, when we had those super-high interest rates. And the first few years of the '80s were a real struggle, not unlike what we have now. Then the market came back in the mid-'80s and we had a downturn in '91. We were due for a downturn in '97, when there was the Asian financial crisis; then the government lowered interest rates, which was like pouring gasoline on a fire. It kept the housing market roaring along—and then we had Y2K, but the dot-com bust didn't really hurt the housing market that badly.

WCT: That's interesting. I thought that, with all the resulting unemployment then, it would hurt the market severely.

JK: The dot-com people relocated fairly quickly. There was some job loss, but it wasn't that bad. These were highly trained people who found other positions pretty quickly. We weathered the storm fairly well in the housing market.

In Chicago, things were running strong without a downturn since '91, so [ a setback ] was long overdue. Because you're in a cyclical market without a down cycle, when you do have one it's going to be longer than if you have them at a regular pace.

WCT: What would be your top tips for buyers and sellers?

JK: For sellers, the tip is to price it right. If you realize that we have two, three, four years of inventory, you have a one-in-four chance you might sell this year. The only way you can get to the front of the line is to price aggressively. Don't leave a lot of room for negotiation.

For buyers, I would say to study the comparable sales data and to approach all listings not on face value, but with the [ help of ] research. Don't be afraid to make a market-price offer on something that's overpriced.

WCT: Is there anything you wanted to add?

JK: I just want to say that it was the gay population that made most of these neighborhoods. They go in, they find the older housing and fix it up. They go where things are really cheap and the area's run down—and, the next thing you know, they create trendy neighborhoods. So the gay population, in many instances, has been the saving grace across the country for turning neighborhoods around and bringing value to real estate. So that's something that should be noted—the community does a lot to promote value.

For more on Jim Kinney, visit www.bairdwarner.com/jim.kinney.


This article shared 4109 times since Wed Jun 23, 2010
facebook twitter pin it google +1 reddit email

Out and Aging
Presented By

  ARTICLES YOU MIGHT LIKE

Gay News

City Lit Executive Artistic Director Brian Pastor talks theater, comics, queerness 2024-03-26
- City Lit Theater has announced its programming for the 2024-25 season—which will be the company's 44th. It will also be the first season to be programmed under the leadership of Brian Pastor (they/them), who will assume ...


Gay News

Brown Elephant Returns To Northalsted 2024-03-26
- Brown Elephant's Lake View location is moving to Northalsted and already accepting donations. Howard Brown Health, the largest LGBTQ+ health center in the midwest, operates three Brown Elephant resale shops in the Chicagoland area to help ...


Gay News

Center on Halsted's signature Human First Gala to return 2024-03-11
--From a press release - CHICAGO, IL — Center on Halsted's signature Human First Gala will be held on Saturday, April 20 at The Geraghty. The gala brings together LGBTQ+ community members and allies for an evening of celebration to recognize ...


Gay News

SAVOR At Willies 'n Waffles, sexuality is on the menu 2024-02-12
- Having written about Chicago's culinary scene for at least 15 years, this writer has covered all sorts of spots—from Michelin-starred upscale establishments to those so-called "holes in the wall" that can serve some of the best ...


Gay News

Chicagoans indulge in a World of Chocolate 2024-02-11
- AIDS Foundation of Chicago hosted its 2024 World of Chocolate celebration the evening of Feb. 9 at Union Station. Top chocolatiers from across the city allowed guests to sample numerous confections, hors d'oevres and libations for ...


Gay News

TAWANI Foundation commits $25K to StartOut, supporting LGBTQ+ entrepreneurship 2024-02-08
--From a press release - CHICAGO — February 8, 2024 — The TAWANI Foundation, a 501(c)(3) that provides support in the areas of arts and culture, historical preservation, health and wellness, LGBTQ+ and human rights ...


Gay News

The Jeff Awards announces the 50th-anniversary non-Equity theater nominations 2024-02-06
--From a press release - (Feb. 6, 2024 - Chicago) — Celebrating its 50th anniversary awarding recognition for Non-Equity theater, the Joseph Jefferson Awards announces its nominations for theater excellence among Non-Equity theater during the ...


Gay News

Comcast NBCUniversal partners with News is Out, Word In Black on fellowship program highlighting Black, LGBTQ+ issues 2024-02-06
--From a press release - Digital Equity Local Voices Lab Fellows to be placed at 16 local publications to receive training and create content Philadelphia (Feb. 6, 2024) — News is Out [ https://newsisout.com ] , a queer media collaborative of ...


Gay News

Mr. Chicago Leather contest returns to Touche following 2022 controversy 2024-02-01
- The Mr. Chicago Leather contest returned this past weekend, January 26-28, to Touché Chicago, over a year after numerous community members were incensed by a racist incident. But the bartender who quit Touché following the incident ...


Gay News

Looking back at Chicago LGBTQ+ community's stand against Anheuser-Busch 2024-01-30
- As conservatives across the country boycotted Anheuser-Busch products for Bud Light's partnership with trans woman Dylan Mulvaney in 2023, LGBTQ+ bars in Chicago removed their products for a different reason. Following the deeply negative response to ...


Gay News

WORLD Toronto businesses, French law, Thai bills, fight in Jamaica, Jonathan Bailey 2023-12-22
- Some Toronto LGBTQ+ business owners say they are worried that they're being shut out of a provincial grant program because their businesses sometimes include sexual products or services, which are banned in the program's eligibility rules, ...


Gay News

Openly gay OpenAI CEO back in charge of company 2023-11-22
- On Nov. 21, OpenAI said it had reinstated Sam Altman as its chief executive—the latest chapter in a saga that involved a boardroom coup and staff backlash. The company, which is behind ChatGPT, also said it ...


Gay News

NATIONAL Bishop removed, business news, Jezebel shutting down, MAP head 2023-11-17
- Pope Francis removed the bishop of Tyler, Texas—a conservative prelate active on social media who has been a fierce critic of the pontiff, PBS reported. A one-line statement from the Vatican said the pope had "relieved" ...


Gay News

Howard Brown Health Workers United members gather for post-strike rally 2023-11-16
- Howard Brown Health (HBH) Workers United members held an evening post-Unfair Labor Practices (ULP) strike rally Nov. 15 in front of the new multi-story HBH Halsted clinic. It was the conclusion of their two-day strike that ...


Gay News

Longtime Edgewater framing business owner contemplates what's next 2023-11-06
- The large spit stains were still crusty and dry on Wall to Wall Framing's window on Saturday. They're evidence that remains more than two weeks after the incident that brought attention to the custom-frame shop's years-long ...


 


Copyright © 2024 Windy City Media Group. All rights reserved.
Reprint by permission only. PDFs for back issues are downloadable from
our online archives.

Return postage must accompany all manuscripts, drawings, and
photographs submitted if they are to be returned, and no
responsibility may be assumed for unsolicited materials.

All rights to letters, art and photos sent to Nightspots
(Chicago GLBT Nightlife News) and Windy City Times (a Chicago
Gay and Lesbian News and Feature Publication) will be treated
as unconditionally assigned for publication purposes and as such,
subject to editing and comment. The opinions expressed by the
columnists, cartoonists, letter writers, and commentators are
their own and do not necessarily reflect the position of Nightspots
(Chicago GLBT Nightlife News) and Windy City Times (a Chicago Gay,
Lesbian, Bisexual and Transgender News and Feature Publication).

The appearance of a name, image or photo of a person or group in
Nightspots (Chicago GLBT Nightlife News) and Windy City Times
(a Chicago Gay, Lesbian, Bisexual and Transgender News and Feature
Publication) does not indicate the sexual orientation of such
individuals or groups. While we encourage readers to support the
advertisers who make this newspaper possible, Nightspots (Chicago
GLBT Nightlife News) and Windy City Times (a Chicago Gay, Lesbian
News and Feature Publication) cannot accept responsibility for
any advertising claims or promotions.

 
 

TRENDINGBREAKINGPHOTOS







Sponsor


 



Donate


About WCMG      Contact Us      Online Front  Page      Windy City  Times      Nightspots
Identity      BLACKlines      En La Vida      Archives      Advanced Search     
Windy City Queercast      Queercast Archives     
Press  Releases      Join WCMG  Email List      Email Blast      Blogs     
Upcoming Events      Todays Events      Ongoing Events      Bar Guide      Community Groups      In Memoriam     
Privacy Policy     

Windy City Media Group publishes Windy City Times,
The Bi-Weekly Voice of the Gay, Lesbian, Bisexual and Trans Community.
5315 N. Clark St. #192, Chicago, IL 60640-2113 • PH (773) 871-7610 • FAX (773) 871-7609.