There’s a lot of things to love about Chicago. Although it’s known for amazingly delicious food such as Chicago-style pizza and dogs, the “Windy City” is also home to more than 400 major corporations – 28 of them on the Fortune 500, ranging from Allstate to Walgreens. The “City of Big Shoulders” is also a leader in emergent technologies such as green energy, biotech and information technology.
For more than 156 years, family owned real estate giant Baird & Warner has helped thousands of Chicagoans fulfill their dream of home ownership. Committed to fair housing and diversity Baird & Warner operates in the belief that everyone deserves the opportunity to own a piece of the American Dream.
And I would certainly be remiss to exclude the Chicago Bulls from the conversation about Chicago. The Bulls and their dominant player, Michael Jordan, led the franchise to victory in the 1990s – winning 3 sequential NBA titles – the third franchise in history to do so.
Other things that Chicago is famous for may not be as well known. Did you know that it was in Chicago, in 1950 that the remote control was invented? Another interesting tidbit is that the very first Ferris wheel was unveiled at the 1893 World’s Columbian Exposition in Chicago.
The real estate market, however, is a tough one for potential homeowners. Housing demand in “The City That Works” is up, and renters can expect to pay high rents and search for quite a while to find something that suits their needs. Studies recently undertaken reveal that the 2 year rental increase trend of homes both in Chicago and surrounding areas will continue throughout the rest of this year, rising by as much as 2.9% and perhaps even more next year. Despite the fact that rent prices will vary depending upon the neighborhood, the overall trend is that rents are increasing as the demand is increasing.
Sean Morrissey, a Keller Williams agent in St. Charles said, “My perception has been since the economy hasn’t gotten much better and mortgage financing is harder, it’s created a large pool of tenants. There’s just as many tenants as homes, or even more. There has been probably as much as a 5 percent increase in rental prices over the past year.”
Many of these individuals who are renting, would likely have been home buyers in a less stringent market, however tighter lending standards adopted by banks have pushed many potential homeowners into the rental market.
Denny Malmgren, a Re/Max Town and Country agent in Aurora said, “I see a lot of cases of young couples in townhomes who, after foreclosure, moved back in with their parents to recoup their savings and their credit. It’s rare that you get an application where the credit is strong.”
“There are more renters in the market than we are finding homes, and for buyers it’s hard to qualify for mortgages,” stated Erin Hill, agent at Coldwell Banker Honig-Bell of Aurora, “There are a lot of people who have lost their homes or gone through short sales who have to rent for a couple years before they can qualify for a mortgage again. That has increased demand, which has really inflated rental housing.”
Add to the housing crunch the fact that new construction of apartment buildings in the region (excluding downtown Chicago) is pretty much nil. The suburbs don’t want apartments – they make sure, through the power of the zoning code, that any multi-family structures are condos.
But what if you want to buy a home instead of rent?
Hill said, “In my opinion, anytime you’re renting when you do not have to, you’re losing money. Now is still an excellent time to buy because there are amazing deals out there for purchasers. We’re at an all-time low in housing prices, which means that you can buy so much more home for your money than three or four years ago.”
For those individuals who cannot quality for home ownership, Morrissey offers some advice. “It’s going to come down to income and credit scores,” said Morrissey. “Usually, what I look for is monthly rent that’s 30 to 40 percent of monthly income, and a credit score above 600. If you don’t have either of those, try to have two months of rent saved up for a security deposit. Most homeowners always agree to that.”
Of course, if you are one of the fortunate few who has an extra million or two to spare, there’s an amazing bargain in Chicagoland to be had, but only if you don’t mind buying from a “celebrity.” Rod Blagojevich is offering his 13 room, Mediterranean-style home, located in the exclusive Ravenswood Manorneighborhood for a measley $1.07 million!