Have you ever wondered why we use real estate attorneys in Chicago?
Do you really need one?
Are they worth the extra $650 or so charge on top of all the other expenses of buying and selling real estate?
In a word, YES!
Especially if you are lucky enough to be represented by a great one.
Two weeks ago I was in a closing with my buyers who were purchasing a new construction condominium in Bucktown.
The purchase included a parking space.
After going through all of the loan documents with my clients, Gael Morris, their attorney, started reviewing all the documents provided by the sellers, including a copy of the survey which Gael requested be provided at or before closing.
Well, as she was reviewing the survey she discovered that the sellers were conveying a parking spot that was not large large enough to be considered legal by the City of Chicago.
The closing was postponed until the sellers’ attorney obtained a new and corrected survey and filed an amendment to the condominium declarations. Because of her attention to detail and tenacity the buyers’ were ultimately conveyed what they contracted to purchase.
I would say that the legal parking spot was worth that $650 legal fee, wouldn’t you?? For more information contact me by visiting my website: http://connieengel.rubloff.com or contact me at 312-264-5864 or email: connie.engel@rubloff.com
Posted By: Connie Engel
By Mark Pullinger
Each night at story time my son loves a bawdy set of kid stories titled Captain Underpants, in which two boys named George and Harold are tortured by their teachers who are invariably portrayed as authoritarian boobs. One of the funniest gags occurs when a teacher (Ms. Rible, Mr. Meaner, Ms. Anthrope, take your pick) makes an announcement to the class where good news is always tempered with bad news. The teacher will say something like “Today we are going to have a party”, and the class erupts in shouts of “Hooray”, only to be followed by the second announcement, “for my birthday” yielding a painful cry of “Awww maaan.”
If anything describes the economic roller coaster we are on right now it is this classroom scene. Good news is being followed by bad and bad by good ad infinitum. How do we make sense of all this? This week the stock market is up because of President Obama’s plan to buy out toxic assets and because home sales were up nationally in February by 5.1%. Home prices haven’t been this affordable for decades and interest rates are low (“Hooray”). On the other hand, 45% of sales are foreclosures, the inventory of homes for sale remains at a dismal 9.7 months, Illinois unemployment rose to 8.6% and is climbing, and Illinois home sales are down 29% over February 2008 (“Awww maaan!”).
To say the least, it is hard to predict the future right now. Even if the future is considered next week! I think it helps to step back and look at the fundamentals of our economy and try to get some perspective from the past. Since it is fashionable to compare this recession to The Great Depression of the 1930’s, lets consider the following:
- Employment: In 1931 unemployment reached 25%. Most economists agree that we are headed for 10 to 12 % unemployment. Unemployment is not expected to bottom out until 2010. This is more in line with a really bad recession like that of the mid ‘70’s. Certainly not great, but not even close to the horrendous unemployment of the ‘30’s.
- Banks: By the end of the 1930’s depression, more than 9,000 banks failed. Depositors lost ALL of their savings. So far 50 banks and lending institutions have failed since August of 2008. The FDIC raised their insurance to cover $250,000 in deposits, so most of the people involved did not lose their savings.
- Government Reaction: The Hoover Administration responded to its crisis with a policy of “retrenchment”, that is to cut Federal spending to the bone. The only economic force capable of dealing with the financial crisis (i.e. the Federal Government) thus was pulled to the sidelines. Both President’s Bush and Obama massively intervened in the economy, to the tune of some $10 trillion. To put the amount of government intervention in perspective, the annual GDP of the US is $14 trillion. Economists argue over whether it is too much stimulus, leading to massive inflation later on, or not enough. Most agree that it will eventually move the economy forward.
- Trade Policy: In 1930 Congress passed the Smoot-Hawley Tariff Act, raising trade barriers and deepening the World Depression. We have seen some worrying legislation from Congress, namely “Buy American” provisions, in recent legislation. For the most part, however, our government has cooperated with foreign governments on trade policy and even included foreign banks in the TARP funds. In 1930 trade represented 3% of GDP. It now represents 30% of GDP, so raising trade barriers would be disastrous for our economy.
So much for 2009 vs. 1930, but what is going on now that might indicate progress we are making in getting out of this swamp?
- One of the great fears right now is deflation, a spiral of falling prices with no end. So far this year retail sales have risen by 1.8%. Retail sales drive 70% of our economy, so this is very encouraging.
- The Producer Price Index fell 1.9% in December 2008, but has increased .o8% in January and 1% in February of 2009. This is hugely important because it indicates that demand for goods still exists. Oil prices are up 25% in the past 4 weeks also indicating strong demand.
- February housing starts are up 22% over January 2009. It is true that starts are down 47.3% over February 2008, but if monthly increases continue then we are headed in the right direction.
- Home sales are up nationally 5.1%. The key figure to watch is housing inventory, which has been static at about a 10 month supply of homes at the current absorption rate. A normal supply is 3 – 4 months. In Chicago, sales were up 3.9% since the first of the year and in Illinois overall homes sales were up 8.9%. California may be leading the way as first time buyers drove up California sales by 42% in February, 58% of which were foreclosures. Hopefully lower prices, interest rates, and the Obama administration’s plan to help first time buyers with a tax credit will increase home sales. First time buyers will probably be the key to sopping up the excess inventory. When the inventory figure starts to go down, you know that we are making progress.
- Shipping rates are up 144% over the first of January, indicating world trade is improving.
- Banks are reporting profits early in 2009, indicating that this important sector may be making a comeback.
The stock market is betting on our future, so by definition this is not “irrational exuberance.” While the general economic news remains downbeat there are now some very hopeful signs that we may be reaching the bottom. According to the recent UCLA forecast the recovery will be slow in coming. Maybe so. But national economic trends remain outside the control of us mere mortals. Patience, persistence, sticking to basic sales principals and a positive mental attitude will be the keys to your personal recovery plan. Staying away from the news, something I find almost impossible to do, is a great way to stay positive. If you need a laugh, try Captain Underpants.
Move Inc. survey shows pent-up demand
By Inman News, Tuesday, March 24, 2009.
Inman News
Nearly 80 percent of Americans don’t expect to buy a home in the next five years, but more than half of those that do plan to buy this year would be first-time homebuyers.
That’s according to a survey commissioned by Realtor.com operator Move Inc., which also found one in five homeowners with mortgages have contacted their lender hoping to restructure their loans. About half said they’d succeeded.
A crackdown on mortgage fraud, lower interest rates, and tax breaks for first-time homebuyers were seen as the three most important factors to stabilizing housing markets among 1,005 adults surveyed by OmniTel on behalf of Move from March 6-8.
Although 23 percent said they planned to buy a home in the next five years, only 5.8 percent said they expected to complete that purchase within the next 12 months. About 7 percent said they planned to purchase a home in one to two years, and 11 percent planned to purchase within two to five years.
More than half of those planning to buy in the next 12 months would be first-time homebuyers (53.5 percent), which compares to the 41 percent market share actually taken by first-time homebuyers in 2008, according to the National Association of Realtors.
“It’s not all doom and gloom. We found Americans are optimistic about homeownership despite concerns,” said Move Inc. CEO Steve Berkowitz in a press release detailing the survey results. Move said the survey demonstrates the housing downturn “has created significant demand for homeownership especially among first-time homebuyers.” …CONTINUED
By Mark Pullinger
This oft repeated question from the back seat of the family car embodies the overwhelming hopes of all who want to see an economic turnaround sooner, rather than later. Today’s headlines from NAR indicate that February’s existing home sales were up nationally by an unexpected 5.1%. Prices are even up slightly over January of 2009. This is definitely good news, but is it the turning point we are all looking for?
The short answer is no. It is encouraging for sure but we need to see a similar increase next month in order to establish some sort of trend. Against the national trend, Chicago area sales fell 29% (according to IAR) and in the City of Chicago sales fell 40% over one year ago. Prices are down about 24% over one year ago. Clearly, the Chicago area has a way to go yet before we will see a turnaround.
California is seeing its sales increase by 42.5% over February 2008 as first time buyers go on a bargain hunting binge. Sales have topped previous year’s sales for the 5th month in a row. Why is this happening? Foreclosures and distressed properties made up 58% of the sales! Median prices in the Bay Area are down 45.5%. Mortgage rates (30 year fixed rate conforming loan is now at 4.8%) are at all time lows, which definitely makes it easier for those entering the real estate market for the first time.
As John Walsh of DataQuick put it, “It’s hard to imagine resale activity getting much stronger in many inland areas, especially if the deep discounts fade as a result of new efforts to stem foreclosures and stabilize prices.”
With prices falling and rates low, it is likely that the first time buyer will lead Chicago out of this recession. Don’t despair; it will happen and when it does things will probably happen more quickly than most people imagine. California is showing the way. Unfortunately, kids, we’re not there yet.
San Jose Mercury News | January 5, 2009
First-time home buyers Andrew and Kaori Nielson made a deal on a two-bedroom San Jose townhouse last month, even though they knew that property values are falling.
”We probably would have waited longer, but our lease was up, and we have our son,” Andrew said, referring to the couple’s 6-month-old baby. “We thought now was the time.”
Would-be home buyers in weakening markets worry about “catching a falling knife” — not wanting to ink a deal before home prices hit bottom. Yet home sales in Santa Clara County were up 14 percent in November from the same month a year before, despite a 39.5 percent plunge in the median price of a single-family home.
That raises the question: Who’s out there buying homes?
Read the full article here.
Contact Sue McAllister at smcallister@mercurynews.com or (408) 920-5833.
James M. Kinney, president of Rubloff Residential Properties, has been elected president of the Council of Residential Brokerage Managers, an esteemed branch of the National Association of Realtors.
The Council, which has nearly 7,000 members worldwide, confers the Certified Real Estate Brokerage Manager (CRB) designation and is the governing body of the most prestigious real estate network for brokers, owners and managers in the nation.
Read the full article here.
Call me cynical, but during the last two years our friends in the press have seemed all too willing to predict that the sky is falling when it comes to the economy and especially real estate. Today there appeared an article, like a spring flower pushing itself hopefully up through the snow, who’s headline boldly stated “It May Be Time To Buy a House” in the New York Times no less! Since most of our economic woes are self-inflicted psychological wounds, it was especially heartening to see the first flush of a recovery in press opinion. If The New York Times says it, it must be true, right? Maybe we have turned a corner of sorts.
The article advises that with inventories of new and used homes high and with unprecedented low mortgage rates, first time buyers have a unique opportunity to cash in and get a home. As the reporter Ron Lieber states:
“Housing prices have fallen drastically from their peak levels in many areas of the country. Rates on 30-year fixed-rate mortgages are already close to 5.5 percent, and this week there were suggestions that the federal government might try to drive them down to 4.5 percent, a truly incredible figure to be able to lock in for three decades.”
For the full article…
