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08/21/2023

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01/11/2023

Your home is as beautiful as the woman you marry into it 👌!

01/08/2023

The magic thing about home is that it feels good to leave, and it feels even better to come back.....Do you have a home or a house?

12/21/2022

4 things driving Chicago property tax bills higher:

A house in the 1300 block of West Cullerton Street in Chicago's Pilsen neighborhood on Dec. 1, 2022. The 2020 tax bill for this property was $279.76 and jumped to $1,261.18 in 2021.
A house in the 1300 block of West Cullerton Street in Chicago's Pilsen neighborhood on Dec. 1, 2022. The 2020 tax bill for this property was $279.76 and jumped to $1,261.18 in 2021. (Erin Hooley / Chicago Tribune)

Tax bills are landing in mailboxes across Cook County — you can also find yours online — meaning home and business owners will finally know how much of the county’s $16.7 billion bill they’ll be picking up.

That overall figure is about 4% higher than last year. In its annual analysis of all 1.8 million bills, Treasurer Maria Pappas’ office — the one that sends those bills out — sought to identify what was driving those taxes up.

The total amount billed countywide increased by $614 million over the previous tax year. Homeowners are picking up $330 million of that rise, while businesses, industrial buildings and big apartments are paying $285 million, according to the analysis.

Bills are calculated after several steps: Local governments, including school and park districts, set their property tax levy to help pay for operations. The assessor sets the values of properties, then makes adjustments for exemptions or other incentives. The clerk then determines tax rates based on various levies and overall assessed values for each unit of government. The treasurer then sends out the bills, collects payments and distributes the money to local governments.

One fundamental at play: in Chicago, both the city and Chicago Public Schools increased their levies — CPS by $114 million and the city by $94 million. (The city’s new spending plan for 2023 has no property tax increase, but the new bills just arriving reflect the city’s 2021 budget.)

Here’s what else the treasurer’s analysis says is driving the climbing bills for Chicago taxpayers.

The reassessment
Overall property taxes in Cook County have increased more than $600 million this year, according to a new analysis by the treasurer's office. But not all areas are sharing the tax burden equally.
Overall property taxes in Cook County have increased more than $600 million this year, according to a new analysis by the treasurer's office. But not all areas are sharing the tax burden equally. (Cook County Treasurer)
The county is reassessed on a triennial cycle. This is the first reassessment for Chicago homeowners under Assessor Fritz Kaegi, and the first since the COVID-19 pandemic upended real estate.

While the overall amount levied by all taxing bodies increased, not all homeowners and commercial property owners are slated to pay more. But given that residential assessments after appeals at the Board of Review rose more than commercial ones, more homeowners than not will see an increase in their bills, while more commercial owners than not will see their bills go down, the new study by the treasurer notes.

By EarthDaily Analytics
Tax bills for more than 406,000 residential properties increased, while nearly 318,000 went down. Tax bills for more than 32,000 commercial parcels went up — particularly in Lincoln Park, the Near South Side and Rogers Park — while nearly 37,000 went down, the study found.

The median commercial bill rose by $1,991 to $12,448, an increase of 19%, according to the report.

“The median property tax for a Chicago home now stands at $3,599, an increase of $261. That 7.8% median increase was the highest in Cook County, although a Chicago home’s median tax bill remained one of the lowest in the county,” the report says.

Fast-gentrifying Latino communities on the city’s North and Northwest sides saw some of the highest jumps, the analysis found, while many Black neighborhoods on the South and West sides saw bills drop dramatically. The north lakefront saw taxes rise at a faster clip than anywhere else in the city.

The ‘recapture’ provision
A bill signed by Gov. J.B. Pritzker last year gave local taxing bodies across Illinois the ability to recover refunds they issued to property owners due to property overassessments, shifting the cost onto the rest of taxpayers. Rather than taxing bodies chalking up refunds awarded to taxpayers as a loss, that amount is incorporated in future bills.

Older and newer houses on West Cullerton Street in Chicago's Pilsen neighborhood are shown on Dec. 1. The Lower West Side has one of the highest property tax increases in the city this year, with the median bill growing by 45.8%, according to a new study by the Cook County treasurer's office.
Older and newer houses on West Cullerton Street in Chicago's Pilsen neighborhood are shown on Dec. 1. The Lower West Side has one of the highest property tax increases in the city this year, with the median bill growing by 45.8%, according to a new study by the Cook County treasurer's office. (Erin Hooley / Chicago Tribune)
Refunds are awarded based on appeals to the county assessor or Board of Review, as well as rulings at the state’s Property Tax Appeals Board. For example, if a commercial property was overassessed by $10 million, the other property owners — who had already received their notices and thought they knew what their tax burden was going to be — would have that $10 million collectively added to their tax bills the next year.

The bill was designed to let taxing bodies — like villages and school, park and library districts — recover money they repaid to taxpayers. Such refunds could put multimillion-dollar dents in their operating budgets, since those who fight their bill hardest are often larger commercial properties. But the treasurer says it represents an ongoing “annual burden on taxpayers.”

As a result of the recapture law, tax bills across Cook County rose by an additional $131 million, the treasurer’s analysis said. CPS is slated to recoup $32.3 million, the Metropolitan Water Reclamation District will get $7.5 million and the Chicago Park District will get $3.1 million.

TIF districts
Increases in property taxes on commercial real estate also varied greatly among different areas within Cook County.
Increases in property taxes on commercial real estate also varied greatly among different areas within Cook County. (Cook County Treasurer)
The impact of tax increment financing districts, or TIFs, came into “stark relief” this year, the study found. The city of Chicago has 131 such districts. Tax revenues from increasing property values in those districts do not go to city coffers. Instead, the incremental increases are socked away in each district’s TIF piggy bank. So when commercial properties’ values go up — like Willis Tower or Google’s Chicago offices — that means millions are diverted into TIF districts where revenue is dedicated to projects located in that district.

Willis Tower has the highest tax bill in the county. Of its $50.2 million bill, $8.7 million went into the LaSalle Central TIF piggy bank, according to the report. Taxes on Google’s building at 1000 W. Fulton Market grew to $8.2 million this year, with $1.2 million going to the Kinzie Conservation TIF fund.

All told, the total billed in Chicago TIFs was $1.2 billion, an increase of nearly $141 million, according to the report.

The city does have the power to free up money from TIFs, and often does use “surplus” from flush TIF funds, sending some money back to local taxing districts.

COVID-19 adjustment reversal
In 2020, citing the expected impact of the pandemic, Kaegi adjusted home values downward, leading to a 9.3% drop of residential property values in last year’s bills, according to the treasurer. He also dropped values for some commercial assessments, but by just 4.4%. But housing prices generally rose during the pandemic. That fact is reflected in the Chicago reassessment, and in this year’s bills. The COVID-19 adjustment was essentially wiped out, and homeowners’ assessments rose faster than they would have, had Kaegi not made the adjustment.

A steep correction is “anticipated in the North and Northwest suburbs,” which are currently being reassessed, according to the report. Those new values will be reflected on next year’s bills. The same could happen in 2024 when the south and southwest suburbs are reassessed.

10/28/2022

US home prices could plunge 20% next year as mortgage rates surge.

Rapidly rising mortgage rates sap demand from US housing market.

The housing market will continue to ‘slump’ for the remainder of 2022: Redfin chief economist
Daryl Fairweather, chief economist at Redfin, discusses the current landscape of the housing market as reports reveal that homes are selling for less than their asking price on ‘Varney & Co.’

Home prices are already falling at the fastest rate in decades as mortgage rates march higher, and could tumble another 20% next year, according to a noted Wall Street economist.

Ian Shepherdson, the chief economist at Pantheon Macroeconomics, said in an analyst note published last week that there is "no floor in sight" for declining home sales with mortgage rates approaching 7% for the first time since 2001. He anticipates that home prices will plunge by 15% to 20% next year.

"We expect home sales to keep falling until early next year," Shepherdson wrote in the note. "By that point, sales will have fallen to the incompressible minimum level, where the only people moving home are those with no choice due to job or family circumstances."

Sales of existing homes already tumbled 1.5% in September from the previous month to an annual rate of 4.71 million units, according to data released last week by the National Association of Realtors (NAR). On an annual basis, home sales plunged 23.8% last month.

Painfully high inflation and rising borrowing costs have proven to be a lethal combination for the housing market, forcing potential buyers to pull back on spending.

Many experts — including Shepherdson agree that the housing market is now experiencing a recession that will worsen as the Federal Reserve continues to raise interest rates.

"If you’re planning to move homes and will need a new mortgage, you will face a huge increase in rates," Shepherdson said. "It’s entirely possible that even people who want to trade down will face a bigger monthly payment; that’s a good reason to stay put, thereby constraining supply."

The Federal Reserve is tightening policy at the fastest pace in three decades as it tries to crush runaway inflation. Policymakers have voted to approve five consecutive interest rate increases this year, including three consecutive 75-basis-point hikes in June, July and September.

At the conclusion of their meeting last month, Fed Chairman Jerome Powell signaled that another 125 basis points of rate increases are on the table this year.

The rate hikes have already driven the average rate for a 30-year fixed mortgage rate to 6.94%, according to Freddie Mac — double what they were just one year ago.

With mortgage rates rising, demand for new homes is rapidly drying up, prompting home prices to fall.

10/19/2022

IS IT A GOOD TIME FOR ME TO BUY A HOUSE OR THE TIME TO PAUSE?

This has been the question of several folks who are one way or the other interested in the real estate market since the past few months. Check out the latest housing trends for the previous month if you're unsure whether it is a good time to buy a house or if should you wait until 2023. It’s becoming harder to buy a house as prices are up year over year, and mortgage rates are soaring in 2022. At the same time, consumer prices on everything are also on the rise making it even more difficult to save money to buy a house next year.

In an effort to tamp down inflation, the Federal Reserve is raising interest rates. The Fed hiked interest rates by three-quarters of a percentage point, following a similarly aggressive rate hike in June which was already weighing on housing, business investment, and consumer demand. The Fed has raised interest rates in less than four months which it took three years to do the previous time.

The cumulative effect of these sharp rate increases has cooled the housing market and caused the economy to slow, but has done little to lower inflation. Although Fed doesn't control mortgage rates it has a ripple effect on the mortgage industry. The recent rate hike will correspond with a rise in the prime rate and immediately send financing costs higher for many forms of consumer borrowing. On the flip side, higher interest rates also mean savers will earn more money on their deposits.

Don’t expect much relief in the form of lower rates in the coming months. Therefore, it certainly does not seem to be a good time to buy a house as rates have risen much more rapidly in 2022 than most industry analysts and economists had initially predicted. But when it comes to the possibility of significant savings, looking for the best mortgage offer provides an outstanding return on investment. Because it only takes a little more effort to browse around for the greatest mortgage rate, why not take advantage of it?

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Is it a Good Time to Buy a House or Should I Wait?
As of October 4, 2022, the average rate for the benchmark 30-year fixed mortgage is 6.85 percent (source: Bankrate). It is an increase of 13 basis points from a week ago. At the current average rate, you’ll pay a combined $654.59 in principal and interest for every $100,000 you borrow to buy a house. That’s up $15.93 from what it would have been last week.

The average 15-year fixed mortgage rate is 6.07 percent, up 21 basis points over the last week. At that rate, monthly payments on a 15-year fixed mortgage will be around $600 per $100,000 borrowed to buy a house. The larger monthly payment may be harder to fit into your budget than a 30-year mortgage payment, but it has huge advantages: You'll save several thousand dollars in interest and create equity much faster.

Let's compare the figures between now and eight months ago when the buyers financed their houses with a mortgage. On a $300,000 loan, a 30-year, fixed-rate mortgage at December’s rate of 3.11% would have meant a monthly payment of about $1,282 (Principal & interest).

Loan amount = $300,000
Total interest paid = $161,923
Total cost of loan = $461,923
Today’s rate of 6.85% brings the monthly payment to $1,965 (Principal & interest). That’s an extra $683 a month or $8,196 more a year and $246,398 more over the lifetime of the loan.

Loan amount = $300,000
Total interest paid = $408,321
Total cost of loan = $708,321
The Fannie Mae (FNMA/OTCQB) Economic and Strategic Research (ESR) Group revised downward its forecast for total home sales growth through 2023. They now project 2022 total year existing sales to decline 16.5 percent from 2021, followed by a further decline of 13.3 percent in 2023.

Their forecast for 2022 purchase volumes remains at $1.7 trillion, essentially unchanged from last month. The group now expects purchase volumes to fall about 1.5 percent in 2023 to just under $1.7 trillion, a downward revision of $17 billion from last month’s forecast, driven by downward revisions to their forecast for home sales.

The rise in rates is having the Fed’s desired effect on housing, as house price growth began to slow in June. They expect the slowdown in housing to continue through 2023 as affordability constraints mount for potential homebuyers, and considering, too, that refinance activity has been significantly curtailed by the rise in mortgage rates. The group continues to anticipate a strong deceleration in home price growth going forward due to the lagged effects of higher mortgage rates and the slowing economy weighing on purchase demand.

If the economy suffers a downturn, mortgage interest rates will very probably fall to about 4% or even lower. If it does, this could be a good time to put off buying a home and save some money, especially for first-time buyers. Fannie Mae forecasted at the start of the year that the average 30-year fixed mortgage rate will rise from 3.1% to 3.3% by the end of 2022.

The Mortgage Bankers Association was somewhat more optimistic about mortgage rates, projecting that the average rate will increase to 4% by the end of 2022. It is now evident that neither Fannie Mae's nor the Mortgage Bankers Association's predictions were even somewhat accurate.

The 30-year fixed mortgage rate, which hovered at 3% throughout 2021, is treading close to 7 percent, a steep increase from last year. It has almost doubled since last year. Some experts are forecasting that the 30-year, fixed-mortgage rate will vary from 5% to 7% by the end of 2022. According to Nadia Evangelou, director of Forecasting for the National Association of Realtors, rates may exceed 6 percent. They did momentarily before the Federal Reserve's June announcement of a rate rise, but have subsequently backed off.

The most likely scenario is that the Fed will continue to raise the fed funds rate to combat inflation and will continue to reduce its position in the market for mortgage-backed securities. The Federal Reserve is expected to continue its course of raising short-term interest rates and anticipate an additional 75 basis point hike at its September meeting, though markets are partially pricing in the possibility of a full 100 basis point increase.

As a buyer, you do not want to hear this because higher interest rates make home loans less affordable. Rising rates make homes more expensive for buyers, and, for prospective borrowers, steeper monthly mortgage payments. It will thereby reduce the demand for home purchases. The latest housing stats for August already point to an increasing inventory amidst moderating demand.

The mortgage credit availability again decreased in August as investors reduced their offerings of ARM and non-QM loan programs. With the overall origination volume expected to shrink in 2022, some lenders continue to streamline their operations by dropping certain loan programs to simplify their offerings, according to the Mortgage Bankers Association.

The MCAI fell by 0.5 percent to 108.3 in August. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit. The index was benchmarked to 100 in March 2012. The Conventional MCAI decreased by 1.0 percent, while the Government MCAI remained essentially unchanged. Of the component indices of the Conventional MCAI, the Jumbo MCAI decreased by 0.7 percent, and the Conforming MCAI fell by 1.2 percent.

The competition for housing results in fewer options, higher prices, and faster sales. In a seller's housing market, there are more interested buyers than available homes and that makes it a difficult time to buy a house, especially for first-time buyers. According to the NAR, the national median price for existing homes sold in August was $389,500, up 7.7% from the same month in 2021.

This is the longest streak of year-over-year growth ever recorded, spanning 126 months. However, it was the second month in a row that the median sales price retracted after reaching a record high of $413,800 in June, the usual seasonal trend of prices declining after peaking in the early summer.

Fannie Mae released a nationwide housing survey for August 2022 that reveals only 27 percent of respondents believe it is a good time to buy a house in 2022.

“The share of consumers expecting home prices to go down over the next year increased substantially in August. Accompanying this, HPSI respondents reported a significant decrease in home-selling sentiment,” said Doug Duncan, Fannie Mae Senior Vice President, and Chief Economist.

The Home Purchase Sentiment Index® (HPSI) decreased 0.8 points in August to 62.0, its sixth consecutive monthly decline, as high home prices and elevated mortgage rates continue to weigh on consumer sentiment, particularly home-selling sentiment. Month over month, consumers reported that home-selling conditions have worsened – although that component remains strongly positive on the net. Consumers also reported that homebuying conditions have improved, but 73% continue to report that it’s a “bad time to buy a house in 2022.”

Meanwhile, a greater share reported the expectation that mortgage rates will decline, even though a majority continue to believe that mortgage rates will go up over the next 12 months. Year over year, the full index is down 13.7 points.

Is 2022 a Good Time to Buy a House?
The percentage of respondents who say it is a good time to buy a home increased from 17% to 22%, while the percentage who say it is a bad time to buy decreased from 76% to 73%. As a result, the net share of those who say it is a good time to buy increased 8 percentage points month over month.

Is 2022 a Good Time to Sell a House?
The percentage of respondents who say it is a good time to sell a home decreased from 67% to 59%, while the percentage who say it’s a bad time to sell increased from 27% to 35%. As a result, the net share of those who say it is a good time to sell decreased 16 percentage points month over month.

Home Price & Mortgage Rate Expectations
The percentage of respondents who say home prices will go up in the next 12 months decreased from 39% to 33%, while the percentage who say home prices will go down increased from 30% to 33%. The share who think home prices will stay the same increased from 26% to 28%. As a result, the net share of Americans who say home prices will go up decreased 9 percentage points month over month.

The percentage of respondents who say mortgage rates will go down in the next 12 months increased from 6% to 11%, while the percentage who expect mortgage rates to go up decreased from 67% to 61%. The share who think mortgage rates will stay the same increased from 21% to 25%. As a result, the net share of Americans who say mortgage rates will go down over the next 12 months increased 11 percentage points month over month.

Is It a Good Time to Buy a House or Wait Until 2023?
Source: Fannie Mae
The HPSI is constructed from answers to six of 100 national housing survey questions that solicit consumers’ evaluations of housing market conditions and address topics that are related to their home purchase decisions.

Is it a Good Time to Buy a House for First-Time Buyers?
According to a recent Fannie Mae survey, many consumers are hesitant to buy a home in 2022. About 67% of survey respondents expect mortgage rates to increase, and there are rising concerns about job stability and escalating housing prices. Some homebuyers will find the current market conditions easier, while others will find them more difficult to buy a house. The current upward trend in home prices is likely to continue throughout the year, which could price out some prospective buyers.

However, it is anticipated that prices will rise at a slower rate than they did in 2021. The current lack of entry-level supply and the rapid increase in mortgage rates appear to be negatively impacting potential first-time homebuyers in particular, as evidenced by the larger proportion of younger respondents (aged 18 to 34 years old) who believe it is a bad time to buy a house. The advantage of the historically low mortgage rate environment of the previous year appears to have diminished for first-time homebuyers, and affordability is projected to become an even greater constraint for them in the future.

In August 2022, the first-time buyers were responsible for 29% of sales, consistent with July 2022 and August 2021. According to NAR, the annual share of first-time buyers was 34% in 2021. Individual investors or second-home buyers, who make up many cash sales, purchased 16% of homes in August, up from 14% in July and 15% in August 2021.

In 2022, rising mortgage rates are piling onto record-breaking home prices, locking even more potential buyers out of the red-hot housing market. Historically, rising interest rates cause more prospective buyers to delay purchases, and the recent increase in financing terms has already resulted in a decline in mortgage applications.

The prices are not going down in 2022. The various forecasts from experts show that 2022 will remain a moderate sellers' housing market, and home values may still increase by single-digit percentage points. While affordability concerns continue to grow, low mortgage rates, increased savings, and a strengthening job market all contribute to making homeownership more accessible to a wide number of prospective buyers.

Realtor.com’s September 2022 data shows that the housing market is continuing to moderate. Homes are selling more slowly than they did a year ago, house inventory growth has stalled, and listing price rise is moderating. However, homes are still selling faster than they were before the pandemic, and the price rise remains in double digits. This year, the last week of September was the greatest time to purchase a home, and while sellers are putting their homes on hold, buyers may anticipate less competition and somewhat lower pricing this fall.

In September, newly listed homes declined by 9.8% compared to the same time last year, a lower rate of decline compared to last month’s 13.0% year-over-year decrease, but far shy of levels seen earlier this year. In August, seller sentiment continued to decline. Fannie Mae’s Home Purchase Sentiment Index (HPSI) revealed that the net share of respondents saying now is a good time to sell decreased by 16 percentage points compared to the previous month and by 30 percentage points compared to last year.

Nationally, the inventory of homes actively for sale on a typical day in September increased by 26.9% over the past year. This amounted to 155,000 more homes actively for sale on a typical day in September compared to the previous year. The growth rate of inventory remained stable compared to last month’s growth rate of 26.9%.

In September 2022, the nationwide median listing price for active listings was $427,000, an increase of 13.9 percent year over year.
It was a deceleration from last month’s growth rate of 15.4% and down from a peak growth rate of 18.2% in June.
The share of homes having their price reduced grew from 11.0% last September to 19.5% this year.
In large metros, median listing prices grew by 10.2% compared to last year, on average.
Nationally, the typical home spent 50 days, 7 days more than last year but 18 days less than typical pre-pandemic levels.
The national inventory of active listings increased by 26.9% over last year.
The total inventory of unsold homes, including pending listings, increased by just 0.7% year-over-year due to a decline in pending inventory (-23.7%).
Sellers are less active than last year, as newly listed homes declined by 9.8% on a year-over-year basis.
Housing Markets that saw the largest year-over-year increase in listing prices in September 2022:

Miami, where the median listing price grew by +28.3%
Memphis, where the median listing price grew by +27.3%
Milwaukee, where the median listing price grew by +27%
Housing Markets that saw the greatest increase in their share of price reductions compared to last year:

Phoenix (+32.3 percentage points)
Austin (+27.4 percentage points)
Las Vegas (+20.0 percentage points)

Western metros saw the greatest increase in the share of price reductions (+15.6 percentage points), followed by southern metros (+10.7 percentage points).

Conclusion: The Best Time To Buy A Home Depends On You
Higher interest rates pose a challenge to existing homeowners looking to buy a new home at the same time as selling their current home. Existing homeowners may benefit from lower interest rates than those offered right now because they already have mortgages. Their monthly expenses could rise dramatically as a result of the purchase of a new property.

In other words, if you don't have a specific date in mind for when you want to buy a new property, you may be better off waiting till it does. Every potential buyer's best time to buy a property is different, and the greatest time to buy a house is not the same for everyone. It’s essential to consider your financial situation and understand how buying will impact your bottom line each month.

08/25/2022

FINANCE REAL ESTATE
Where will housing prices end 2022?

New data predicts a 4% drop in 5 months—and homes with these two characteristics will be hardest hit
Numbers from the American Enterprise Institute's Housing Center portend a rocky end to the year for housing prices.

BY SHAWN TULLY

August 23, 2022 7:30 PM EDT

New data gives a peek at where 2022's housing market is heading. MediaProduction via Getty Images

On August 22, the source that arguably features the best residential real estate data in the business American Enterprise Institute’s Housing Center released new numbers for July. The update’s overall theme: America has reached a pivot point where the market’s flipped from record appreciation this spring to substantial real-time declines across a number of the most overheated metros. The key revelation is that from August through the close of 2022, prices on a national level are tracking for the first substantial pullback in any six month period for well over a decade. To get the estimate, and it may shock you, read on.

The AEI’s July report spots three key trends. The first highlights the damage that’s suddenly engulfed the big, super-pricey western markets. For the U.S. as a whole, month over month Home Price Appreciation or HPA has decelerated sharply from an average of 2.1% from January to April, to just 0.2% in June, followed by a slight uptick to 0.5% in July. “The July increase may be seasonal,” says Ed Pinto, Housing Center’s director. “Many of the homes that go to contract in the peak spring selling season close around 45 to 60 days later in July.” It’s important to note that as recently as April, every one of the 60 markets the AEI measures posted an advance over March.