Chicago Real Estate and the Olympics...a match made in heaven?

Since Chicago was a finalist for getting the U.S. Olympic bid I've talked to many buyers who suddenly have a renewed interest in the South Loop and other neighborhoods on the south side of the city. Or my favorite..."I was talking to my friend and they said I should look in the South Loop because Chicago might get the Olympics." Hey guys....we just got the bid and still have 2 years to see if we actually have the good or bad fortune, depending on which side of the fence you're on, of hosting the Olympics. But if and when Chicago does get the Olympics, not only will it make a profound impact on the city as a whole and the south side in particular, but it's bound to also have an impact on real estate. This impact will certainly be felt potentially as individuals buy property in the area, but the largest impact could be created by the Olympic Village that will be built to house the athletes. The proposed plan for the Village would create somewhere in the ballpark of 5000 units that post-Olympics fervor would most likely be converted into market rate and affordable housing. It would be quite the project and some developers are quite excited about its possibilities. The creation a new "neighborhood" is too much for some developers to pass up, while others are a little sceptical. While no one developer would be taking on the project alone, I think its still somewhat daunting for most....the prospect of selling 5000 units that are part of a single, though multi-faceted project. For a little added perspective, that's nearly 25% of all the condos that were sold citywide in 2006. The whole idea and what it would take for all of this to come together is not for the faint of heart that's for sure.

One can only begin to image how it would change the real estate landscape in the near South Side and for the very near future there will be many more questions then answers. When Barcelona hosted the Olympics in 1992 they did many of the same things that Chicago is planning and turned into a once "blighted" area (not my words as I've never been to Barcelona, but that of another author) into a thriving and vibrant community. If that was to happen purchasing in the "Village" could be a great all around option for homeowners and investors alike. Anything is better then the truck parking lot that currently exists on the site. On the downside, if all that is hoped for doesn't happen, will resale values tank? Will these condos sit on the market like white elephants?

I think Chicago has an amazing future, real estate and otherwise. I'd love to see the Olympics come to Chicago in 2016 and see the "Village" thrive. I don't have a magic wand or crystal ball (though sometimes I wish I did), but I'm just betting there are a lot of people out there who would like to own their own piece of great Chicago history, and a condo in the "Village" might be that piece....time will only tell.

For full details on all the Olympic happenings check out Chicago 2016.


Photo courtesy of Chicago 2016

Buyers who go it alone...the flipside of FSBO

As realtors, we spend a lot of time talking about for sale by owners or FSBOs and you can't pick up a copy of a real estate publication without it talking about FSBOs. But sellers are not the only ones that choose to work on their own, there are plenty of buyers out there that choose to purchase a home without an agent. And of course there is an acronym for them as well, BUBBAs (buyers unrepresented by a buyers agent). Yep, I'm totally serious and it really makes you wonder who comes up with this stuff. Last year 23% of buyers did not use a real estate professional to make their purchase. Of that 23%, 13% purchased directly from a developer or developer's agent, 9% purchased directly from the seller, and that 1% that was up for a real challenge purchased a foreclosure or trustee sale. While those numbers are not huge, seeing that made me wonder what would motivate someone to purchase a property without an agent.

With the wide availability of all sorts of real estate information on the web, from listings to how-to guides, I can see why people would try to navigate a purchase themselves. While that didn't answer the why in my head, it was answered for me this weekend when I was out with a first-time buyer. They loved the properties I showed them and wanted to continue working with me. Then here came the question, "how much do you ask for commission and what kind of agreement do we need to sign." Despite the vast amount of information out there, these were two basic items that are clearly misunderstood. As a buyer, you do not pay your buyers agent a commission, that is taken care of for you courtesy of the seller. As far as a buyer agreement goes, I stand with my broker on this one, I don't have my client's sign them. Period. My relationship with my clients are built on mutual trust. Call me idealistic, but if my client's don't trust that I am doing the best possible job in their interest then the agreement is meaningless anyway.

Another point that comes to mind is the potential dollar signs that seem to spring into people's heads. The "if I don't have an agent then the seller might give me a better deal because they don't have to pay a commission to the buyers agent." This scenario gets a little trickier because the agreement on commission is between seller and the listing agent and both would need to agree to a reduction in commission. And whose to say that the seller is willing to give up their potential savings to a complete stranger.

That's not it...we realtors make it look so easy, sign a couple documents and you're all done right? While sometimes transactions do go very smoothly, others seemed destined to hit every bump in the road. Let's back up a minute though, before you ever get to signing contracts, you need to determine what to offer for the property. You offer too much, you get a quick acceptance and seller willing to give you a break because they're getting what they want and then some, or you offer too low, the seller is insulted and won't even counter. It's easy to say that you take x% off the price, but even a blanket statement like that can be inaccurate depending on the neighborhood. Market time and motivation are only some of the factors that come into play when making an offer.

Everyone is entitled to do their own thing, and I respect that. One of the things I always ask a buyer or selling thinking of going it alone is, "how much is your time worth?" Who isn't busy these days? We all have our jobs and other responsibilities that we need to meet. Do you want to spend your free time going to open house after open house not really knowing if that particular property really meets your needs or trying to hammer out difficulties that arise? In the beginning it's always a lot of fun, but after a while it's burn out time. Remember that "weekend" project that turned into weekends. Yeah, it's kind of like that. Study after study has shown that we have less and less free time compared to previous generations, so my thought it why not make the most of it.

The resources available on the web for buyers is astounding and I think it will continue to be a great resource for buyers and sellers alike. And if you start hearing the term BUBBA, don't blame me, it wasn't my idea.

Recent Headlines

House prices are heating, cooling, freezing, holding - (chicagotribune.com)
As much as the media would like to portray imminent doom of the housing market as a nationwide event, Ken Harvey does a great job bringing reality into the local real estate picture. Some markets have double digit appreciation, while others have the dreaded depreciation, while others like Chicago have a modest & positive 5.2% appreciation

It's all about the pricing for those seeking a timely sale - (chicagotribune.com)
In today's market, and in any market for that matter, pricing correctly will always be key to selling a home, as I've mentioned in previous posts. The last thing any seller wants to have is their property sitting on the market day after day without any interest. This article, in a quick snapshot, touches on many of the same things I discuss with my clients before taking the listing.

Fresh start at Cabrini-Green - (suntimes.com)
To be fair they really should say the former Cabrini Green. The few buildings that are left are coming down quickly, dinosaurs of another time, another hope. It will be interesting to see what will become the new face of what was Cabrini Green and if the mixed-income project will continue to bear the burden of the past.

J. Hancock Center gets no love - (chicagoist.com)
It seems not only do consumers love new construction, but so do businesses, at least that's my speculation since I haven't done any scientific studies. After 9/11 businesses vacated "high-risk" buildings like the Sears Tower and John Hancock, but within a few years the Sears Tower at least was again filling those vacant offices. With the availability of new construction in the Loop, and businesses like IBM abandoning their flagship building, it seems that the John Hancock has also fell victim to this trend as well.

Picture from Tewksbury Borough Council

Bye, bye Starbucks?

Here's yet another great story on controlling the destiny of your neighborhood. Andersonville, a great neighborhood on the north side of the city, is considering adopting an ordinance that would effectively ban "formula business" like Starbucks and Einstein bagels. The City Council is currently drafting the ordinance which would allow qualifying neighborhoods to ban these businesses in their historic districts. While I understand that having Starbucks on every corner is a bit much an outright ban of these kinds of business was quite surprising. If you've ever driven through Andersonville, it has a quaint, eclectic feel, and proponents of this ordinance want to make sure it doesn't lose that feel. Who can blame them?

The face of Chicago neighborhoods seems to almost be changing daily. While this new ordinance will most likely not be before the City Council for a few months, it will be interesting to see the direction is ultimately takes. Will it be a full ban or will it allow for varying regulations? What are your thoughts? Should the City Council see this measure through?

Andersonville may put reins on retail chains

The New Behemoths

You might have seen the article in the Chicago Tribune Magazine this weekend regarding the enormous new homes that some of Chicago's wealthiest families are building in Lincoln Park on Burling Street. And enormous is putting it lightly. They range in size to a relatively modest 3 lots to an expansive 7 lots. It's causing quite the controversy among the neighborhood and even several local architects. Critics of these behemonths say that they are not consistent with the look or scale of the neighborhood. And they don't stop there. Even many of the new single lot homes are criticized for the lack of style including massive columns above a sunken garage and fake flickering gaslights. Many of these houses are also built lot line to lot line, living little room for green space, which in it's own right is a tragedy. Not all that long ago in the East Village, Wicker Park, and Bucktown neighborhoods, developers are no longer permitted to build sunken patios in the front of their buildings because of concerns over the loss of green space.

Tearing down the old to build the new is not something that is new to Chicago, but in certain neighborhoods it certainly has taken on a new fervor. Bigger and bigger seems to be the trend, but is bigger always better? I don't think so, but I'm not building a 20,000 sq foot home either. Part of it is for me, what would I do with all that space? I would love a huge master suite with a closet of equal size, but the rest of the house would be just be a dust collector! This trend has been playing out in the suburbs for a few years now, but it seems some form of that same trend is starting to take hold in the city, for good or bad. I guess only time will tell.

What are your thoughts? Should architects and developers be required to consider the neighborhood? Should there be a limit on how many lots can be combined by one person or a green space requirement?

Photos from Bill Hogan, Chicago Tribune