Single-family home price indexes computed by Case-Shiller CoreLogic rose in 185 out of 240 Chicago-area ZIP codes last year, with the biggest gains in the near western suburbs.

Note: Fiserv calculates its indexes by tracking repeat sales of the same properties. It doesn’t have indexes for 85 out of 325 local ZIP codes because it lacks sales data for the ZIP codes. Source: Case-Shiller CoreLogic

Read more:

http://www.chicagobusiness.com/article/20130615/ISSUE01/130609972/are-home-prices-in-your-zip-code-going-up-or-down#ixzz2WVnmZwqL

Downtown is back as the first spec building since 1998 gets under way. McDermott, Will & Emery leased 225,000 square feet at the 41-story 444 W. Lake, which got the green light to start construction. It is a sign of how much the market has improved that the building failed to get underwritten with 640,000 square feet of leases as recently as 2009. Clearly investors have faith in the strength of Chicago as a major business and cultural capital.

The downtown office market is still being driven by the resurgent tech and professional services sectors, including law firms. According to Transwestern, 23,000 of the 29,000 jobs created in metro Chicago in 2012 were in the professional services. Although the reported vacancy rate remains relatively flat at 14.9 percent in the fourth quarter, according to statistics from CBRE Inc., the numbers are actually better if you consider that they don’t include Google Inc.’s 572,000-square-foot lease at Merchandise Mart for its Motorola Mobility unit that is relocating from Libertyville.

The numbers do include the Sara Lee deal at 400 S.Jefferson, a 230,000-square-foot building in the West Loop. CBRE is reporting net absorption of just 69,935 square feet for last year (compare that to the pre-2007 market when it was routinely in the millions of square feet), mostly because of all the old-line companies reducing their footprint to lower cost. For example, Citadel will only renew 222,000 square feet when it’s existing 325,000-square-foot lease expires in 2013.

The big stories? The continuing migration downtown from the suburbs as companies chase the highly skilled knowledge workers who want to rent in places like River North and the West Loop. Proof of this trend continuing is the fact that there are 1,500 apartments planned for River North alone – $500 million of new construction that would double the housing supply in that prized neighborhood. Another 192 units are planned in the West Loop, one of the country’s hottest residential and restaurant districts. It’s not surprising to see so much new multifamily construction when you consider that occupancy rates are 95 percent.

A number of headquarters relocated downtown in the fourth quarter including GE Transportation, which will join GE Capital at 500 W. Monroe St. with a 54,000-square-foot lease; The Marketing Store Worldwide, which signed a 31,000-square-foot lease at 55 W. Monroe St., increasing their CBD presence; and Bike gear maker SRAM International Corp., which moved its HQ to 70,000 square feet, in the former Fulton Market Cold Storage warehouse, which will be converted to offices by 2014. The largest new signing in the fourth quarter was a 136,678-square-foot deal by accounting firm Grant Thornton LLP at the former Chicago Title & Trust Co. building at 161 N. Clark St, moving from 175 W. Jackson Blvd.  Capital One Financial Corp., meanwhile, finalized a deal to sublease 65,484 square feet at 77 W. Wacker Drive from United Airlines.

On the investment side, the market was flooded with capital chasing yield at a time when capital is cheap and T-bills are at historic lows. Fifty transactions closed in the city worth $2.2 billion with half of that closing in the fourth quarter. That’s an average cap rate of 6 ½ percent. Part of the late rush to sell was motivated by the jump in capital gains passed by Congress as part of the fiscal cliff deal. 

Read more at: http://www.rejournals.com/2013/03/22/downtown-office-making-a-comeback/

While the national retail property sales transaction volume only hit $8.2-billion in the first quarter of 2013 (down nearly 29% over the same time period last year), the retail pipeline remains robust and the sector is definitely the “wild card” in commercial real estate. 

Regional malls are among the product types that may throw investors a curve ball as we’re seeing a greater number of bids and shorter marketing and closing timeframes. For example, a recent grocery-anchored property sale in Atlanta begat pricing well above expectations, driven by dozens of bids and ultimately, a bidding war amongst three very well-capitalized bidders. 

However, differentiation is key. According to JLL’s retail investment sales experts, managing directors Kris Cooper and Margaret Caldwell, malls with high sales per square foot will sell quickly, while B and C malls will be more challenging to market, given there is currently plenty of that product type on the market.  Cap rates for those B malls range from 7% to low 8%, depending on sales per square foot and other factors, while trophy malls could garner cap rates in the low 4% range, and could even see further compression in the months to come. In the meantime, there is essentially no compression in cap rates for class C and D malls, as investors are questioning the long-term viability of these investments.

For more visit: globest.com

After seven long years of falling prices in the Chicago area—with median house values down a gut-wrenching 38 percent at the end of 2012, according to real-estate research firm Zillow—“we think Chicago has hit bottom,” says the company’s chief economist, Stan Humphries.

In fact, late last year Zillow named Chicago the best market for homebuyers among 142 metro areas. It weighed three factors: the median number of days a home spent on the market (112, in metro Chicago’s case); the percentage of homes that had their list price cut while still for sale (41 percent); and the number of homes that sold for less than their asking price (almost all of them). What’s more, with rents on the rise (up 5.3 percent last year by Zillow’s calculations), it will cost you only about half as much to own a home locally as to rent a comparable one, according to Trulia, another real-estate research firm.

The message is clear: If you’ve been waiting to invest your money in a first condo, a larger house, or a second home, “go shopping now,” advises Humphries.

How soon must you act to get the best deals? Well, nobody foresees prices skyrocketing this year in Chicago the way they are expected to in Riverside, California, and other big markets. Among other reasons, that’s because Chicago has been unusually slow to work through its pipeline of foreclosed properties and because the city’s and state’s fiscal problems have made some people leery of investing in real estate here.

For the Chicago area, the consensus 2013 home price forecast is flat to up slightly. Zillow predicts home values will neither rise nor fall. Financial services company Fiserv, using data from Case-Shiller (the gold standard in house-price number crunching), forecasts an uptick of 0.8 percent by the end of the second quarter of 2013 and another rise of 5 percent by the second quarter of 2014.

Two factors that Humphries sees driving the market higher: lower metro-area unemployment (from December 2011 to December 2012, it fell from 9.3 percent to 8.6 percent) and more investors snapping up properties to rent out, which would shrink local housing inventory.

Bottom line: This summer—when the largest number of properties typically hits the market—looks like the optimal time to buy. And if you want to snag a home that will increase substantially in value, you need to think like an investor.

Smart long-term investors don’t just grab stocks whose prices have plunged. Instead, they look for stocks with strong fundamentals—good earnings, solid growth prospects—that have also dipped low enough to be great buys.

Accordingly, look on a much-larger-than-average fall in median home prices with curiosity but caution. Of the 273 towns and neighborhoods in the charts, 106 saw drops of more than 45 percent from the peak; many of those are seriously troubled. And communities that have regained most or all of their precrash value, such as Kenwood, may be great places to live, but homes there probably aren’t great bargains.

To find the best-value neighborhoods and suburbs for first-time buyers, move-up buyers, and downsizers, I combed through places in Chicago’s six-county region where the median home price has fallen at least 35 percent from the peak. (I relaxed those restrictions for pieds-à-terre.) I then narrowed down the list by focusing on qualities likely to enhance price appreciation, including good access to transportation, shopping, and dining. The result? The 21 communities described in the pages below.

Best buys for first time buyers

Best buys for move up buyers

Best buys for those looking for a Pied-a-Terre in Downtown Chicago 

Best buys for those looking to downsize

Chicago Home Price Trends

This month in the real estate market, there are lots of quick hand-offs, players guarding their positions and other basketball-ish stuff going on, but in this version of March Madness, what we’re most interested in seeing is a good solid rebound. And so far, that seems to be what we’re getting.

What we got last year was more like March Badness; that month, according to the Case-Shiller Index, Chicago’s home prices hit their lowest point during the housing bust. Prices rolled back to approximately where they had been in April 2000—which meant local homes hadn’t gained any value in 11 years and 11 months. Prices—and homeowners’ sense of financial health—spent much of the next year trying to climb out of that pit.

The pit is a big part of the reason that, as I wrote last week, only a little more than a third of the Chicago neighborhoods and suburbs we track for the annual home-value charts that are in the magazine’s April issue saw home prices rise during the course of 2012. March’s badness was difficult to overcome.

But there are signs, both on the charts (whose data ends with Dec. 31, 2012) and in more contemporary reports on what’s been happening so far this year, that recovery is on a firm footing—and that March 2013 may break the string of big price dips that have happened in February, March or April every year since the market first started heading down in 2007.

One good sign is the number of sales: In the six-county region that we track, 2012 saw 19.2% more sales than 2011. Sales were up 75% in Forest Park, one of the towns we suggested in the magazine story as a good spot for first-time buyers to go househunting. Another of those picks, Des Plaines, saw a 29% increase.

The trend seems to have continued after the close of our charts: Redfin reported this week that February 2013 sales volume in Chicago was 23.7% over February 2012’s figure (although down from January). That was the third biggest volume increase among the top 20 cities Redfin covers.

An increase in the number of homes sold is important because it means more buyers and sellers are able to change their positions—from a too-small condo to a family-sized house, for instance—and at the same time it pumps money through the economy as both sides spend on movers, new bathroom rugs, and whatever else the move precipitates.

But the even more auspicious data in our charts and in later reports is about how fast houses are selling. While some sellers still have homes lingering on the market—R. Kelly’s lender was the only bidder Monday when auctioning his former Olympia Fields home almost three years after it first went on the market—many other homes are barely touching down on the market before being sold.

That Redfin report above showed that 12.2% of homes sold in Chicago in February had gone in 14 days or less. That’s well below the national average of 34%, but great news in a market where just two and a half years ago, we saw home sales slowing down to a turtle’s pace.

On the charts, we see the speed-up starting in 2012: In most locations, homes sold faster in 2012 than during the prior year, although in very few are they selling as fast as in 2006.

The acceleration is giving some but not all neighborhoods whiplash. In Kenwood, homes sold 25% faster in 2012 than they had in 2006, while next door in Hyde Park, the pace is eight percent slower.

On the North Shore, homes sold significantly faster in Wilmette than in any other town in 2012. At 103 days, Wilmette sold 22% faster than second-place Evanston (132 days) and 59% faster than last-place Kenilworth (251 days).

The faster houses sell, the more likely they are to be bid up in price by buyers, and for the houses that follow them onto the market to have slightly higher prices. Which is all part of the step-by-step climb out of the hole, a process that this March appears to be continuing.

But one thing has me worried: this infernal weather. Cold, cold March 2013 hasn’t been anything likebalmy March 2012, when there were eight days that the temperature topped 80 degrees. That felt good, and it might have made people feel optimistic about buying a house, where this month’s weather has made even the winter-hardiest of us kind of cranky. Data for home sales in March won’t be out for another several weeks, but fingers crossed that the good prices and low interest rates out-pulled the lousy weather in homebuyers’ heads.

For more visit: www.chicagomag.com

In 2013, there were 1,485 sales in January in the city compared to 1,123 in January 2012, according to the report released Thursday by the Illinois Association of Realtors.

The city condo market jumped with a sales increase of 29.7 percent to 829 units sold in January 2013, the report said.

The median price of a home in the city of Chicago in January 2013 was $159,000. That’s up 7.4 percent from January 2012.

The median price of a condo rose to $202,500, up 8.7 percent from January of last year, said Morris, the operating principal of Keller Williams Realty.

“The condo market’s slow revival shows a steady but measured improvement that we will continue to watch as an indicator for the greater health of the city’s housing marketplace in 2013,” he said.

In the nine-county Chicago area home sales in January 2013, 6,244 homes sold, up 36.8 percent from January 2012 sales of 4,564 homes.

The median price in January 2013 was $141,000 in the Chicago area, up 0.7 percent from $140,000 in January 2012, the Realtor report said.

Read more: http://www.dnainfo.com/chicago/20130221/chicago-citywide/chicago-real-estate-sales-prices-up#ixzz2LevZijPp

The retail vacancy rate in the Chicago area was 8.7 percent in the fourth quarter, unchanged from the third quarter, according to Los Angeles-based commercial real estate firm CBRE Inc. Although down from 9.5 percent one year ago, the fourth quarter marked the first time in 10 quarters that the vacancy rate hasn’t shown a quarter-over-quarter decrease, CBRE data show.

As 2013 begins to unfold, the question is whether last quarter’s sluggish numbers are a sign that the market is softening, signaling tougher times ahead for retail landlords.

A Chapter 11 bankruptcy filing by a major retailer, which typically leads to an onslaught of store closings, would be big blow to the local real estate market.

Many experts are closely watching Best Buy Co., which last year closed six stores in the Chicago area. The Richfield, Minn.-based electronics retailer has struggled amid competition from general merchandise retailers such as Wal-Mart Stores Inc. and Target Corp. and Internet sites.

This month, Best Buy said it will close a store near the Old Orchard Mall in Skokie. In 2012, Best Buy had 58 stores in Illinois.

Instead of mass closings, many retailers have been pruning their real estate holdings, shedding underperforming locations.

“Right now, we’ve been able to outpace the closing up of unprofitable stores,” said Joseph Parrott, senior vice president of retail services in the Bannockburn office of CBRE.

While the vacancy rate was flat last quarter, it’s still the lowest since the second quarter of 2008, just prior to explosion of the financial crisis.

Average rents slipped to $16.65 per square foot in the fourth quarter, from $16.77 in the third. Rental rates, which stood at $16.34 per square foot a year ago, had been steadily climbing, showing increases for each of the past five quarters before the most recent step back.

National retailers are “very selective” but are showing more interest in expanding than three years ago, when demand for space was virtually nonexistent, according to developer Michael Jaffe, president of Chicago-based Jaffe Cos., who retains a stake in Arboretum at South Barrington after a loan and financial restructuring.

“However, it’s more than just green shoots,” said Mr. Jaffe, whose firm recently leased a 22,000-square-foot space at the 480,000-square-foot Arboretum to HomeGoods, part of Framingham, Mass.-based TJX Cos.

Consumers are finding reasons to spend again. Retail and food service sales in December were $415.7 billion across the country, a 4.7 percent increase over last year, according to a recent report released from the U.S. Census Bureau. For all of 2012, spending was up 5.2 percent vs. 2011, the census bureau said.

Yet improvements in the retail market are still fragile.

Tenants like Ross Dress for Less, Big Lots and Wal-Mart are active in the market. But such firms aren’t growing fast enough to cancel out the loss of a major chain store, Mr. Parrott said.

Another factor that could drag on the market in 2013 is if developers get the green light to build new retail space, which would increase the supply and compete with existing empty spaces, Mr. Parrot said.

While the retail real estate market for the entire Chicago area stalled, retailers seemingly continue to be attracted to the city, drawn by dense population and mix of affluent and middle-class customers.

The vacancy rate for the North Side of Chicago, including downtown, was 5.7 percent in the fourth quarter, down from 6.3 percent in the third quarter, according to CBRE.

“When we isolate the downtown market, you still see tremendously low vacancy numbers and you see rental rates continue to climb,” said Todd Siegel, a vice president in the Chicago office of CBRE who specializes in urban leasing.

Among the other leases announced in the fourth quarter:

• Chicago-based developer McCaffery Interests Inc. signed nine leases covering about 86,000 square feet at the Roosevelt Collection, near Roosevelt Road and Clark Street in the South Loop, including deals with H&M and Republic of Couture.

• Italian food emporium Eataly leased more than60,000 square feet in the former ESPN Zone location at 43 E. Ohio St. in the Shops at North Bridge.

• Parisian fashion retailer Yves Saint Laurent leased2,375 square feet in the Waldorf Astoria Hotel at Rush and Walton streets in the Gold Coast.

• Bootseller Frye Co., a unit of unit of Hong Kong-based Li & Fung Ltd., leased 6,100 square feet in a yet-to-be-built building at 1007 N. Rush St.

• Pleasanton, Calif.-based Ross Stores Inc. is opening a Ross Dress for Less store in the Woodfield Commons East shopping plaza in Schaumburg.

Read more:

http://www.chicagorealestatedaily.com/article/20130121/CRED02/130129987/retail-vacancy-improvement-halts-in-fourth-quarter#ixzz2Jb00VHIy

Five projects worth roughly $500 million, including plans by Magellan Development Group LLC and the Kennedy family, would add nearly 1,500 units to the upscale area. The bulging pipeline comes on top of nearly 900 units scheduled to be completed this year, including a 450-unit tower near the East Bank Club by Chicago-based developer Habitat Co.

Combined, the projects would almost double the supply of River North apartments, which is already at an all-time high of about 2,700 units.

While not all of the proposals are likely to get financing, the risks are rising that a flood of rental units will hit the market in two to three years, when a stronger economy encourages more people to own rather than rent.

“Real estate is always over-shooting and under-shooting the market,” says veteran developer David “Buzz” Ruttenberg, founder of Chicago-based Belgravia Group Ltd. “It’s a little bit, in the short term, like musical chairs—there’s not always enough to go around.”

Developers began plotting apartment projects as the condominium market started to collapse in 2007. Now, they’re pushing forward with another wave of rental buildings as the pendulum swings back toward the condo market, which is strengthening. The building boom is being fueled by rising rents and occupancy rates in the center of the city.

Effective rents, which factor in the value of concessions, in the top apartment buildings in the downtown market soared to $2.58 per square foot in the third quarter, the highest rate ever, according to a report from Appraisal Research Counselors, a Chicago consultancy. Occupancies hit 96 percent in the second quarter, the highest since late 2006. Fallout from the foreclosure crisis has fueled a shift away from condos, with downtown residents preferring the financial flexibility and reduced maintenance responsibilities of apartments, developers say.

River North’s 24/7 environment and location near the North Michigan Avenue shopping district and Loop office towers make the area attractive to residents. Rents are $2.77 per square foot, the highest in the market, Appraisal Research says.

On Wolf Point, a venture that includes the Kennedys and developer Hines Interests L.P., has been working since May to resolve neighborhood opposition to plans for a $1 billion mixed-use development that would include an apartment tower to be developed by Chicago-based Magellan.

 “We think the demand is there, and the caliber of our site helps us to stand out versus the competition,” says James Walsh, managing director at Houston-based Hines.

Less than a mile north of Wolf Point, Magellan is planning a 38-story apartment tower on the site of the Gino’s East restaurant at Wells and Ontario streets, which would be torn down.

“When you have a great site with unique attributes, you’re protected as long as the economy and market is good,” says David Carlins, Magellan’s president.

Even he acknowledges some wariness about the crowded field.

“We are somewhat nervous about what the potential pipeline could be,” he says.

Meanwhile, developer Fred Latsko is moving forward on plans to build a 188-unit building on Illinois Street, just east of Gene & Georgetti restaurant. Vancouver, British Columbia-based real estate firm Onni Group of Cos. is planning two 200-unit developments in River North, including one on the site of the Clark & Barlow hardware store on Grand Avenue.

To attract tenants, developers in River North will have to compete with more than 1,800 units under construction in nearby areas, such as Streeterville and downtown.

To prevent a glut, potential lenders and investment partners will have to carefully scrutinize each project.

“They are going to want to know how this deal succeeds relative to everything else that is going on in the market,” says Ronald DeVries, a vice president at Appraisal Research.

Read more: http://www.chicagobusiness.com/article/20130112/ISSUE01/301129978/developers-stampede-river-north-with-apartment-projects#ixzz2I4tINxzk

U.S. home resales fell in September as the stock of properties on the market fell, a reminder that America’s housing sector is a long way from a full recovery despite recent signs of improvement.

The National Association of Realtors said on Friday that existing home sales dropped 1.7 percent last month to a seasonally adjusted annual rate of 4.75 million units.

But Illinois bucked the trend, showing a 15.9 percent increase in September from a year earlier, according to the Illinois Association of Realtors.

The strong sales report was coupled with data showing the median price of a home in the state rose 2.2 percent.

Statewide home sales (including single-family homes and condominiums) in September 2012 totaled 10,689, up from 9,220 in September 2011, and the 14th straight month of increases.

The statewide median price in September was $139,000, up 2.2 percent from $136,000 in September 2011. The median price in Illinois is up 13.6 percent since January. The median is a typical market price where half the homes sold for more and half sold for less.

In the nine-county Chicago Primary Metropolitan Statistical Area, home sales rose a more dramatic 24 percent to 7,484 in September from 6,035 a year earlier. The median price in September 2012 was $160,000 in the Chicago area, unchanged from September 2011. The median price of a home in the Chicago area in September was $20,000 above January 2012’s median price of $140,000.

“Given the uncertainties in the economy, with the forthcoming election contributing significantly, the housing market has performed well in the last quarter,” Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory at the University of Illinois, said in a statement. “While month-over-month sales were down in September, the year-over-year sales were up and prices continued their modest recovery.”

Nationwide, the median price for a home resale was $183,900 in September, up 11.3 percent from a year earlier as fewer people sold their homes under distressed conditions compared to a year earlier. Distressed sales include foreclosures.

The nation’s inventory of homes — those for sale on the market — fell 3.3 percent during the month to 2.32 million.

At the current pace of sales, inventories would be exhausted in 5.9 months, the lowest rate since March 2006, the NAR said.

Lawrence Yun, an economist at the NAR, said the low level of inventories was partially due to a lack of new homes. The rate of groundbreaking on new homes rose sharply in September but remained about 60 percent below its 2006 peak.

The price increase last month was measured against September 2011, and since then distressed sales have fallen to 24 percent of total sales from 30 percent.

Still, the share of distressed sales, which also include those w h ere the sales price was below the amount owed on the home, increased in September of this year from 22 percent in August.