Home Town Words

Chicago RE reporting is very propagandized.

In the height of the bubble, there were many many stories about how great it is here. The Trib and Suntimes RE sections were exploding with get rich stories and hot neighborhoods. Now the sections are thinned out. On the cover is an expose on the newest energy efficient light bulb that will save you 3 cents a month. Like that will save you from your lair-loan ARM explosion! But inside are still allot of the same over-priced houses and condos that have not sold in a year.

NO IS TALKING ABOUT THE BUST THAT IS OCCURRING ALL AROUND US!

No one but this guy. But I have to read about it in a New York publication.

For shame.

Spending May Take a Hit as U.S. Home Prices Decline (Update2)

By Bob Willis

April 27 (Bloomberg) -- Carol Francis says her customers are less likely to make big furniture purchases these days than they were at the height of the housing boom two years ago.

``The housing market right now is affecting everybody's spending,'' said Francis, a design consultant at Thomasville Home Furnishings in Woodbridge, Virginia, 25 miles south of Washington. Before, ``I had people who would buy two and three bedrooms of furniture. Now many come in and just buy one piece at a time.''

With home prices in danger of falling this year for the first time in at least four decades, Americans are turning wary about borrowing against their houses to pay for vacations, education or remodeling projects. In a reversal of the ``wealth effect,'' people who once viewed soaring home values as a rationalization for higher spending appear to be pulling back.

``We're in a housing recession; it's not over and it's going to spread to other parts of the economy, mainly consumer spending,'' said Paul Kasriel, director of economic research at Northern Trust Securities in Chicago. ``House prices are going to continue to fall, and that's going to play havoc with consumers because it means the home ATM is now draining, it's no longer filling.''

VERY interesting.....

It seems that Illinois Senator and Democratic Presidential candidate Barak Obama has a problem. Like many other Chicago area Democrats he is buddy-buddy with Antoin 'Tony' Rezko. Rezko's slumlord status may hinder Obama's rep as a Man of The People.

But there is more.

Here, is a detailed map of Rezko's properties. I find it VERY coincidental that Rezko has all these properties around the area of Washington Park! As any astute Chicago resident would know, Washington Park is planned to be one of the corner stones of Chicago's 2016 Olympic bid!

Oh what a tangled web we weave....

Don't rely on the City

City inspects for safety only, not quality

This really should not surprise you. But, in case you did not know.

Beware home buyers: Illinois does not require developers to be licensed, and city inspectors are not assessing the construction quality of the residence. The inspectors are responsible only for citing public-safety hazards such as an insufficient number of fire escapes.

"In Illinois, you have 'Wall Street' developers who drive cars and talk on phones and hire subcontractors. They don't build anything," said Nick Gromicko, founder of the National Association of Certified Home Inspectors, based in Boulder, Colo.

"Most states have very minimal or no licensing of developers and contractors," he said.

...

City inspectors, or any other government inspector, will check only for safety issues on new construction.

"A leaking window is something [government inspectors] wouldn't even catch," Gromicko said.<

Scales said city building inspectors review basic life-safety issues such as proper ventilation and lighting, and properly installed electrical and plumbing systems.

"They're not able to measure the quality of construction," Scales said.

The developer is responsible for correcting any problems.

It's best to watch the construction in person throughout its many phases.

Finally, Some Recognition!

Condo Market Shakes Out

from CNBC.COM

By Tara Siegel Bernard News Editor | 13 Apr 2007 | 07:26

It's a great time to look for a condo -- but it's likely to get better in the months ahead.

...

Builders won’t be the only ones looking to sell. Speculators who rushed in and bought condos by the handful in hopes of flipping for a hefty profit later on will also be looking for buyers, as will many of the lenders themselves. Foreclosures are on the rise because many individuals bought homes when credit came easy, often with enticingly low introductory interest rates or little money down.

“The poster children for excess construction generally reside on the coasts in markets where home price appreciation have boomed,” said Suzanne Mulvee, senior real estate economist with Property & Portfolio Research, a Boston-based real estate research firm, which expects further price declines throughout 2007. “That includes Florida - especially Tampa, Miami and Orlando - Chicago, Las Vegas, Palm Beach and San Diego.”

Finally some RE brainiac admits that Chicago is running with the big boys...to the end of the cliff. Break out the champagne!

Say NO to the Sub-prime Bail Out!

Schumer calls for subprime bailout

New York Democrat wants funds to help subprime borrowers.
April 11 2007: 3:35 PM EDT


NEW YORK (Reuters) -- The federal government should offer troubled borrowers hundreds of millions of dollars to bail them out of subprime mortgage loans, several leading Democratic lawmakers said on Wednesday.

"The federal government can send in an infusion of [money] to prevent foreclosure," said Charles Schumer, a New York Democrat.

The cash infusion is needed right away and should go to both help fund community groups aiding troubled borrowers and to directly fund bailouts, Schumer said.

In the beginning of 2006, I almost bought an over-priced townhome. However, I did a budget and the remainder of my dollars would have been too thin to do anything else but sit in the townhome. I could have BOUGHT the place, but I could not have AFFORDED it. So I begrudgingly passed on it. I was sad and every time I drive pass the place I shake my head thinking about what could have been. Soon after I learned that new construction is taxed differently than pre-existing homes. This difference would have sunk me. Now there are 3 units for re-sale asking 50 grand more than the price I passed on. They are just rotting away.

There are many sites and blogs online that detail the problems that a bail out would cause. I will not get into those details here. My opinion is very straight-forward: I used my brain and did not get caught in the trap. Therefore, I will say that certain people should not be bailed out by MY TAX MONEY. Those people are:

* Anyone that LIED about their income or employment on a home loan application.
* Anyone that GAMBLED with the ARM because they wanted to 'Flip that House'.
* Anyone that was too DUMB to realize that you can't afford a $500,000 house on 50k income.

Those people SHOULD NOT GET BAILED OUT. Tough bananas! The Market needs to take them over its knee and give them a royal spanking. Then send them on their way.

Below are links to elected officials in the area. If you also believe that these people should not get a free pass, click on these links. Inform your rep's that you also do not want liars, gamblers and degenerates to be bailed out.

Contact President George W. Bush

Contact Senator Dick Durbin

Contact Senator Barak Obama

Contact Senator Charles Schumer

Click here to find your US Rep

Thank you.

The REAL Losers

Many victims of subprime crisis

April 9, 2007

TERRY SAVAGE savage@suntimes.com

It's the loans that are subprime -- not the borrowers! Let's stop blaming the people who took the bait (and switch), and thought they'd landed their piece of the American Dream. Home ownership has been a goal of most Americans, or those who landed on our shores as immigrants.
The offer to make that dream affordable was irresistible.

Essentially, that's what happened to millions of families who make up a significant portion of the $1.3 billion subprime mortgages outstanding today.

...

Who's to blame?
Sure, some of those loans were taken out by scam artists who had no intention of owning the homes for long. Others figured on "flipping" the property at a higher price to the next dreamer.

But when the dust settles and all the blame is cast, it's very likely that the real losers will be the families who were attracted by ads run in newspapers and on local radio by mortgage brokers who promised low monthly payments, no money down and a chance to buy the dream house financed only by dreams.

Ms. Savage carries on about the poor victims. But The REAL Losers are the smart people. The savers. The sold-at-the-top-crowd. The couples that saw the outrageous prices and knew that the limit was the sky, not that the sky was the limit, and choose to sit on the sidelines. The Real Losers are the people that actually budget their income.

If The Real Losers now have to use their own tax money to bail out the greedy, the dumb, the lairs, and the gamblers, then there is no justice.

Shame on all of us!

ARMs Affecting Chicago

Homeowners Stuck As Lenders Cinch Standards

Source: USA TODAY
Publication date: March 5, 2007


By Noelle Knox
Edward Booker is one of nearly 3 million homeowners with adjustable-rate mortgages who've had trouble paying their bills. And, like Booker, many of them won't be able to refinance their loans once the interest rates start rising. At that point, they'll have to tighten their belts, sell their homes or lose them through foreclosure.

This month, the mortgage payment on Booker's Chicago home rose $200, to about $1,300. It'll go up again in September. He wants to refinance, but he fell behind on payments after his wife died of cancer in 2005, so no lender wants to take the risk.

"I'm just trying to hold onto my house until I can figure out something else to do," says Booker, 58, a former rail-car inspector who's on disability.

Lots of people got greedy. They listened to their buddies, the guy down the block, the late night infomercials, the real estate agents, the mortgage agents, and not that little voice in their heads warning them...

IF YOU CAN'T AFFORD IT, DON'T BUY IT!

Nothing goes up forever. Schemes are schemes and bubbles are bubbles. The next few years will be very hard on some people. At least they can say they once owned a home, right?