New term: "Naperville Fire"

Fire hits another house as it's under construction

Published February 13, 2007

NAPERVILLE -- Naperville firefighters are investigating the cause of an early Monday blaze that damaged a home under construction.

The fire was the third of a home under construction or rehabilitation in the Naperville area in about a month.

For some, foreclosure is not an option. They are not the first to go to arson to solve their problems. However, if they were dumb enough to get caught in this housing ponzi scheme, they will get caught in the criminal investigation. That will have a higher toll on their finances and credit scores.

This Effects All of Us

Very well done!

Guilty plea in mortgage scam

February 13, 2007

BY MARY WISNIEWSKI Business Reporter

Mohammad "Mike" Taghie Kakvand, the ringleader in a mortgage scheme that resulted in abandoned Chicago apartment buildings, pleaded guilty in federal court Monday.

Kakvand bought 33 apartment buildings in Rogers Park and on Chicago's South Side, but didn't renovate them, according to the indictment. Units were sold as rehabbed condos at inflated prices, using straw buyers who defaulted on $29 million in loans. The plot displaced renters and left decaying, crime-plagued buildings, according to community leaders.

"There is no punishment too severe for Michael Kakvand," said Ald. Joe A. Moore (49th). "He preyed on our neighborhood, he took advantage of people, and the damage he did took years to unravel."

The Lastest Numbers Are In

From the Illinois Association of Realtors"


Illinois Housing Statistics

January 25, 2007

Statewide Median Home Price Gains in December;Total Home Sales in 2006 Off 8.9 Percent from the 2005 Peak
...
In the Chicagoland Primary Metropolitan Statistical Area (PMSA), total home sales (single-family and condominiums) were 7,532 in December 2006, down 21.5 percent from 9,600 home sales in the same month of 2005. The median home sale price for the Chicagoland PMSA was $245,000 in December, up 0.2 percent from $244,500 in December 2005.

I would say the change in median price is a statistical 0%. Sales down 21.5%? Wow. What is happening?

Politicians At Work

Daley foe's housing plan

Brown calls for 10 percent set-aside

January 25, 2007
BY FRAN SPIELMAN City Hall Reporter One-upping Mayor Daley in the quest to solve Chicago's housing crisis, mayoral challenger Dorothy Brown on Wednesday proposed a 10 percent affordable housing set-aside on all projects -- public and private.

...

Daley favors private sector incentives and affordable housing mandates, only on city-subsidized projects. He remains adamantly opposed to mandatory set-asides on all private sector projects because of the impact lower-cost units could have on the city's property tax base and the chilling effect such a mandate could have on development.

"Developers need Chicago," Brown said at a news conference Wednesday. "This is a booming market. . . . We will not drive developers out of the city." Brown said her plan would offer developers fee waivers, density bonuses and fast-track approval of permits to minimize the financial risk.

Ms. Brown is not paying attention to the City. Chicago RE is dead in the water. Ms. Brown is not much of a business person, nor has much economic sense. Developers NEED to make money. Developers NEED to move their products. They do not NEED Chicago to do those things.

Brown's 10% set a sides will drag Chicago development to a screeching halt. Take a look around the area where Cabrini is/was. Many 3-flat condos sprung up on the rubble of the high-rises. Those 3-flats already have the set a sides. They are sold to yuppies promising them that the projects are going away and if they buy now their property values will skyrocket. What the yuppies were not told is that the residents for the high-rises would be moving in with them! Many of those condos are empty and for sale.

Waiting For What?!

...to get robbed? Raped?? Murdered???

[My snide comments in brackets.]

The waiting game

Urban pioneers settle in, hoping their investment pays off

By Mary Ellen Podmolik
Special to the Tribune
Published January 18, 2007

Four years ago, Collett and Brian Hudecek [they are white yuppies, sorry pic was in newstand ed.] were renting in the heart of Lincoln Park, near Steppenwolf Theatre in Chicago. Then they decided it was time to buy, but the upscale neighborhood was out of their budget. Today, they are seasoned urban pioneers. [Good for them!] Having outgrown their condo in West Humboldt Park, they are getting ready to move to a single-family home a few blocks further west [wait, wrong direction], hoping that the small signs of progress they've seen in the neighborhood will follow them.

"True, there's a lot of shady elements and you have to be careful and smart," [Smart how? Like NOT being an urban pioneer??] Collett Hudecek said. "But we've seen a coffee shop and some restaurants popping up. [That will solve everything, eh?] It hasn't exactly reached our street per se, but it's getting there."

They are not alone in their waiting game. Spurred by a desire to own a home [just how bad to you need a home??] and a budget that makes more affluent communities unattainable, buyers are venturing into unfamiliar neighborhoods and buying houses priced at a fraction of what they would cost elsewhere. They are fixing them up, settling in and waiting to see if their investment will appreciate as the neighborhood around them improves.

Real estate agents who themselves buy in diverse areas [but who DON'T live there] warn their clients that first and foremost, they have to think of a potential house as their home and not just an investment property where they happen to live. The tradeoff of living in a fringe neighborhood should be a home full of potential on the inside while you wait for the home's surroundings to change.

The benefits outweighed the risks for early buyers into Chicago neighborhoods such as Wicker Park, Bucktown and North Kenwood/Oakland. But how do you know for sure if the neighborhood you're eyeing will be the next to turn around?

You don't, and you've got to be willing to take a gamble early, say those who've done it and the real estate professionals that advise them. Potential buyers who wait until after developers, stores and restaurants arrive on the block will find prices already inching up.

"The drugs and the gang activity always precede gentrification," said Nacho Gonzalez, association director of the University of Illinois at Chicago Neighborhoods Initiative. "That's when a neighborhood has bottomed out. You look at it and say it's bad, but that's when you can get property at its cheapest." [Is he actually suggesting to clueless investors to buy in the most gang infested neighborhoods???]

Finding the right house requires homework, and a lot more of it than a buyer would do in a more stabilized neighborhood.

First, real estate agents say, look at the neighborhood's infrastructure.

Is easy access to transportation nearby? An "L" stop, perhaps? Has gentrification already hit neighborhoods on "L" stops closer to downtown? What about the roads? Is the house on or close to a major boulevard? Homeowners in South Chicago see a new Dan Ryan exit ramp at 91st Street as a sign of the community's up-and-coming status. [OOOOO, WOW an exit ramp! I'm so excited!!]

Another factor to consider is the existing housing stock. If much of it is teardowns waiting to happen, you don't want your older home surrounded in a few years by brand-new construction, regardless of how many updates you made. [But I thought if a mega million dollar houses was built next to a shack, it would increase the shack's value also. Has something changed?]

Jose Acevedo, broker-owner of Landmark Heritage Realty in Chicago, advises buyers to consider a graystone.

"Buying a graystone is better than buying stock," Acevedo said. "You buy a two-flat graystone in Bucktown, it's $800,000 to $1 million. You can find one in West Humboldt Park. You may be able to find it for $350,000 to $450,000. The question is how long is it going to take" for the neighborhood to improve and your investment to grow, Acevedo added.

When Michelle Parkinson was looking at buildings in North Lawndale, she was impressed by how beautiful the building exteriors looked in the winter. She bought a three-flat graystone five years ago and moved from Rogers Park two years ago. Inside, the building's three units had to be gutted. And outside, when the weather warmed, she saw clusters of people on the street corner, selling drugs. [THAT'S great!]

But she is heartened by the progress she since has seen, inside and out. A new police station opened nearby in February 2005. She qualified for a rehab loan from Neighborhood Housing Services and sees neighbors fixing up their own homes. She also counts small actions, such as a neighbor who frequently sweeps off area sidewalks, [They are sweeping up the empty littered dope baggies from the gangbangers] among signs of progress that community pride is strengthening on the block.

Parkinson has decided the purchase was a good one and estimates it will be another three years--or eight years total from the time she bought into the neighborhood--for her neighborhood to turn the corner.

"I figured there's so much gentrification east of me. I figured it won't be that long before it came to me," she said. "It's definitely going to pay off. I see the prices of homes, and they've gone up. I paid $149,000, and right now the building is worth $400,000." [So you want some one to buy your house that is surrounded by gangbangers for $400,000?!?! Are you nuts?]

When house-hunting, look for signs that the neighborhood is slowly catching the eye of other pioneers and determine your comfort level, say real estate agents. Drive around the neighborhood [dodge stray bullets] or walk from the train station at night. [HAHAHHAAH! GREAT idea!! Have wallet handy to give to muggers. Have multiple wallets in the case of multiple muggings.] To separate perception from reality, check the Citizen ICAM on the Chicago Police Department Web site, http://12.17.79.6/, a database of reported crime statistics by address, street, police beat or school. [In my links to the right, you are welcome.]

"I used to say I'll let Starbucks do my research for me," [I just threw up.] said Kara Finnegan, a sales associate at Dream Town Realty Inc. in Chicago. "And then Starbucks got too conservative and safe. Now I say if there are places that I want to eat at, grab a drink at or shop at, it's on the up and up."

Finnegan and her husband bought an 1885 brick two-flat in East Humboldt Park five years ago and moved in two years later. Now the couple is considering turning it into a single-family home for themselves.

"I just fell in love with the neighborhood," she said. "I stopped seeing it as a meal ticket and started meeting the neighbors."

Collett Hudecek has found her new neighbors, which include three generations of one family, to be welcoming and the block family-oriented. Still, she knows there's gang activity in the neighborhood and if it increases, she'll cut her losses and move. [Maybe you should not have gone there in the first place!]

"If I felt that was taking over the neighborhood, instead of the neighborhood pushing that out, [Those gangbangers ARE the neighborhood! They were born and raised there. That is their turf. Many Chicago gangs were founded in the 1950's as a youth group to keep outside youths from their neighborhoods. It was not until the 1980's-1990's that many gangs turned into narcotic dealing businesses.] that would be a sign for me to leave," she said. [That should have been a sign for you not to go there in the first place.]

Other signs for concern may include an increase in burglaries [The burglary victims are the pioneers. They are not from the hood and most local thieves would think twice about breaking into a neighbor's grandmother's house.] on the block or a loss of seniors, who often act as the neighborhood's eyes and ears.

The problem with buying into a changing neighborhood, real estate agents say, is that if an owner decided to sell, the pool of potential buyers is only like-minded pioneers.

It can be several years [or never] for a turnaround to take shape in some neighborhoods, so real estate agents warn prospective buyers that they have to be not only pioneers but patient pioneers. Give the area at least two years to show signs of improvement, they say, particularly if the next closest neighborhood to the city already is on the mend.

Pioneers also need to be aware that after years of seeing real estate speculators descend on other communities, longtime residents can be wary of outsiders. The key, UIC's Gonzalez said, is to become involved.

"The mistake they make is many gentrifiers go into a neighborhood, and they are encouraged by the real estate people to form an association," he said. "If you go into a neighborhood like that, join the local association that has always been there instead of separating yourself and then getting into conflict."

"When I lived in a condo and didn't talk to my neighbors in Logan Square, people would yell at me, `Yuppie, go home,'" said Sarah Linn, [Is that a sign?] a real estate agent at Baird & Warner who recently moved into a single-family home in West Humboldt Park. "When I bought my home, it was a very different feel. It was a block of homeowners, little old ladies and I went out and introduced myself. They were overjoyed. They asked me, `Is this an investment, or are you going to live there?' because they know the difference." [What was your answer?]

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Copyright © 2007, Chicago Tribune

Chicago is a city of neighborhoods. Many of which strangers should not be wandering around in the dark by themselves. Like it or not, Chicago's neighborhoods have a history of segregation. Readers from outside Chicago will be shocked and dismayed. But it is not a one way road, it is a multiple lane highway.

Fed Leaving Door Open to Lower Interest Rates

Fed's Moskow sees core US inflation easing, but still 'predominant' risk

WASHINGTON (AFX) - US economic growth is expected to strengthen and inflation is seen slowing in 2007, but it is still too soon to say rising prices no longer pose a threat to the economy, [Michael Moskow] the President of Federal Reserve Bank of Chicago said today.
...
He [Michael Moskow] said that continued weakness in the housing sector is holding back economic growth, but he does not think 'the developments in the housing markets will lead to more general economic weakness.'
...
'If firms and workers expect inflation to be high, they will want to compensate by raising prices and wages or building in plans for automatic increases,' he said.

Ya, God forbid firms raise wages, Mr. Moskow! Maybe us worker bees can afford a single family home, you know, that CRAZY American Dream we all have....

Believe it or not, I would like to see a quarter point raise in the rates. I think that will shake out the real estate market. Average hard working Americans cannot afford these prices. There are not enough lawyers and doctors to buy these shoe boxes in Chicago for what they are asking. Not every car is an Aston Martin, nor can you sell every car for Aston Martin prices. Same thing with housing. Sooner or later, they will have to let the everyday people back in. The only way to do that is to lower the prices.

NEWS FLASH!!!!

U.S. home prices unaffordable for many workers: study

WHAT!?!? NO WAY????

By Andrew Stern
Wed Jan 10, 8:02 AM ET



CHICAGO (Reuters) - U.S. home prices may have dipped over the past year, but many American workers would still struggle to afford a median-priced home in major cities, a new study said on Wednesday.

"American workers are really not gaining ground and they're so far behind in the first place," said Barbara Lipman, research director for the nonprofit Center for Housing Policy, which conducted the study.

While the median home price in the 202 largest metropolitan areas declined 2 percent from a year ago to $248,000 in the third quarter of 2006, mortgage rates rose enough over the year that homes actually became less affordable as pay did not keep pace.

Maybe that is why NOTHING IS SELLING. The sellers are asking for too much!

A great question to ask a seller is this: "Could you afford to buy your house for the price you are asking?" Watch their face REALLY close. You will see a twitch, then a response, "Oh ya sure." That initial twitch will tell you that they are lying.

The biggest rip-off neighborhood in Chicago is Edison Park. Look it up then take a drive. The entry price for a small 1,000 sq ft ranch with 3 beds is $370,000 - $400,000. Maybe it has Central Air. Maybe it has a 2 car garage. If it does, it's probably falling over. What a joke.

Again, the Tribune has the median home price in Chicago at $283,000. That is alright if you do not mind bullets flying through your windows. Find me a 3 bed, 1.5+ bath, 2 car garage house north of Irving Park Road for $283,000! Look on realtor.com, there is not one house in 60631 for under $300,000. If you want a nice place to live in Chicago, you WILL pay. Then the government will tax you right out of it.