Maggie Finegan Team Blog

You may say Maribeth Brewer and Jo Stavig are bonkers for bungalows.  These two West Ridge residents (friends and neighbors) are intent on gaining National Register Bungalow Historic Status for the majority of the bungalows in the West Ridge neighborhood.  In gaining Historic Status, bungalow owners who spend at least 25% of their home’s value in rehabilitation are provided property tax relief.  To accomplish this and with the help of volunteers, Brewer and Stavig had to photography over 240 homes and garages in the area, as well as comb through endless data on microfiche at the UIC library.

Both women restored their own West Ridge bungalows almost to their original glory.  They agree that it was not for the faint of heart.  First they had to undo the restoration efforts that owners during the 60’s had done.  “In doing so, they removed the jewelry of the house,” says Brewer.  Three stained glass windows had been removed and replaced with Lannon Stone filling.  Then they had to remove a non-working fireplace and the work just continued from there.

In Spring of 2003 the pair decided to create a grass roots movement to get area bungalow owners together to discuss bungalow renovation, plants, masonry, plumbing and preservation.  Sixteen residents attended the first WRBN (West Ridge Bungalow Neighbors) meeting.  The result was a commitment from all to assist each other in preserving and appreciating these homes.

In their work getting the West Ridge bungalows registered, they discovered that the National Register requires a number of bungalows per block.  Ironically, that eliminated their homes.  That did not stop Brewer and Stavig though, who are committed to helping others get their historic district designation.

Reprinted from WRBN Blog

The financial pundits and real estate gurus are all claiming we need at least another 10% price decline in the housing market before we revert back to the 4% per year increase in the trend line.  As I read the financial news I think about inflation heating up faster than expected.  Eventually something will be done to keep it at bay.  This may actually bode poorly on the homebuyers looking to capitalize on a “great deal” by waiting to bottom-pick the market.  (Professional traders have a difficult time bottom-picking markets.)   Almost all home buyers finance part of their transaction and are somewhat sensitive to interest rates.  Since rates are near historic lows, does it make sense at this point to wait any longer?  No. 

The prediction that prices need to drop another 10% is based on the nationwide historic growth of home prices at about 4% per year over the last two decades of the 20^th Century.  After year 2001 we observed the trend grow steeper just as the entire lending business went wild with easier financing products turning almost anyone into a mortgage customer and home buyer.  Since late 2006 prices have been in steep decline as lending guidelines have tightened, restricting unqualified shoppers from competing in the housing market.  We are retreating back towards a natural trend line of modest growth and the expectation is for an additional 10% decline in home prices. 

Everyone is entitled to their opinion or prediction of the future.  Therefore, I will humbly make a conservative prediction as well.  Mortgage rates will be higher by at least 1% by the time home prices reach the trend line.  When the 2008 elections are over, expect the truth to unfold.  Inflation is hot and needs to be dealt with to prevent a new set of issues to heat up.  The Federal Reserve Bank cannot ignore that fact forever and the textbook response to combat inflation is by raising key lending rates accordingly.  Bank rates have been artificially cut to provide liquidity for an uncertain mortgage market.  The actual benefit of these rate cuts has been to increase the profit margins of investors while the consumer has seen only modestly lower rates.  Choose how you want it.  Enjoy the low rates now or take the low prices later.  Consider the following example: 

Assuming prices do decline another 10% from current levels and mortgage rates increase by 1%, a person buying a $400,000 home at 6% interest might find that same home for $320,000 at 7%.  Nobody has a crystal ball but there is reason to believe with inflationary pressures on the economy, the Federal Reserve Bank will eventually raise rates and the cost will be passed on to the consumer.  In this example, the net savings of waiting are only $2.49 per month which is cheaper than one additional cup at the coffeehouse per month. 

The home shopper currently renting a home is behooved to make a move out of their negative cash flow situation, which is what paying rent essentially is, and into the leverage and benefits of home ownership.  The current home owner needing a sale on their current home before purchasing another home would do equally well to swap now given the marketplace offers a “wash” on home prices at any point in time.  If waiting to buy a home has been your strategy to pay a lower price, be ready to pay for it with cash. 

© 2008 Michael S. Amers

Chicago Waldorf School will soon be handing over their coveted Sophia Garden to Loyola University for development purposes. 

Waldorf School is a private, non-mainstream school which focuses - among other things - on nature and the environment.  The school is located in Rogers Park near the University, and has been using this garden space by verbal agreement with the university for nearly eleven years.  It is much needed space for the children to run and play, as well as to cultivate vegetables, herbs and flowers - part of the students’ curriculum.

Sheree Moratto, co-administrator of Waldorf said the school has known this would only be temporary, and has been going back to Loyola each year to ask for the continuation of use for another year. This has fostered a unique relationship between the school and the university.  Loyola never required Waldorf to pay for the land, and Loyola is continuing to work with Waldorf to look for an alternative space.  The school would like to find a permanent spot to purchase, but is not sure they can afford it. 

Parents and school personnel are extremely upset about this change in events.  For Waldorf, open space is a valuable commodity and the Sophia Garden is devastating to lose.  Still, Moratto is confident about relocating the garden, and willing to work with Loyola as both institutions continue to develop in the area.

“Having the ability to observe the natural world unfold in a setting that’s not engineered by human beings is a critical component to Waldorf education,” says Moratto.  “If we don’t have [the garden] down the street, we’re going to find a way to have it down another street.”

To read more about this story, click here.

“Service to one’s neighbors” is being highlighted in an exhibit at the Rogers Park/Westridge Historical Society Museum at 7344 N. Western Ave. 

“Service to one’s neighbors is the soul of any thriving community” says Jacque Day, former president of the historical society and developer of this exhibit.  Originally the intent of this exhibit was to focus on the social justice movement.  But as Day began digging deeper, she began bringing into the work, the ordinary people of the neighborhood who changed this community by helping others.  Rogers Park and Westridge are two of the most diverse neighborhoods in the city of Chicago.  This diversity is at the heart of the spirit of reaching out to your neighbor, who may speak a different language than you.

The exhibit honors Paul P. Harris, who in 1900 formed a service-oriented professional organization which eventually became the first Rotary Club; Herbert Williams, who at the beginning in 1933, operated a news stand at Rogers Avenue and Sheridan Road that continued for 50 years. In the ’50’s, he drove children to and from St. Jerome’s school before it had bus service.  Many other former residents of the neighborhood are honored, including former 49th Ward Alderman and current Cook County Clerk David Orr, for his communtiy activism.  Equal rights activist Sister Ann Ida Gannon, President of Progressive Mundelein College was honored, as well as Dr. Bertha Bush, a Woman’s Club member, who assisted at Northwestern University Settlement House teaching english to immigrants. 

Historical photos of the neighborhood from the early 1900’s are abundant, but the exhibit takes the neighborhood even further back to its earliest residents, the Native Americans.  The Indian-owned land changed hands through three treaties. Indian Boundary Park was named after one of these treaties.

Exhibit Information:  Rogers Park/Westridge Historical Society Museum, 7344 N. Western Avenue, Chicago. 773-764-4078. There is no closing date for this exhibit.  Museum hours are 1 to 5pm Wednesdays and Fridays, and 7 to 9 pm the first Thursday of every month.

For a full article on this exhibit, visit www.chicagojournal.com.

After the long and dreary winter we’ve experienced, it’s hard to believe that summer is actually right around the corner, and now is the time to get your children enrolled in summer day camp. 

If you live on the north side of Chicago, you’re in luck.  You have dozens of options to choose from.  There are camps that focus on literally every activity under the sun–from academic camps to yoga camps, and everything in between.  Traditional day camps are the favorite of many, and there are many such camps in Rogers Park and Evanston.  Here are two of the local favorites:

Rogers Park

Kid’s Playing Camp- Partners with St. Scholastica Academy, 7416 N. Ridge, Chicago.

This camp is a well-kept secret, according to many satisfied parents.  There are three sessions: 6/21 - 7/3, 7/7 - 7/18 and 7/21 - 8/1.  You can sign up for one, two or all three sessions. This camp has a generous drop off and pick up policy.  Drop off is between 8 and 8:30am, and pick up is between 3:45 and 5:00pm. 

Activities include sports, music, cooking, drama, science, arts and crafts, photography and swimming.  Every Wednesday is field trip day, when the children venture out to museums and recreational activities. Fridays are swimming days, when the children get to swim and play at the beautiful Northeastern University pool.  Camper/counselor ratio is 1:6.  Fees are $300 - $325 per session.

Evanston

McGaw YMCA Day Camp

This camp fills up quickly every year. Ten weekly sessions run from June 16 - August 22. Camp Rainbow is for the younger kids - ages 2.5 - 5 years old, and Camp WaNaGo is for kids from 1st to 5th grades. 

Both camps fill their days with activities ranging from arts and crafts, sports, games, learning activities and swimming, and weekly field trips. Regular camp hours are 9am - 4pm (shorter hours for the little ones), and extended hours are available for an additional fee. Per week fees for non-YMCA members are $203, and for members, $169. Each week focuses on a different theme. 

For a comprehensive listing of Chicago-area camps, visit here. 

Remember when procuring a loan was more than a borrower signing their name and collecting a check at the closing?  Discussions with mature mortgage bankers have yielded similar responses towards the mortgage business lately.  Here are the highpoints of these conversations: 

1. Mortgage Insurance companies no longer want to assume the risk of anyone who has a FICO score lower than 620.  Scores below 620 will require a minimum equity interest of 20% down.
2. If the subject property is located in a so-called “Declining Market” by the appraiser, Fannie Mae, Freddie Mac, or the investor (i.e. the bank), the appraised value may be subject to a 5% reduction, effectively reducing 100% financing to 95%.  95% financing is reduced to 90%.  The borrower will be asked to make up the difference.
3. New construction condos and condo conversions require extensive documentation from the developer (see my recent post on condos) even if the building has been turned over to the association in the last year or possibly two.  These properties also require a minimum of 10% equity as a primary residence.  Investment condos require substantially higher down payments.
4. Stated income programs are becoming so rare, some bankers question if they will be around much longer.
5. Jumbo mortgages are being priced well over the fair market value to compensate for the inherent risk they carry.  Perception may be a better word.
6. The traditional spread between the 10 Year Treasury Note and the Fannie Mae 30 Year fixed rate mortgage is about 150 to 200 basis points (1.5 to 2 points).  The recent spread has widened to well over 300 basis points.  Market risk has been passed on to the consumer as investors demand a higher rate of return on all home mortgages.

Some of the points concerning borrower qualification and condominium risk assessment are nothing new.  Before this decade, these were in fact commonplace and expected.  The years since 2001 offered such a lax market that everyone assumed it was easy and simple to attain a mortgage.  The only correct assumption that can be made now is to expect greater demands by banks concerning borrower feasibility until the marketplace finds balance and corrects itself. 

Consider ourselves lucky that we have not completely returned to the days of 25% to 30% down as they once were.  FHA still offers a government agency insured loan with a 3% down minimum, for example.  The best borrowers with the best credit will need to be patient and understanding that this is not a personal vendetta against them, rather an industry wide correction of a marketplace that ran amok with bad programs for bad credit risks. 

© 2008 Michael S. Amers 

Thinking about buying a condo, home or apartment building in Chicago but not sure which neighborhood is best? 

Want to learn more about Chicago’s History and Culture?

Planning to entertain out of town guests in Chicago?

Check out the Chicago Neighborhood Tours, offered by the City’s Office of Tourism.  The affordable half-day tours highlight the history, tradition, stories and people of Chicago, and are guided by local residents. Tours include Andersonville, Uptown, Lincoln Square, also Wicker Park, Bucktown, Historic Bronzeville, Greek Town, Chinatown, Little Italy, Pilsen, Hyde Park, Kenwood, South Shore, Pullman, Beverly, and Garfield Park Devon Avenue. Check out the housing stock; learn about architecture, culture, history and local fare in these Chicago neighborhoods.

There are also historic tours such as the White City Tour, Great Chicago Fire, Literary Chicago, and the history of the Greek, Polish and Irish culture in Chicago. For more information or reservations call 312 742-1190 or visit here. The cost is $20-$30, with senior discounts and group rates available. If you have out of town guests, you can receive additional city information by calling 1-877-CHICAGO or visiting here.

Rogers Park is situated in the Northeast corner of Chicago.  With its Neighbors Evanston to the North, Skokie to the West and Lake Michigan to the East, its residents love its convenient, as well as scenic, location.

In the mid-1800’s, Irishman Phillip Rogers purchased approximately 1,600 acres of government land, after which Rogers Park was eventually named.  In 1872 his son-in-law, Patrick Touhy subdivided the land near what is now the intersection Lunt and Ridge Avenues.  People quickly and steadily moved into the area, and it was incorporated the Village of Rogers Park.  Starting in the 1860’s, rail service provided round-trip transportation from Rogers Park to downtown Chicago. When the Northwestern Elevated Railroad opened in 1908, Rogers Park population increased dramatically. 

Due to housing shortages during World War II, large apartments and homes were subdivided into smaller ones.  Population greatly increased, particularly in the area North of Howard.  Around 1960 new construction and renovation began, and has continued to increase ever since.

Entertainment has always been an important park of life in Rogers Park.  During the first half of the century, four grand movie palaces were widely utilized:  The Howard, Adelphi, Granada and Norshore theatres.  Rogers Park at one time had a country club, and a ball club, and for years and even today, a live theatre community has flourished.

In the past, Rogers Park was viewed largely as a Jewish and Roman Catholic community. Over the past century that has changed, due to changes in immigrant population.  Today, the neighborhood supports a variety of religious denominations.

In the early years, Irish, German and Luxemburgers came to settle in the area, but by the 1960’s the neighborhood was home to Russian and Eastern European immigrants. In the 1970’s, immigrants from Asia moved in, and the neighborhood experienced growth in the African American population as well.

Today, Rogers Park is one of the most culturally and economically diverse neighborhoods in the nation.  There are over 63.000 residents who call Rogers Park home.  People who live there enjoy true diversity, as there are more than 80 languages spoken.

In a city known for its homogeneity within neighborhoods, Rogers Park is truly a unique jewel.

On Thursday, March 6, 6:45pm at the Rogers Park Chicago Public Library,  Rogers Park residents, community leaders and business owners got to voice their opinion about what they would like to see in their local newspaper, the News-Star. The discussion panel included Dan Haley, Publisher, Lorraine Swanson, Editor and Helen Karakoudas, Managing Editor.  The event was sponsored by the West Rogers Park Community Organization, West Ridge Chamber of Commerce, DevCorp North and Partners for Rogers Park.

The News-Star, which has been the community paper encompassing Rogers Park, Edgewater and Uptown since the 1930’s, was published as part of the Lerner Newspaper Chain.  The paper was recently in danger of becoming defunct when in a last-minute act last January, it was purchased by the Oak Park Wednesday Journal News Company, along with two other Pioneer-Press publications. Now a new paper with a fresh start, Publisher and Editors are eager to hear about what the people want to read.

A lively discussion between the paper leaders and Rogers Park residents ensued over several news feature possibilities as well as changes to existing ones.   A few of these discussions included the Police Blotter, advertising and sports.  Many residents felt that too much crime was being reported, while many felt that there was not enough reporting. Haley said that if the paper felt that it was serious enough, then it should be reported.  Residents can also go to the CAPS website, www.caps24.org or attend a CAPS meeting to be informed about area incidents.  Residents can be assured that a high school sports section, a widely popular feature, can be expected soon.  One resident pointed out that the only real estate advertising recently featured was that of real estate in other neighborhoods.  Haley explained that due to the lack of an Advertising Editor, there was not much advertising of any kind, and that would change soon.  Some of the other features Rogers Park residents discussed included letters to the editor, local editorials, essays, and an editorial cartoonist.  Something very important to some was promised: The New York Times Crossword Puzzle.  Haley emphasized the importance of diversity and reporting stories on all of the ethnic groups that make up Rogers Park.  He said that although the paper has no plans to publish the News-Star in any language other than English, it is open to a future possibility.

The News-Star is continuously expanding its dropoff locations, but if you are unable to locate a paper, you can view it online at chicagojournal.com.

I see the glass half full.  I see opportunities abound.  I see the Federal Reserve Board make some drastic moves in order to restore liquidity and confidence in our credit markets.  The news has been tough on the real estate market.  Still, there are signs this market may not be as bad for the qualified homebuyer. 

The foreclosure crisis is a nationwide problem but the highest foreclosure rates are in formerly hot real estate markets like Las Vegas, Nevada and Stockton, California.  Depending on where you are geographically determines the severity.  About 1% of all homeowners nationwide risk foreclosure.  Not bad when you consider that many of these homes were bought on speculation and never occupied. 

The dollar has devalued (helped by Fed rate cuts) raising the price of all commodities (petroleum gets the headlines).  Homes are a commodity like anything else.  Real estate prices have come down enough where wealthy Europeans (strong Euro) are taking a second look at our vacation markets.  Although the recent trend has been higher, mortgage rates are still near historic lows.  It warrants keeping it all in perspective. 

Remember that real estate is a local phenomenon.  Desirability of a locale determines its demand.  Detroit with its susceptible automotive economy is a far different market than Chicago, the cultural and economic center of the Midwest. 

This may be one of the best times to purchase a home in 4 years.  With this being an election year, it is likely mortgage rates will remain relatively stable as the two major political parties don’t want a full blown crisis on its hands (and get the blame for it).  The fed will probably cut bank rates again, but since inflation is still a very real concern for economists, I imagine we will see a return to rising rates again next year when the campaign is over. 

You can wait to buy a home if you wish but the net cost of buying it cheaper if prices continue to decline might be outweighed by higher interest rates.  First timers are obviously in the best position to take advantage of this situation and have the most choice since the early 1990’s.  Why stay where you are and give your landlord another rent check?  That money is gone and in the long run is a minus sign on your savings.  Invest in yourself.  Home ownership is a time proven first step in investing and has been an excellent equity builder for a long term financial plan.  It tends to beat out other investments. 

The twenty-something generation has not fully entered the real estate market recently, but how much longer can they wait?  The baby-boomers have reached the retirement milestone and will consider downsizing or relocation to warmer climes in the years to come.  Families have outgrown starter homes.  Companies relocate employees.  The point is you can’t shut down the real estate market forever.  There are reasons we buy and sell.  Hopefully we are a wiser society now and each of us is better prepared as homebuyers, pre-approved by a lender first and buying only what is affordable. 

© 2008 Michael S. Amers