Chitownproperty

The single most important thing to understand before you start shopping for a home is how much you can afford to spend. CNNMoney.com has a handy calculator that lets you plug in values such as your annual income, other debts like car payments or student loans, a proposed mortgage rates, and taxes to calculate how much you can afford in both a conservative or aggressive scenario.

Existing home sales rose 18.7% in Chicago from April to May but are still down 27.5% from May of last year, according to data from the Illinois Association of Realtors. Within the city, the median price rose 2.3% to $225,000, which is still 29.5% down from last year as well.

From the Tribune, this article answers a reader question about paying down your mortgage–i.e. putting a little extra toward the principal each month–even when you already have a low interest rate:

One of the great benefits of prepaying your mortgage is that each prepayment is applied toward the principal of the loan. Because you’re paying interest on what you’ve actually borrowed, paying down the loan faster than prescribed in a 30-year amortization schedule means you’re paying less interest overall.

Prepaying your mortgage is most effective when interest rates are high, because you’re shortening the life of the load and reducing the amount of higher interest you’ll pay. But even with a low rate, prepaying the loan can shave years off the term of the mortgage.

Housing affordability is at its highest point in 18 years, according to the Housing Opportunity Index released by Wells Fargo and the National Association of Home Builders last week. Over 70 percent of homes were affordable to families earning the national median income during the first quarter of 2009, up 10 percent over the previous year. Lower home prices, low interest rates, and the new $8,000 tax credit for first time home buyers contributed to the increase.

The most affordable city in the country was Sandusky, OH; the least affordable, New York City. Chicago was 165th out of 220 metropolitan areas.

Coldwell Banker has a new channel on YouTube featuring videos with real estate advice, market news, and community profiles like the one above about Pilsen.

Wicker Park/Bucktown 1 bedroom + den

Price: $225,000
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Affordable luxury in the heart of Wicker Park/Bucktown– close to everything! This newly rehabbed 1 bedroom plus den & tandem room condo is located in the rear of the building with a private balcony in addition to the common deck. The den is best used as an office, but could even be a second bedroom. The large eat-in kitchen boasts maple cabinets, granite, and SS appliances. The beautifully finished bathroom and in-unit laundry complete the package. This top floor unit has great ceiling height and shows like a model! Extra storage is in the basement, and rental parking options are available in the neighborhood.

West Loop condo with fabulous deck

Price: $345,000 + 30K parking
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With its enormous 600 square foot private terrace, this two bedroom, two bathroom home is truly special. The terrace, accessible from every room, is big enough for cooking and dining, relaxing and playing. The interior space is wonderful as well. A gracious foyer leads you to the large kitchen that is finished with granite and stainless and has an extended peninsula with room for many bar stools. The kitchen over looks the spacious living room with oversized windows, high, concrete ceilings, fireplace and room for a small dining table. This condo is finished with hardwood floors, newly remodeled baths, new carpet and custom paint throughout. Both bedrooms are fully enclosed and the master bedroom is especially large with a gorgeous master bath with double vanity and the finest finishes. Closet organizers, in-unit washer/dryer, extra storage and a prime garage spot for 30K. Located in the heart of the West Loop; steps to transportation, loop, restaurants and shops and newly proposed neighborhood park

Realty Times - In a Down Market, Pricing Needs to Get Out Ahead of the Curve

The hardest part about a declining or stagnant market is deciding where to set your asking price. In an “up” market, this was easy: you could look at recent sales of similar homes and set your price a little higher. But when things are moving in the opposite direction, how do you know where to start?

In the book Shift: How Top Real Estate Agents Tackle Tough Times, author Gary Keller says the same logic applies. Sellers in a down market have to get ahead of declining values and set their asking prices where they will attract offers, and this often means lower than recent comparable sales. As Bob Hunt says in his review of the book for Realty Times, “If you fail to get ahead of the market when the market is in decline, the consequence is not that you simply receive a lower price; the consequence is that you don’t get a sale at all.”

Unique floor plan in the West Loop

Price: $369,900 + 28K parking
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Welcome home to this gorgeous unit with a highly desirable floor plan in a fabulous building. In the heart of the West Loop, this chic home comes with the finest finishes throughout and a split floor plan unique to the area, with two fully enclosed bedrooms, each with large windows. This home is one of few in the building with a large terrace for lounging and gardening, facing west, away from the street, creating a very quiet and serene space. High concrete ceilings provide for excellent soundproofing within the unit as well. Dark hardwood flooring and high end finishes in the kitchens and bath make this home feel sleek and brand new. The master has a huge walk-in closet and nook, ideal for a sitting area. Fabulously run, financially sound building with workout room and part time door person keep the assessments low and make this a secure investment. Heated, deeded
garage spot for 28K. Short walk to the Loop and steps to transportation, this West Loop location has it all. Built well, decorated beautifully and kept in pristine condition for the most discriminating buyer.

There is a fair amount of confusion about the new $8,000 tax credit available to qualifying first-time home buyers. In the past, first-time buyers could get a $7,500 credit, but it had to be repaid to the government over time. The new credit does not have to be repaid, and can be claimed on either your 2008 or 2009 tax return. For instance, if you bought a home for the first time in 2008, but have already filed your taxes without taking the credit, you can claim it on your 2009 returns. Essentially, it is a one-time gift from the government toward the purchase of your first home.

The video above from the Illinois Association of Realtors explains the tax credit in more detail, as does Mary Ellen Podmolik in her weekly column in the Chicago Tribune.

Gold Coast one bedroom with amazing views

Price: $269,900
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Amazing views of the lake and city from this 850 square foot true one bedroom at the coveted James House. This fantastic home has a beautifully updated kitchen with granite counters that opens to a breakfast bar overlooking the huge living/dining space. The bath was recently remodeled with a large walk-in shower and gorgeous tile. The spacious east-facing balcony is perfect for enjoying stunning lake and city views. This home is situated in the heart of the Gold Coast and steps the beach, transportation, Old Town’s fabulous restaurants and shopping on Michigan Ave. The James House building is equipped with a rooftop deck, laundry room, work out facility, 24 hour door person, on-site management, access to the outdoor pool and on-site leased parking for you and your guests.

One bedroom West Loop loft

Price: $$249,900
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Great 1 bed 1 bath loft with lots of character! As you enter this home, the living room greets you with its exposed brick walls, timber ceilings, hardwood floors and fireplace. Adjacent to the living space are the large balcony, ample dining space, and an updated kitchen with stainless steel appliances and granite countertops. The private bedroom is fully enclosed and features a dramatic barrel shaped brick ceiling, large window and lots of closet space. This light filled loft has large north facing windows with city views. In unit laundry, central heat and air and extra storage complete this home and secured parking is included in the price. Located near everything the Loop and West Loop has to offer, the building is close to public transportation and has an exercise room and common rooftop deck. This is truly a fabulous place to call home.

Roscoe Village 2 bedroom with lots of outdoor space

Price: $399,900
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Spacious 2 bedroom 2 bathroom home with two outdoor spaces! This home is perfect for entertaining. Larger than most 2 bedroom condos, its living/dining room includes ample space for a large dining table. The beautiful kitchen overlooks the living/dining rooms and has a breakfast bar with room for several stools. In addition to a large back deck, there is also a very private front balcony off of the living area. Built in 2005, the finishes are beautiful and include hardwood floors throughout, wood-burning fireplace, wine fridge, stainless appliances, granite countertops, marble baths, large tub and separate shower and in-unit side by side washer and dryer. Parking is included in the price! Walk to everything the Southport Corridor and Roscoe Village have to offer as well parks, the el and more!

In a press release last week, National Association of Realtors president Charles McMillan applauded the Federal Reserve’s move to purchase an additional $750 billion on mortgage-based securities from Fannie Mae and Freddie Mac and up to $300 billion in Treasury notes. “Greater numbers of home buyers will be able to purchase a home, and homeowners facing challenges will be able to refinance into better terms,” he said. “We already are experiencing a great improvement in housing affordability due to historically low interest rates, and the Fed’s move will push affordability conditions to the best levels in 40 years.”

Mortgage rates dropped last week; the average 30-year fixed rate loan is now 5.37%, a full point lower than it was at this time last year. The lower rates come at the same time mortgage applications went up over 11%, as people take advantage of the discounts to refinance and buy homes.