Tag Archives: housing market

To Rent or To Buy – That Is the Question

DSC_0011Is it cheaper to rent a home or to buy one? With rents rising much faster than home prices, the answer these days definitely comes down on the buy side. And, in Chicagoland the difference is even greater than in much of the country.

Jed Kolko, chief economist for Trulia, published a research study a few weeks ago showing that across America it is cheaper to buy than to rent – some 38 percent cheaper. Kolko also looked at specific metro markets, and his study found that in the Chicago area it is 47 percent cheaper to buy than to rent.

This research assumed that buyers had a 30-year fixed rate loan with 20 percent down and a 4.5 percent interest rate, itemized their income tax deductions, are in the 25 percent tax bracket and stay in their home for seven years. Kolko also wisely used a very conservative annual price appreciation number – between 1.7 and 3.1 percent, depending upon the metro area. (Most experts say you should never look at a house as a short-term investment – in other words, less than five years.) Of course, as the assumptions change, the benefits of renting vs. buying change, too.

Interestingly, the rent vs. buy math indicates that, under current conditions, buying beats renting until mortgage rates hit 10.6 percent, then renting becomes cheaper than buying.

If you are thinking of buying at Newport Cove, our waterfront development on the Chain O’ Lakes near Antioch, Illinois, we do work with our customers to make that happen. Besides helping locate mortgage professionals who can adapt to your particular needs, we also are open to discussing rent-to-own or mortgage assistance programs.

NFL, HBA Help Build Home For Wounded Vet at Newport Cove

Sometime next year a wounded warrior from the Chicago metropolitan area will get the keys to a new home, thanks to a team of local organizations and individuals.The Chicago NFL Players Association, the Chicago area home builders associations, an anonymous donor, the Newport Cove community in Lake County and an architectural school have joined together to create a home for a military veteran wounded in Afghanistan or Iraq.

“We want to give back,” said Reggie Smith, retired linebacker and president of the NFLPA’s Chicago chapter, in making the announcement today, Veterans Day. “It’s our way of thanking the men and women who put their lives on the line for our country.”

The home, a LIFEhouse™ featuring universal design principles, will be located in Newport Cove, a waterfront community on the Chain O’ Lakes near Antioch. “It’s a lovely setting,” said Rita Unzner, executive officer of the Home Builders Association of Greater Chicago. “The house is being designed to accommodate the special needs of the wounded veteran. It will not only be functional, but also beautiful, a place where the vet and his – or her – family can heal and grow.”

“We hope it will be the first of several homes our groups create,” she said.

She added that many members of the three Chicago area home builders associations (HBAGC, Northern Illinois HBA and Fox Valley HBA) will be providing products and labor for the venture.

“The wounded veteran recipient will be chosen from recommendations by local veterans associations, VA hospitals and communities,” Unzner said.

New American Homes, the developer of Newport Cove, will construct the house. “The home building industry has been suffering in this economy,” said Susanne Tauke, company president. “This is a way of turning lemons into lemonade. Thanks to a very generous donation of seed money and partners like the NFLPA and home builders groups, we are able to work together to create something that will be a wonderful gift for a wounded veteran.”

Newport Cove, an award-winning planned community of 67 homes located on 42 waterfront acres along Bluff Lake on the Chain O’ Lakes, includes a private 100-slip marina and eight-acre waterfront park.

Tauke’s company has some experience in creating universally designed homes. Two years ago New American Homes teamed up with the Department of Architecture, State University of New York at Buffalo, to create the first LIFEhouse™, a home exemplifying universal design standards. The university is internationally renowned for its IDEA Center (Center for Inclusive Design and Environmental Research) and its pioneering work in accessibility and universal design.

The LIFEhouse™, located at Newport Cove and open for viewing, is a 1,992-square-foot ranch home with three or four bedrooms and three baths plus a full lower level. It has received several awards and been featured at the American Institute of Architects 2011 National Convention, the National Endowment for the Arts/American Institute of Architects 2010 Diversity Leadership Meeting and the Harvard University Graduate School of Design’s 2011 Social Change lecture series.

The wounded warrior home will be another LIFEhouse™.

This is the second project in which the local NFLPA and builders associations have worked together. Last spring they joined to help renovate Chicago’s AMI Kids, an alternative school for troubled children.

“Our home builders want to use their skills to do something valuable for the communities we live and work in,” said Unzner. “We hope to encourage people to join with us to build many projects like this wounded veteran house.” Asked what is needed to complete the home, she mentioned cabinets, plumbing fixtures and carpeting, among other products, then pointed at the Newport Cove marina and said, smiling, “We’d also love to find someone to donate fishing poles – or a boat!”

Warren Buffett Bets on Housing Rebound

Famed investor Warren Buffett is betting on housing… literally.

Perhaps replaying a scene from a classic movie, the Berkshire Hathaway CEO has made a Trading-Places-esque $1 bet with former Office of Management and Budget director Peter Orszag that unemployment will fall below 8 percent before the next presidential election due to a strong housing rebound that will breathe life—and jobs—into the economy.

Buffett emphasized that while his bet rests on the job market, the true key is real estate. “I’ve got a bet with [Orszag about unemployment],” he said. “But… that’s because I think housing will come back before that. If I’m wrong about housing, I lose the bet.”

Buffett elaborated on Friday, telling Bloomberg Television that “he sees nothing that indicates any kind of double dip,” adding that he believes the real estate recovery “could begin relatively soon.”

Don’t miss out on your chance to bet with Buffett. Mortgage rates are at all-time lows at Newport Cove, and the only way to avoid losing a lot more than Peter Orszag’s dollar is to lock in those rates now.

The 10-Year Hybrid ARM Makes Sense!

Question: Do you want to buy a house?

Did you answer, YES?

Then, ask yourself these questions: Has your job required a transfer in the past 10 years? Are you buying a starter home? Are you single, but planning to someday get married and have children? Do you plan to retire in the next 10 years? Are you having trouble qualifying for a fixed rate mortgage? Do you expect to move in the next decade? Do you need a jumbo mortgage? Do you believe the country will have significant inflation in the next decade?

If your answer to one or more of these questions also is in the affirmative, you may be a candidate for a “hybrid” adjustable rate mortgage. At Newport Cove, we think the 10-year hybrid ARM is a great financing vehicle. And, be assured, it is not the same old ARM your father warned you about!

Often when Americans move, they think they will stay in their new home “forever.” This is rarely the case. People move because of job changes, retirement, changes in family size, marital status and economic situation. The typical length of home ownership in the U.S. is about five to seven years.

As the length of the mortgage term goes up, so goes the rate of the mortgage. Thus, a 30-year-fixed mortgage is more expensive than a 15-year, and 15-year mortgage more expensive than a five-year. If you know you will be in your home for less than 10 years (or even 12), you are wasting money if you take on a 30-year mortgage.

A hybrid 10-year ARM offers a fixed rate for 10 years, and then an adjustable rate for the next 20. For those who are quite certain that a move is in their future, this mortgage can be just the ticket. For 10 years they will enjoy a much lower monthly payment. If they are still in their home in the 11th year, the mortgage rate will adjust then and every year thereafter, according to the terms agreed to at the beginning of the loan.

Lenders have much more leeway in pricing ARM mortgages versus fixed-rate mortgages. If you decide on an ARM loan, you will find that rates can vary significantly – in some cases, almost two points – from one institution to another. (You will not see this much variance in 30-year fixed rates). In other words, if you are looking at an ARM, it pays to shop!!

At Newport Cove, we are offering special financing on 10-year ARMs for our existing spec homes. For the first two years, qualified buyers will pay a rate of 2.5 percent. The most they will pay in that 10-year period is 4.5 percent. (This program assumes a downpayment of 80 percent. For those who want 90 percent mortgages, Newport Cove can purchase other special financing programs from our lenders.) Thus, for two years, a buyer could be living in our beautiful Highmeadow model home, at right, for a principal and interest payment of just $1,249 per month. And, in the first 10 years, the largest monthly payment the buyer would face would be $1,602 per month. (The sales price of this home is $395,000.)

The hybrid ARM is an interesting alternative to normal fixed rate mortgages. Whenever you borrow, you take on risk. Savvy borrowers decide what risk works best for them in their own unique situation.

Housing Prices WILL Go Up

Despite the endless doom and gloom about housing on television business news programs, we have been contending that the economic fundamentals soon will reassert themselves, that the cost of homes will rise to meet the cost to produce them, that supply and demand will be equalized.  And, when that happens, the price of housing will rise rapidly and dramatically.

This article in Nation’s Housing News and the research it is based upon support our contention

If living in a permanent vacation setting has been your dream, there’s no time like now to build a home atNewport Cove!

A Housing Shortage? You Kidding Me??

Is a housing shortage coming? If you watch TV news or read newspapers, you would say, “Absolutely not!” Yet a few economists are beginning to predict a housing shortage in just a few years. Why? Here’s the story:

 According to the U.S. Department of Commerce, our country forms something north of one million new households each year. In other words, every year we need to add another one million-plus housing units – apartments, condos, single-family homes. During the height of the housing boom, the country was building more new homes than households being formed. (Small wonder there was a housing glut!) But, now, we are building far fewer. Recent housing statistics show that the country is adding around 500,000 units per year, less than half of what is needed.  And, this number does not take into account the obsolete housing units that are torn down annually.
Once the country burns through the excess inventory built in the 2005-2008 era, the supply of housing being produced will not begin to meet the demand. Because so many building material suppliers and construction companies have either cut back or disappeared, it will be difficult to construct the number of units needed. Thus, some economists are beginning to predict not only a housing shortage, but an accompanying increase in housing prices.

Not many people have the courage to buy in a down market. But, historically, smart investors run against the herd. They sell when everyone else is buying and buy when everyone else is selling. With interest rates at record lows and housing prices down from their lofty heights, now might be the best time in a lifetime to buy real estate.

Three Reasons To Buy A Lakeside Home NOW

Living year-round in a newly built, energy-efficient lakeside home is a practical choice wise home investors are pursuing now.

1. Lowest mortgage rates
The average rate for a 30-year fixed loan sank to 4.58 percent last week, according to Freddie Mac.  That is the lowest rate since the mortgage company began keeping records in 1971.  At this rate, the interest one would pay on a $400,000 mortgage would be $18,320 per year, a little more than $1,500 per month, and that $1,500 is tax deductible!

2. At-cost price tag

The award-winning builder of Newport Cove, New American Homes, will build a custom home AT COST on Newport Cove’s estate or lakefront home sites as long as the buyer pays full price for the lot and begins building before October 1, 2010. This is a tremendous savings, particularly when one considers that it includes a beautifully designed and appointed coastal-style home offering the latest in energy-saving technology PLUS access to a fresh water lake, walking paths and open “green” spaces on land served by a state-of-the-art sewer system.

3. Recreation & quality lifestyle

A lakeside home in a planned waterfront community near Chicago offers multiple advantages including recreation and quality time with family.  Fish, swim, take out the boat moored in Newport Cove’s private marina on Bluff Lake. Simplify your life with a beautiful new home in a serene setting.  There’s never been a better time to capture that dream.

To learn more call: 847-726-2727 and visit www.newport-cove.com

April Home Prices Are UP!

Home prices and sales rose in April, and that’s good news for home owners and home sellers.
The National Association of Realtors said yesterday that the nation’s sales of previously owned homes rose a surprising 7.6 percent last month. This is the best showing in five months and far better than what economists had predicted. The Midwest did even better than most of the country. Sales here rose 9.9 percent.
The increase in sales sparked a rise in home prices. The median price for homes sold rose to $173,100, up 4 percent from a year ago

Chicagoland Getaway: A Day in Suburban Antioch

It’s a great feeling finding something new in somewhere old. Your getaway day can begin with a tour of custom homes at the Newport Cove waterfront planned community near Antioch on the Chain O’ Lakes. See quality craftsmanship up close. View the newest features in home design. Walk the pathways surrounded by natural prairie landscaping. Dangle your feet off the piers at the marina on Bluff Lake. If you lived here, you’d be just steps away from all of this and more.

After touring Newport Cove, you might want to visit the Infini-tea, a charming tea house/eaterie in nearby downtown Antioch. Tea is served all day long in a quaint, relaxing environment. More than 50 varieties of tea are offered from all around the world. At the entrance, open jars of tea are available for customers to take a whiff. The lunch menu includes gourmet soups, salads and sandwiches. Scones and other baked goodies are offered as well. Thirsty children can enjoy juices and smoothies.
Around the corner is a shop calledHannah’s “Where inspiration is always free.” This family-owned craft store has a paper department, a frame shop, candle center, custom floral and home décor. It carries name brands “Life is Good”, Vera Bradley, Pandora jewelry and women’s accessories. Card making, soldering, beading and scrapbooking are some of the classes offered here. For $12 on Friday nights, scrapbooking students get dinner, dessert, demos and lively conversation.

You won’t want to leave the area before visiting Pickard China, known as America’s oldest and finest china maker. Serving markets around the world, the family-owned business began operating in 1893. It has supplied custom china for Air Force One, Blair House and Camp David. Dignitaries including the Queen of England and the King of Saudi Arabia chose Pickard to produce exclusive fine china. You can visit the outlet store and factory museum to be enchanted by the history of such craftsmanship.

In each of these places, “Made in America” still reigns. An attention to detail, product quality and customer’s satisfaction is paramount. Enjoy your day!

Find Pleasure in Buying a New Home

When searching for a new home some people fall in love fast. For others anticipation builds. Avoid these potential trouble spots to keep your pleasure high throughout the buying process.

  1. Financing. Get your mortgage pre-approved. Talk with a professional loan officer and get a firm loan commitment. This can hasten the closing process, getting you into your new home sooner rather than later.
  2. The search. Find a trusted advisor. Work with a real estate agent you trust and who understands the market. Home buying is manageable on your own, but a realtor can give you insight and reassurance.
  3. Tax credits. Learn about what’s being offered. Currently, tax credits are being offered to new home buyers and existing home owners. These credits can take thousands of dollars off your federal tax bill. For answers to frequently asked questions: http://ow.ly/1uOx3
  4. Price. Evaluate what you’re really buying. You may not need a room for a home office or formal dining, so consider the efficient use of space. Also, short sales offered by banks on foreclosed properties may seem like a good deal at first, but buying a short sale is a long, involved process that delivers an as-is product often requiring major repairs and renovation.
  5. Decisions. Understand what you appreciate and what you can do without. Make a list of your priorities. Ultimately, the decision is yours. Don’t buy the wrong house for the wrong reasons.

Mix your joy in buying a new home with sound judgment and you’re bound to live there happily ever after.