Costs of living continue to increase, and a big-city lifestyle makes no exception. In fact, calling many of the country’s metropolitan areas home could cost you more than twice the national average of standard living. The ACCRA Cost of Living Index recently released the top 10 most expensive urban areas to live in, and New York City, San Francisco and California’s Orange County all made the cut. Chicago, however, down at #14, brings that Second-City lifestyle without wiping out much of your income.

In addition to lower living expenses, a Chicago home will cost you less than a home in most major cities, according to the Index. Compared with Chicago, here’s how much housing would cost in these major cities:

New York City: 213% more
San Francisco: 121% more
Los Angeles: 89% more
Washington, D.C.: 68% more
Boston: 18% more
Seattle: 16% more
Portland, OR: 0% more/less
Las Vegas: 0% more/less

The cost of owning a Chicago home or Chicago condo doesn’t quite rank among other noteworthy cities. Chicago real estate in the most exclusive buildings might only cost you the average price of a New York City home (about $1.1 million). Even Las Vegas, a city often thought to have all the hustle-and-bustle of a major city for a lower cost doesn’t offer any more value than a Chicago home.

Not to mention that Chicago can hold its own among the offerings of other cities. Buying a Chicago home might cost less, but the city is rich in culture, history, architecture, shopping, dining and a cosmopolitan lifestyle. Chicago is lucky to be home to a number of spectacular museums, along with many buildings that present some of the finest architecture in the country. You’ll also find upscale shopping along the Magnificent Mile, , first-class dining throughout every many neighborhoods and one of the best symphonies in the world—all of which can be found just up the block from the exquisite Chicago homes. And with luxury living so obtainable, you’ll have plenty left to enjoy it.

If you want to learn more about the opulent lifestyle Chicago offers, please contact agent Sheldon Salnick at (312) 264-5853 or email him at ssalnick@Rubloff.com.

Are buyers returning to the Chicago condo market? While the sales volume continues at very thin levels, there has been a recent uptick in sales activity as prospective buyers are sensing that pricing has now reached levels which are rather enticing. With the discounted pricing now being offered by sellers in the Chicago real estate market along with the first-time home buyer tax credit and low mortgage rates, buyers appear to be more confident in making purchasing decisions. In addition, the rise in the Dow since the beginning of 2009 has helped buyer psychology, as buyers are already witnessing a recovery in the stock market which could help the Chicago housing market.

Buyer Traffic is Up:

On a weekly basis, Appraisal Research Counselors surveys the sales and prospective buyer traffic in a wide range of new condominium developments throughout the city of Chicago, with many located in the Downtown and Near North Side submarkets. Notably, since the spring of 2009, there has been an increase in the number of people visiting these sales centers along with an increase in the number of new sales contracts being reported. On a year-over-year comparison, 2009 started out weaker than 2008, but has surpassed 2008 since May. In general, discounted pricing is playing a big factor in this increase in Chicago home and condo sales, as these buyers are price-driven, looking for the best value opportunities.

Average Buyer Traffic Per Development

The First Time Buyer is Back:

Based upon the transactions which are occurring, it is apparent that the recovery is starting at the entry level segment of the Chicago real estate market. This group of buyers is not burdened with an existing residence to sell, providing them with the freedom to purchase a Chicago home or condo. In addition, demand from first-time buyers is also being strengthened by the government’s first-time homebuyer tax credit, along with the availability of FHA financing with 3.5 percent down payments.

In general, the higher priced Chicago homes and condominiums in the market are experiencing less of this increase in demand; thus, this higher price segment of the market is still waiting for the “trickle up effect” which is beginning at the lower end of the market. With only 15% of the new development sales during 2009 achieved in luxury buildings ($500+ PSF) tracked by Appraisal Research Counselors Downtown Chicago Residential Benchmark Reports, the lower priced product is leading the market in terms of sales velocity. This trend is also seen in the statistics for the Downtown market from MRED LLC (the multiple listing service) with a mix of transactions including both Chicago new construction sales and sales of existing properties:

Condos and Townhomes 6 Month Close

At the current pace of sales for residences reported in the multiple listing service, there is approximately a one year supply of lower priced inventory (under $500,000), with a 1.5 year supply of the $500,000-$999,999 inventory, and a nearly 3.5 year supply of the $1,000,000+ inventory. Even within these price categories, individual buildings and individual locations continue to function independently, with some buildings and locations exhibiting stronger demand than others.

Wave of New Construction Activity Ending:

The Downtown Chicago housing market has doubled in size during the past 15 years, with the tremendous surge of new construction activity which has taken place recently. However, developers are no longer pursuing new development deals nor are lenders interested in financing new construction projects. While 18,500 new Chicago condo units have been completed since 2006 in Downtown, only 600 units will be completed in 2010 and less than 100 units are currently under construction for completion in 2011.

New Condo Unit Completions

We do not expect to see development occur again on any large scale basis in the near term, although the timing will depend upon how rapidly the current unsold inventory is absorbed. At the present level of sales velocity, this will be a slow process, with the Chicago real estate market now adapting to a more moderate level of sales activity than had been experienced during 2005-2007.

Currently, sales velocity is still slow and there is a sizable amount of Chicago homes for sale, including both new and resale residences. However, the supply of new inventory is now capped at what is already delivered or currently under construction, and supply and demand for housing will eventually return to more balanced levels. The Chicago real estate market conditions provide some excellent buying opportunities for informed and patient purchasers who are looking for a longer term acquisition.

For more information on the Chicago real estate market, please contact agent Sheldon Salnick at (312) 264-5853 or email him at ssalnick@rubloff.com.

This week, the Department of Commerce released housing data for the month of April, and while overall housing starts dropped by 12.8 percent since March to an annual rate of 458,000 new homes, construction of single-family homes were up 2.8 percent to 368,000.

This is the second consecutive month that single-family home starts saw a increase, which many see as a sign that the residential construction industry is starting to recover.

“With some of the best home-buying conditions of a lifetime now in place – including historically low mortgage rates, affordable prices and a first-time home buyer tax credit –   single-family builders are starting to see the light on the horizon as more consumers realize they can now obtain the home of their dreams,” said Joe Robson, chairman of the National Association of Home Builders, in a press release.

Furthermore, the issuance of single-family permits rose 3.6 percent to 373,000 units, which indicates that this upward turn will only continue.

According to the Wall Street Journal, economists believe that single-family construction data are the best way to determine the viability of the housing market. In addition, builders see new construction as a reliable indicator that the real estate market is bottoming out.

In contrast, multi-family home starts decreased 46 percent to 90,000, an all-time low, and permits fell almost 20 percent. Overall new-home construction dropped 21.4 percent in the Midwest.

The housing market hasn’t completely recovered, but these single-family home construction figures shed some light on an otherwise ominous picture.

To find out about new single-family homes in Chicago please contact Chicago real estate agent Sheldon Salnick by calling (312) 264-5853 or emailing ssalnick@rubloff.com.

1. Lots to choose from – Right now, the amount of available Chicago homes for sale is well above average. You’d certainly have your pick of the litter—a buyer’s dream. As the Tribune reported, almost 85,000 Chicago homes and Chicago condos were listed on the market as of early May, which doesn’t include for-sale-by-owner properties, builders offerings and foreclosed homes that haven’t been listed into the MLS yet. So if in the midst of your search you suddenly decide that black marble countertops imported from Italy are the only way to go—don’t worry—chances are you’d have more than enough options to choose from.

2. Oh, the savings – Sure it’s tacky to profit off of the misfortunes of others, but the current economic crisis has led to some amazing bargains in the Chicago real estate market. In March, the median price for a singe-family home in Chicago was $194,000, a decline of 22 percent from the previous year.

3. Time is ticking – Everybody and anybody is speculating when the downward fall of the market will end. While it’s hard to predict exactly when the Chicago real estate market will come back, recent data suggests that it’s on the rise. “For example, the number of homes under contract in west and south suburban areas was up 27 percent in March, the fourth consecutive month showing a year-over-year contract increase, according to the Main Street Organization of Realtors, which pronounced it an ‘upward trend,’” the Tribune said. So strike while the iron is hot and purchase a Chicago home before prices and interest rates go back up.

4. Holy tax incentives, Batman – Uncle Sam is giving deals for first-time home buyers who close on a primary residence before December 1. These buyers qualify for a 10 percent tax credit of the purchase price, up to $8,000. This extends to those who haven’t owned a home for at least three years. Information can be found at federalhousingtaxcredit.com.

5. Low interest rates - Low interest rates are rare, but in this economy, 30-year, fixed-rate loans are going for 5 percent. They’ve even gone as low as 4.8 percent in the last few weeks.

What about the luxury buyer? - While some of these reasons apply solely to first-time or mid-level buyers, luxury buyers can also get a great deal in the current real estate market. Although money is tight, jumbo loans (loans over $417,000) can still be negotiated through banks with a 25 to 30 percent down payment.

To get a great deal, luxury buyers who choose to be aggressive can negotiate with Chicago developers for new construction homes by offering the seller cash. Or, by eliminating the mortgage contingency in the initial offer, and by closing in 30 days or less. Buyers can get a luxury Chicago home at a much lower price with these types of negotiations, which sellers generally like. However, keep in mind there is some risks involved, so be sure to discuss them with your real estate agent and mortgage broker.

To discuss these types of negotiations contact Chicago real estate agent Sheldon Salnick by calling (312) 264-5853 or emailing ssalnick@rubloff.com.