John D Ambrogio

The “relocation business” may be down in Chicago - depending on how you spin the numbers.  As a transferee moving into or out of The Windy City there may still be some cause for concern.  Sellers wonder - “Will I sell my home in Lincoln Park?,” “Will foreclosures in The Gold Coast affect the appraisal on my home?”  On the other hand, I’ve seen some buyers come in with an entirely different set of problems.

We’ve had buyers who are ready, willing and able to buy homes in some of Chicago’s most popular neighborhoods, Wrigleyville, Lincoln Square, Streeterville, affected by their homes “not appraising out.”  As they say, it’s hard to catch a falling knife, so estimating the value of a home on a day to day basis in this market is a challenge for even the savviest appraisers.  (Note to relocation companies - Please use a LOCAL appraiser - Most of my experience with homes not appraising out have been with appraisers from outside the immediate market - and Chicago real estate has many many microcosms).

But despite what you may hear, the economy, globally and locally, still has many strengths.  This is NOT 1929 Ultimately, Free Market Capitalism will “save” Chicago relocation.  For Rubloff Relocation, the actual number of people we’ve moved has remained quite stable.  The difference is that this is the highest volume of renters we’ve experienced in recent history.  So all that money is simply sitting on the sidelines, waiting for the right time.  That’s a bitter pill for real estate agents, third party employees and the plethora of affiliated business to swallow — But the market will eventually straighten itself out in terms of supply and

demand, and as my friend and colleague Eric Bryn of Leading Real Estate Companies of the World told me - Get ready for a seat at the biggest real estate buffet in history —  Of course the first reservation at that table might not be ‘til 2010!But all of these renters are prime candidates in 2010 (and yes some in 2009) to jump back into the game.  If the Fed and the mortgage industry can keep rates modest, and if sellers and buyers can find a common ground, the market will return…..Like the phoenix from the flame.

John D Ambrogio

It looks like good old fashioned market economics has helped the real estate industry begin its crawl back to normalcy.  NAR reported last week that existing home sales (which would include single family homes, townhomes, condos and co-ops) has risen to a seasonally adjusted rate of 5.18 million, up 5.5% from August and 1.3% from September.Home prices fell 9% in the last 12 months, according to the report.  Lawrence Yun, NAR chief economist, said more markets are seeing year-over-year gains.

“The sales turnaround which began in California several months ago is broadening now to Colorado,
Kansas, Minnesota, Missouri and Rhode Island.”

In addition, the average mortgage rate for a 30-year fixed rate was 6.04% in September ’08 v. 5.38% in September ’07. For our neck of the woods – The Midwest existing home sales went up 4.4%, although they still remain 2.5% below a year ago. Why is this relevant for our relocation market?  By definition, relocating transferees are coming from “somewhere else” and that somewhere else is more likely to be domestic than international.  Increased affordability is a good thing for all markets, and is one of the important factors in reviving the industry.