Chicago Condo Guide - Chicago Real Estate

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Now is a great time to invest in a Chicago condo!
While the Debbie Downers of the world are currently having a heyday bemoaning the ills of the current economic situation, investors are beginning to gain confidence that the market will turn upwards again, and are making investments in Chicago condominiums. Are you looking to purchase a Chicago condo?

Well, first of all, one of the smartest investment decisions you can make is to rent the condo before you buy it. How can your find out if the walls were built thick enough and if the management does a good job maintaining their properties? Through renting! When you rent, you will find out for yourself the quality of the surrounding neighborhood, how convenient parking is, and if there is noise from nearby freeways or airplanes flying overhead. You may be able to get a remarkably low price on a unit, but if average buyers do not want to live in that building because of problems with noise or safety, then you actually just made a poor investment.

In 2008, fewer than 600 downtown condos sold, leading property owners to grow more and more desperate to move thousands of unsold units. This has also meant that more property owners are willing to rent out their units, sometimes at really low prices! So if you shop around, you may be able to get a lease on a great property right now! Low sales has led many Chicao condo developers to find unprecedented and innovative ways to sell their condominiums. One really new method of selling these condos is by utilizing real estate auctions. For sellers of properties in large-scale high-rises who need to reduce the amount of empty units they have, auctions are a great solution.

Auctions offer benefits for both buyers and sellers. Buyers receive prices reduced by anwhere from $50,000 to $300,000. The current sluggish market makes it an excellent time for any investor to purchase a Chicago condo. In turn, condo developers are able to sell dozens of unsold units within an incredibly short amount of time. Also, auction sales draw attention to their buildings. However, auction developers are generally not turning much of a profit on these sales, but are simply cutting their losses.

Many condominium developers have noted that auctions are an unusual means to sell property, and are obviously not the seller’s venue of choice. Nevertheless, auctions are gaining popularity and will probably be utilized in the real estate market more and more, at least for condominiums.

Auctions do not work as well when it comes to selling condos that are scattered in different buildings throughout Chicago. But auctions will probably be used as a way for condominium developers to sell out their empty inventory, at least until real estate markets stabilize. In 2008, about $59 billion in real estate was sold at auction, which is an increase of around 23% from 2004.

The reason that many interested buyers have refrained from buying a Chicago condo already is because with an unstable market, prices felt too high to be worth the risk of investment. Auctions have really stimulated the Chicago condo market. When many potential buyers come to the auction, they see that there are many other people just like them willing to pay a certain price for a certain property. This helps reaffirm to buyers that the risk of investment is worth it, and that the property is easily valued at the price it is being offered at. For the last year or so, buyers and sellers have been at odds as to exactly how much Chicago properties are worth, and thanks to auctions, a compromise has been struck that encourages investors to begin to buy properties again.

This is a major step forward in the Chicago condo market. Once a few investors begin to buy condos, more sales will follow. Putting money back into the economy is exactly what needs to happen to end the current lull in the economy. However, some investors are still having trouble getting a loan. Banks remain wary of loaning out more than $400,000, and both investors and regular people looking to be able to buy a Chicago condo need to be able to get loans before the economy can start to pick up.

But if you have the cash, or have excellent credit and can get a loan, now is a great time to buy a Chicago condo. Interest rates are now lower than 5% for individuals with really good equity. And you can get incredible value for money on condominiums throughout Chicago. For instance, the Metropolitan Tower just drastically reduced their prices. This 30 story building is located on lakefront property right next to Lake Michigan. The building is centrally located in the city, right next to Michigan Avenue’s world-class shopping. The building offers a party room, fitness center, a sun deck and a 24 hour doorman. The tower has 245 units, only a dozen of which are still vacant. But for the units that are still left, prices have been cut by anywhere from $50,000 to $300,000!

If you are looking for a luxury Chicago condo, you have a wide range of choices, although units are now selling quickly, thanks to recently slashed prices. In the South Loop part of town, the Vetro is now selling its units for anywhere from $50,000 to $100,000 less than the previous asking prices. Just a few years ago, the South Loop was exploding with growth, and you were lucky if you could even find a good unit for sale at all! But now, this area of town has more unsold condos than any other neighborhood downtown. This is because for the last year, Chicago condo developers resisted lowering prices on these units. But after months and months of frozen sales, Vetro’s developer Thomas Roszak decided to put some of the units in his building up for auction.

The Vetro, which is 31 stories high, had only sold just over half of its 232 units. In the week before the auction, approximately 1,100 potential buyers visited the building. And then on the day of the auction, over 500 people were in attendance, and 45 of the buildings 100 empty condos were sold. Despite the fact that they were sold at a largely discounted price, the auction was still a success for Roszak, who sold more than $12 million in real estate in just under two hours.
Roszak himself explained that with the market being so lethargic, it is hard for Chicago condo developers such as himself to know what a fair asking price is. The auction was a good way for Roszak and other sellers in the South Loop area to find out how much buyers are still willing to pay for these properties. Since the Vetro auction, another development in South Loop called Printers Corner has also drastically reduced their prices, leading them to sell all 19 of the empty condos that had been available. Between these two buildings, over 100 condo sales have been made in six weeks, proving that there are still buyers in the marketplace.