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Chicago Housing Market Glance - Fall 2010

Extremely Low Mortgage Rates Spur Refinances, Lincoln Square Homes Sold Fastest This Summer, Chicago Real Estate Overview for September...

Extremely Low Mortgage Rates Spur Refinances

This September, average rates for 30-year fixed mortgages dropped to the lowest level all year, according to Freddie Mac’s Primary Mortgage Market Survey. It has inspired thousands of homeowners seeking more affordable monthly payments to contact their lenders about refinancing their home loans.

The first week of September saw 30-year fixed-rate mortgages at 4.32% and the following week only inched up 0.03 percent. Rates have been creeping down and are at levels we haven’t seen in decades. This has a lot of people interested in refis, but it’s not as simple as calling up your lender and asking for the deal of century.

Factors affecting a homeowner’s ability to refinance for better rates include tighter restrictions on lending, lower home values, and revamped appraisal guidelines. An article in the Chicago Tribune reported that only 60—70% of refi applications actually end up closing. Nowadays, borrowers are held to much stricter credit score qualifications than even sixth months ago. In many cases, lenders require minimum scores of 720 in order to grant a new loan rate. This has excluded a number of homeowners from being able to secure those amazing 4.3% mortgage rates.

Appraisals have also been major roadblocks for refinancers. Distressed properties have brought down the value of homes in many areas, which is not good when you’re trying to refinance for a certain amount. And there are new rules that limit direct contact between loan officers and appraisers to dispute a low-ball appraisal that prevents a borrower from getting a new loan rate.

Some homeowners who are underwater but still current on their monthly payments may qualify for government assistance through the Home Affordable Refinance Program, which benefits those with Fannie Mae loans. In July, the limit on the percentage you can owe on your first mortgage was raised to 125% in order to offer the program to a wider range of homeowners.

Lincoln Square Homes Sold Fastest This Summer

Lincoln Square is a small North Side Chicago neighborhood with a pretty hot real estate market. According to data from, the area had the shortest average market time among the city’s most popular communities for June – August. The average length of time it took to sell a home in Lincoln Square during the summer was just over 100 days. It beat out Lincoln Park and the West Town region (which includes the West Loop and Bucktown).

Statistics from the Multiple Listing Service (MLS) show that 98 units (this includes attached and detached properties) closed in Lincoln Square between June 1st and August 31st. The average market time was 107 days and the median home price was $241,250. The majority of listings sold were under $300,000, although there were a few million-dollar+ homes in the mix as well.

Why is Lincoln Square such a prime place to buy property right now? In addition to a wide variety of housing options, it has a thriving commercial center and strong community spirit. The neighborhood is known for its German ancestry and annual festivals (e.g. Oktoberfest). A touch of Bavarian architecture and establishments like the Chicago Brauhaus allude to Lincoln Square’s unique backdrop and cultural heritage. The inventory of homes for sale offers a lot for price points between $150,000 and $400,000. Most active listings are for condos and townhomes, although there are several dozen detached single-family homes on the market that have a median list price of $600,000.

Chicago Real Estate Overview for September

As we leave summer behind and head into fall, it’s a good time to assess what’s happening in Chicago’s overall housing market. The following data was collected by Altos Research, a company that provides information about real estate markets throughout the country.

As of September 12th, the average market time for all Chicago properties was approximately 186 days. The median price for a single-family home was a little over $196,000 and the median price per square foot was around $127. There are roughly 7,300 homes up for sale in Chicago and the Windy City is currently a buyer’s market with a Market Action Index of 13.38 (30 denotes a balanced market).

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