Your Tax Exemption Booklet is in the Mail

Cook county has mailed out it's annual tax exemption application booklet. If you own a home you should see it in your mailbox in the next few days. The two most common property tax exemptions are:

1. The Homeowner Exemption, which entitles all Cook county homeowners who occupy their property to a portion off of their tax bill
2. The Senior Citizen Exemption which entitles Cook county senior homeowners (born prior to 1942,) who occupy their homes to a portion off of their tax bill.

This is especially important if you purchases a home in 2007 as you will need to re-apply for the exemption.

If you are entitled to either of these exemptions, simply fill out and return the form before April 23rd. If you have applied for the exemption in previous years and have not moved, you do not need to re-apply for either exemption.

For more information, you can visit the Cook county assessor's website.

Transfer taxes going up...now

You may remember that the city council voted last month to increase transfer taxes on the sale of property in the city of Chicago. Initially those increases were to be absorbed by the buyer but the council later voted to assign those increases to the seller. This increase will go into effect April 1st.

Here is a breakdown of transfer taxes as of April 1:
Sellers pay:
State and Cook County Transfer Taxes of $1.50 per $1,000 of PP
City of Chicago Transfer Tax of $3.00 per $1,000 of PP

Buyers pay:
City of Chicago Transfer Tax of $7.50 per $1,000 of PP
No State and County Transfer Tax

The Problem with McCain's Rhetoric

Republican senator and presidential contender John McCain weighed in yesterday on the economy in general and particularly the housing slump in particular. Most of this speech is standard stump speech material but I took issue with some of his comments, in particular how he characterized the millions of Americans that are facing foreclosure.

"I have always been committed to the principle that it is not the duty of government to bail out and reward those who act irresponsibly, whether they are big banks or small borrowers," McCain said.

It is easy to just right off those individuals and families in trouble as being "irresponsible," but the truth is not that simple. Many were sold a bill of good by their overzealous lenders promising loan programs that were literally too good to be true. I realize that some point, the consumer must exercise due diligence before signing but make no mistake about it: banks go through great trouble fine tuning their message to gloss over the ugly details behind some of their programs. When a crooked bank pressures the appraiser to inflate the value of a home so they can "get the deal done," most homeowners are none the wiser.

Government response to the housing slump must include tighter scrutiny of the lending industry.

Is the Chicago Market Stabilizing?

Today's Tribune article, "A Glimmer of Relief in Housing" does indeed offer some good news about the housing market.

While the number of sales has fallen by about 27% from last year, the prices were essentially unchanged. And a flat market is better than a declining market.

Sellers are getting the picture: if they want to sell, they have to price appropriately. That means they can say goodbye to the 6% or greater appreciation we have become accustomed to, at least for the time being. If you bought within the last few years, you might sell it for about what you paid for it but you will sell it.

So the "drop" in prices in Chicago is really just "not an increase," but it has the same effect. Buyers are starting to get motivated by homes that are more affordable.

There is a ray of sunshine in the market. Are you ready to move?

They're out there...

An article recently published by the Los Angeles Times states that, despite the housing slump, visits to real estate websites are actually up compared to a year ago.

"ComScore Media Metrix, which measures the digital world, reported that real estate Internet sites had almost 42 million unique visitors in January, a traffic increase of about 5% over January 2007. The audience for the entire Internet was estimated at about 184 million visitors, meaning those who visit real estate sites online made up almost 23%."

This would seem to substantiate that we are in what I have referred to as a "procrastinator's market." People are still interested in buying homes--even more than they were a year ago--they are just weary of what the market is doing. It's not just home prices either. The economy, the war, the election...all of these issues are contributing to the haze surrounding the decision to buy a house.

...but they are looking. Buyers are window shopping more than in the past and that's a good start. Let's hope that the ones that really are ready and qualified to buy decide to get off the fence.

The Best Time to Buy in Four Years

Finally some good news...

An article out today on CNN.com points out what appears to be a light at the end of the housing tunnel.  Simply put, because of falling home prices and favorable mortgage conditions, it is the best time to buy a house since 2004.   Key points of interest:

• "The Cleveland-based bank National City Corp. (NCC, Fortune 500), together with financial analysis firm Global Insight, revealed Tuesday that more than 88% of the 330 housing markets surveyed showed price declines and improved affordability during the last three months of 2007."
  

This is determination is based on measuring the ratio of a home's value (what it should cost,) to what the actual price is.   Also,

• "Soaring foreclosure rates have added inventory to many housing markets, depressing home prices further."

Just as--in the boom market--new construction homes will push prices upward for resales, the high rate of foreclosures & bank owned properties are having a slowing affect on all home in any given area.  While I wouldn't recommend a first time buyer target foreclosures necessarily (more on why later,) they will still see an advantage in lower prices all around.