Morning Minute: Homeownership still an integral part of long-term financial planning

More consumers believe that the housing market has turned the corner and many — 94 percent of those recently surveyed by Berkshire Hathaway HomeServices — say homeownership is important to long-term financial planning, the brokerage network reported in its latest Homeowner Sentiment Survey.

In other headlines:

FHA beefs up foreclosure prevention initiatives – HousingWire

New-Home Sales Tumble: Temporary Setback? -NAR Daily Real Estate News

Winthrop Harbor cuts development fees in effort to spur growth

Bigstock Photo

Too often, local governments view development as a way to pad government coffers.  Property owners are forced to come up with significant dollars in impact fees, special service area taxes, frontage fees, linkage fees, and the like in order to receive development approval.

Sometimes the fees are valid and used appropriately. Yet, frequently, local government officials view land use as a privilege, not a property right, and these fees are seen as the price paid in exchange for the “benefit” to build on one’s own land. The fees are too often implemented on loose rationales that any development will place a burden upon the community, and spurious figures are frequently used to calculate the perceived burden. Illinois Association of REALTORS (IAR) local Government Affairs Director Conor Brown previously detailed some egregious examples here.

Howard Handler

Some fees were adopted under legitimate pretenses but the justification no longer holds up. Few communities reevaluate the need and calculations of these once valid fees – they continue to charge these fees as if they are entitled to the money without justification.  Rare is the community that does, in fact, review its existing policies; the Village of Winthrop Harbor being one of them.

Situated in the far northeast corner of Lake County, Winthrop Harbor’s elected officials and staff took a hard look at some of their developer fees.  “They took a candid look– not just to ensure fairness – but because they understood that high development costs adversely impact property values and slow growth,” said REALTOR® Gary Powell (Cornerstone Realty Group, Winthrop Harbor).

Since adoption of its school impact fee ordinance, Winthrop Harbor, citing lower property values and declining student enrollment, repealed its school impact fee ordinance.  A couple months later the Village examined its sewer and water frontage fees, tap fees, and street frontage fees, and eliminated and reduced those fees due to reduced infrastructure needs. Combining all fee reductions, Pat DiPersio, Winthrop Harbor’s Community Development Director, says costs will be reduced by as much as $7,200; according to the REALTORS® Property Resource, the median estimated home value is $157,000.

Piero Orsi (RE/MAX Showcase, Gurnee), Mainstreet Organization of REALTORS (MORe) Lake County Government Affairs Committee chair added, “Winthrop Harbor deserves to be applauded.  What they did not only leads to fairer taxation, but it makes great business sense.  They are announcing to the real estate community that Winthrop Harbor is open for business.”

Special thanks to Pat DiPersio, Mayor Robert Loy, Trustees Kimberly Braden, Buddy Hargett, Robert Marabella, Dana McCarthy, Richard Robards, and Fritz Weiss for their forward-thinking leadership.

Morning Minute: Mortgage rates move lower this week

Freddie Mac reports that fixed mortgage rates moved lower with the 30-year, fixed-rate mortgage averaging 3.65 percent and the 15-year, fixed rate averaging 2.92 percent for the week ending April 23. Read the Freddie Mac news release.

“Mortgage rates fell slightly to 3.65 percent this week, positive news for potential homebuyers in the market this spring. Purchase applications in 60 of the 100 markets that MiMi tracks are up from the same time last year, including 20 markets that are showing double-digit increases. Reinforcing this positive momentum, existing home sales surged 6.1 percent to a seasonally adjusted annual rate of 5.19 million units in March, the highest annual rate since September 2013. Housing inventory rose 5.3 percent to 2 million homes for sale, but unsold inventory was little changed at a 4.6 month supply.” — Len Kiefer, deputy chief economist for Freddie Mac.

In other headlines:

KCM Blog Infographic: Existing Home Sales Skyrocket

New Home Sales Plunge 11.4% In March, But Rise Nearly 20% Year-Over-Year – Forbes

March Illinois housing data reports available in Spanish

Illinois home sales and median prices saw strong double-digit gains in March. Statewide home sales were up 13.1 percent compared to March 2014 and the median price rose 11.5 percent.

Share that information with Spanish-language housing data from the Illinois Association of REALTORS®.

You’ll find data snapshots for Illinois, the nine-county Chicago metropolitan area and the city of Chicago. Click here to find more March housing data, including a market forecast.

#IARMarketStats

Illinois home prices move closer to pre-recession levels

Illinois median home prices are nearly three-quarters of the way back to pre-recession levels when adjusted for inflation, according to a new forecast analysis from the University of Illinois Regional Economics Applications Laboratory (REAL).

The latest REAL market forecast looked at March 2015 median prices and adjusted them for inflation to get a clearer picture of what is happening with recovering home prices. According to the data, the current median price in Illinois is 79 percent of the 2008 median price when you factor in the rate of inflation. For the nine-county Chicago PMSA region, median prices are 74 percent of pre-recession levels.

“March was an excellent month for the housing market with robust growth in both sales and prices,” noted Geoffrey J.D. Hewings, Director of the Regional Economics Applications Laboratory of the University of Illinois.

According to Hewings, it could take 27-48 months for the Illinois market and 20-40 months for the Chicago PMSA market to be classified as fully recovered to pre-recession levels in terms of median prices.

Read the latest REAL forecast  | IAR’s release on improved March housing data