McHenry County, like most counties, is going through the routine of updating its land use plan and map. Land use plans and maps are intended to guide future growth in a community. McHenry County is currently operating on its woefully outdated 2010 plan and map. An attempt to do a 2020 plan was successful stopped through REALTOR® action when it became increasing clear that it did not favor a balanced growth approach. It sought a restrictive no-growth policy that was both unrealistic and impractical considering the county was one of the fastest growing in the country since the early 1990’s.

Starting from square one, a solicitation to all county residents interested in applying to be on the new county planning commission went out. Two were to be selected from each of the six county board districts. A county board member was to serve as liaison bringing the number of commission members to 13. In the end, we were successfully in placing two REALTORS® as well as adding an appraiser, a real estate attorney, and a retired developer. This institutional knowledge brought important depth and balance to the commission. This was also helpful in advancing key REALTOR® issues.

Like most land use planning processes, consultants were used, words on policy were minced, and public input was sought and given. In the end, the most critical and controversial element discussed and debated was the map. This truly is where were the rubber hits the road.

Historically speaking, 90% of growth in McHenry County occurred within municipalities—either through annexation or redevelopment. The remaining 10% occurred in unincorporated parts of the county, where residents sought larger tracts of land, privacy, and rural lifestyle. Like it or not, the county cannot legally object to municipal growth. It is important to take municipal plans into consideration and see what is realistic. Those factors may include, the age of the plan, competing municipal plans, and did the municipality over plan by simply plan up to the full mile-and-a-half of its planning jurisdiction.

Now with the remaining 10% environmental and agricultural considerations were taken into account. Was a particular area in prime agricultural soils? Was it over sensitive recharge areas? Did it include hydric soils or oak savannahs? If these were to all be used as constraints, than there would be no development options available in the county. This is where balance comes in play. Look at the surrounding land uses, the infrastructure, and examine how densities can be pushed a little higher to maximize land usage.

It is important to always keep in mind private property rights and market forces. Planners may have the best of intentions, but not always the best outcome. It is important to get involved in planning processes early and bring experts in the field of real estate to the table. This maximizes the success of the plan and its longevity.

As a REALTOR® you are a huge asset to your community. Housing plays a major role in economic development and you are the professional who can potentially be the “go-to” person for expertise and data that can help position your locality as a desirable community for business to locate and grow. Being part of your local chamber of commerce or economic development council are great avenues to share your expertise.

In order to be in this position you need to be the “expert.” While doing a comparative market analysis for a home is second nature, a comparative market analysis for an entire town is a whole other matter. Companies have this down to a science, but many local officials do not. Housing data and sales statistics are part of the picture, however some of the other things that companies look at are intellectual capital and the pool of labor in addition to the local competition. Having this information in the back of your mind helps when engaging both cities and/or potential businesses that may want to locate in your market area, some resources that you can tap into are:        

• Bureau of Labor Statistics  www.bls.gov
The Bureau of Labor Statistics can help you understand what the current labor demands may be in your area and help understand what the demand for housing might be.    

• U.S. Census Data – www.census.gov
Census data gives great demographic and housing data that can provide a framework for discussion of what future trends and opportunities could be.

• Economic Development Administration – www.eda.gov
• Illinois Department of Commerce and Economic Opportunity www.commerce.state.il.us/dceo
The Economic Development  Administration and Illinois Department of Commerce and Economic Opportunity can provide you research and data that can help you analyze the cost of new business development that can help you with both your commercial clients and also as a resource to your local community chamber of commerce or economic development council.

This type of background work and research is relatively easy and should only take an afternoon of your time. This is intended to be coupled with your background and expertise that you’ve acquired from your real estate experience in the community. This extra time and volunteer activity could result in extra business that will make the research and volunteer commitment pay off.

Thank you to REALTOR® Sherry Liang from Baird & Warner in Olympia Fields for calling me to clear up a fact from my HOME START + tax credit post.

According to the IRS, if you meet all of the requirements for the long-time homeowner tax credit, the law does NOT require you to “sell or otherwise dispose of your current principal residence to qualify for a credit of up to $6,500 when you buy a replacement home to use as your principal residence.”

Also, according to the IRS, you do NOT have to own a home at the time you make your new purchase but you “must satisfy the criteria for having owned and lived in a home as your primary residence for a five-consecutive year period that falls somewhere within the eight-year timeframe that ends on the date you buy the home on which you are claiming the credit.”

Here is a link to an updated flyer you can use with buyers who want to use the long-time homeowner tax credit. IAR also has a downloadable one-page flyer on the first-time homebuyer tax credit at www.illinoisrealtor.org/taxcredit.

If you have specific questions, contact a tax professional or the IRS at 1-800-829-1040. Also check out the extensive Q&A section of the IRS website.

Here it is, Wednesday morning and still no finals on either the Democratic or Republican candidates for Governor in these amazingly tight primary races.  So much for the thought of your vote not counting! 

IAR Advocacy funds were spent to educate voters on three home rule referenda in Sammons Point, Hometown and Midlothian.  The voters rejected home rule in Sammons Point and in Hometown and approved it in Midlothian in that community’s second effort to secure approval. We hope to have final election results, or perhaps an announced recount, in the Friday State Capitol Report, so watch for that emailed report. 

The Illinois House is in session today and committees are scheduled to begin work on 2010 spring session legislation.  IAR lobbyists will take off our political hats and put on our legislative hats as we head to the Capitol.  Senate back to join the House next week.

The nation’s official groundhog Punxsutawney Phil predicts six more weeks of winter. In some areas in Illinois the spring housing market has already started with the early birds looking to take advantage of the homebuyer tax credit that expires on April 30, 2010.

That means long-time homeowners who want to take advantage of the $6,500 tax credit (defined by the IRS as taxpayers who have occupied the same property as a principal residence for five consecutive years during the previous eight years) need to sign a contract to purchase a new home in the next three months. Note: The IRS does not require qualifying buyers using the long-time homeowner credit to sell their current home before purchasing their next principal residence. For more details, read FAQs from the IRS at www.irs.gov or consult your tax professional.

First-time buyers also have just a three-month window to purchase a home within the guidelines of the $8,000 tax credit.

The down payment often can be the biggest hurdle for first-time buyers. That’s why the Illinois Housing Development Authority (IHDA) created the Home Start Program with its package of low-interest rate mortgage and down payment assistance loans for first-time homebuyers and veterans. It also includes an option to use the tax credit toward the down payment by using IHDA’s Tax Credit Advance Loan.

 1. Home Start First Mortgage

• 30-year fixed-rate loan
• FHA insured
• Affordable interest rates
• 3.5% down payment required

 2. Down Payment Assistance Loan

• Provides 3% of the purchase price (up to $6,000)
• 0%, 10-year forgivable loan
• Only available with Home Start First Mortgage

3. Tax Credit Advance Loan – Expires April 30!

• Use the federal first-time homebuyer tax credit toward the down payment
• Provides 3% of the purchase price (up to $6,000)
• Only available with Home Start First Mortgage

Qualifications: Applicants must be a first-time homebuyer or a veteran, and have a minimum credit score of 620. Certain income and purchase price limits and debt ratios apply. The buyer must contribute 1 percent or $1,000 of the purchase price, whichever is greater, and complete required homeownership counseling. Borrowers should contact an IHDA-approved lender for program details.

REALTORS®, look to IAR’s tax credit page for a series of consumer flyers to promote the tax credit including:

• “Buy a Home, Get a Tax Credit” (info on both first-time buyer and long-time buyer credits)
• “Looking to Sell? Hurry to Get the $6,500 Tax Credit” (information on the long-time buyer credit)
• “The Home Start Program” 

Remember that elected officials at the federal, state, and local level make decisions that can impact the real estate industry. The Primary Election in Illinois is today! Polls will be open from 6:00 AM – 7:00 PM. For additional information contact your county election office.

Last year will be remembered as one of the strongest buyer’s markets of all time and in particular it was a good year for the first-time buyer who was able to take advantage of the low interest rates, more affordable home prices a large supply of homes on the market and the first-time homebuyer tax credit.

More than half of homebuyers surveyed in the 2009 Profile of Illinois Home Buyers and Sellers were first-time buyers, due in large part to the first-time homebuyer tax credit stimulus and increased affordability in home prices in the last year. The survey results released by the Illinois Association of REALTORS® (IAR) found 51% of buyers were first-time buyers, compared to 47% nationwide (a figure which has averaged closer to 40% nationwide since 2001). When asked about the primary reason for timing of the home purchase, 46% of first-time buyers said it was just the right time.

The first-time buyer trend should continue early in 2010 as the $8,000 first-time buyer tax credit has been extended through April 30 and expanded to include a tax credit for long-time homeowners of up to $6,500.

The median age of first-time home buyers in Illinois was 29 years old, while the typical repeat buyer was 45 years old. The median income was $64,400 among first-time buyers and $92,800 among repeat buyers.

Forty-seven percent (47%) of first-time buyers used Federal Housing Administration (FHA) financing compared to 33% who used a conventional loan to finance their home purchase. Out of all buyers, 33% used FHA and 55% obtained a conventional loan.

Find report highlights at www.illinoisrealtor.org.

With all of the changes taking place with the new license law, it is apparent that licensees are frustrated as to what to do next. The good news is that IAR is looking out for you to provide you with the most up-to-date information and we will work with you to take care of whatever education needs you may have. I know the transition requirements can be difficult to wrap your head around so I have developed a matrix showing the different variations of where you may be in the licensing cycle.

Just find the box that fits you and read the requirements that apply. Remember the transition courses will not be available until after 4/30/2011 so if your plan is to complete a proficiency exam, you can start taking your regular continuing education now if you are currently a salesperson and after 5/1/2010 if you are currently a broker.

[Click here to download the education matrix.]

If you aren’t sure where you fit in the matrix feel free to call or email IAR for assistance. And be confident knowing that when you take your education through IAR or your local association your records are secure and someone will be there to service those records.

We are your trusted education provider. Please contact either myself or Stacy Mahinda if you have questions or concerns

CElliott@iar.org (800) 752-3275

SMahinda@iar.org (800) 752-3275

In every election cycle in Illinois, there are a handful of municipalities which seek to become a “home rule” unit. Under the Illinois Constitution, a municipality that is not home rule is permitted to seek that status through voter approval in a referendum. (Municipalities that have a population of 25,000 or more are automatically granted that status.)

On the Feb. 2 ballot, there are three Illinois towns that are seeking to be home rule: Midlothian (Cook County), Hometown (Cook) and Sammons Point (Kankakee County).

In the past, REALTOR® associations have expressed concerns with several of the powers that are utilized by home rule municipalities. Such powers have included point-of-sale inspection of properties, unlimited ability to tax real property and a variety of regulations imposed on rental properties.

The Mainstreet Organization of REALTORS®, working with IAR’s Advocacy Program, will be informing voters in Midlothian and Hometown (with direct mail pieces) about these powers and the possible implications for real estate and property ownership.

The Kankakee County Association of REALTORS® will place an informational ad in a local newspaper which also informs voters in Sammons Point.

Some good news in this election cycle! IAR has learned of NO real estate transfer tax referenda in Illinois in the Feb. 2 election.

Under Illinois law, if a home rule municipality wants to impose a new transfer tax or increase an existing transfer tax, the municipality must get voter approval in a referendum. This law was passed by the Illinois General Assembly in 1996.

The Illinois Association of REALTORS® worked hard to get that law passed. Over the years (since the Constitutional enactment of home rule in 1970), REALTORS® have seen some abuses of home rule power in some municipalities. Here is a sampling of some of the more extreme abuses:

• In 1998, Highland Park enacted a $10,000 residential “teardown tax.” In 2005, Evanston passed a similar tax. In 2008, Highland Park considered increasing its tax to $25,000.
• With some pre-sale home inspection ordinances, the municipalities will require an escrow deposit from buyers of “AS IS” properties that have totaled as high as $40,000.
• Impact fees in several municipalities are imposed for libraries, police cars, fire protection equipment and “public art.” No statutory authority exists for these fees but these municipalities claim their home rule status as the authorization.
• Since 1988, pursuant to a home rule ordinance, a tenant in Chicago is entitled to “damages” and attorneys fees if the landlord did not return the correct amount for interest on the security deposit.

The tax credit stimulus and low interest rates have helped to reduce housing inventories through the end of 2009 while half of Illinois counties reporting also showed median price increases in December, up from 40 percent of counties in November—all good signs that the Illinois housing market is stabilizing.

According to the Illinois Association of REALTORS® latest report, statewide total home sales (which include single-family and condominiums) in December 2009 were up 20.1 percent, totaling 8,197 homes sold compared to December 2008 sales of 6,823 homes, marking the fourth consecutive month of year-over-year sales increases statewide. The median price in December 2009 was $152,000 down 1.9 percent from $155,000 in December 2008.

In the Chicagoland area, sales were up the full second half of the year, although sales of foreclosed homes and short sales—a situation where the homeowner owes more than he can sell the home for on the market—are still exerting downward pressure on prices.

Economist Geoff Hewings with the University of Illinois Regional Economics Applications laboratory says in his forecast: “The continuation of positive changes in annual sales data recorded in the last three months of 2009 is forecast to continue through the first quarter of 2010 and there is evidence to suggest that median prices might be starting to inch upwards.”

“In 2009, we saw demand primarily for lower-priced homes from first-time buyers in addition to short sales and sales of foreclosed homes,” said REALTOR® Mike Onorato, GRI, president of the Illinois Association of REALTORS® in the report. “There is opportunity now for the move-up buyer to take advantage of the tax credit that ends April 30 and lower mortgage interest rates, which many analysts expect to rise by mid-year.” 

Here is a snapshot from the IAR December data released today for total home sales (single-family and condominiums comparing December 2009 to December 2008):

• Illinois home sales ↑20.1%
• Illinois median price $152,000 ↓1.9%
• Chicagoland PMSA home sales ↑33.1%
• Chicagoland PMSA median price $183,000  ↓10.4%
• City of Chicago home sales  ↑39.8%
• City of Chicago median price $210,000  ↓10.6%

Half of Illinois counties reporting in December had both sales AND median price increases including these:

• Champaign County sales ↑16.3%, median price ↑20.7% to $157,500
• Logan County sales ↑20.8%, median price ↑14.1% to $85,000
• Rock Island County sales ↑1.2%, median price ↑5.2% to $87,550
• Sangamon County sales ↑24.2, median price ↑33.0% to $128,000
• Tazewell County sales ↑3.0%, median price ↑1.6% to $126,950