RISMEDIA, August 23, 2010—After a year of bouncing on the bottom, the Chicago housing market is on the verge of a sustained recovery. That’s the opinion of Jim McClelland, the founder of Mack Industries, Inc. in Tinley Park, Illinois, a home redevelopment company specializing in bank-owned properties. Mack owns or manages approximately 400 houses in Chicago’s south and west suburbs. Its $40,000,000 portfolio makes it the largest home redeveloper in the Midwest if not the country. Mack is currently purchasing 2-3 REOs per week.
“Existing home sales in Chicago are in their first phase of a healthy upward move, first in volume which we are witnessing now, and by early next year in a modest increase in sales prices,” says McClelland, who noted these key indicators:
• Recent measures show that apartment vacancy rates are falling despite only modest improvements in the local employment picture. Rents are also increasing.
• Sales of Chicago area condos and single-family homes have increased for 12 months in a row, according to the Illinois Association of Realtors. June 2010 sales of Chicago condos and single-family homes were up over 27.2% from June 2009 sales. (9,085 homes sold compared to 7,140 homes sold in June of last year).
• In the first half of 2010, the largest increases in new foreclosures occurred in the Chicago’s middle- and higher-income communities. While analysts have read this trend as a harbinger of more bad news, McClelland says it translates into a foreclosure wave that has largely run its course.
• Record low mortgage rates have eliminated the need for lower home prices. Yet higher rates wouldn’t jeopardize the housing market, notes McClelland, since they would signal growing confidence, and the prospect of home price appreciation.
• Almost 29 percent of all home mortgages in the Chicago area were underwater during the year’s second quarter. Disappointing, yet an improvement from the 31.8 percent level recorded in the first quarter (Zillow).
• Home prices in the Chicago area dipped 1.5 percent in May from a year earlier, but rose 1.2 percent from April, according to Standard & Poor’s/Case-Shiller. The year-over-year decline was a major improvement from the annual decline reported in May 2009, when prices sank 17.5 percent.
McClelland also is seeing increased interest from outside investors in purchasing rental houses from his large inventory. Mack recently introduced a turnkey Real Estate Cashflow and Appreciation Program or “RECAP” to meet this demand. Nationally, about twenty percent of home buyers are investors.
“There is a more positive attitude today among Realtors, investors and their clients. Ultimately that’s what is needed for a housing recovery to begin in earnest,” said McClelland.
For more information, visit www.MackCompanies.Net. Or call 708-532-9243.