Wednesday, December 22, 2010

10 Real Estate Predictions for the New Year

10 Real Estate Predictions for the New Year

RISMEDIA, December 22, 2010—

The start of a new year is often a time of reflection, as well as a time of anticipation for the future. It’s no different for real estate professionals, many of whom have weathered the recession and are now optimistic about 2011.

From the return of new construction to the creation of healthier homes, the following are 10 residential real estate trends they see for the coming year:

1.) Building is back: After three years of little to no new development, John Wozniak of Wheaton, Illinois-based J. Lawrence Homes said the builder is excited about 2011. “After a couple of very challenging years, the market for new-construction housing is showing signs of life. Slowly but surely, homes are selling and new properties are breaking ground, such as the two communities we opened this year in Lynwood and North Aurora,” he said. “We’ve had encouraging sales and I believe they point to an uptick for 2011.”

2.) Apartments continue to thrive: If there has been one bright spot over the past few years in the real estate industry, it has been the rental market. “People have realized the many benefits of renting, from having more flexibility with your housing commitments to a higher level of finishes and amenities. And, this demand will continue to outpace supply,” said Steve Fifield, president of Fifield Cos. “Appraisal Research reports that Chicago’s Class A downtown apartments are at a nearly 95 percent occupancy rate, and those numbers will continue to stay very strong for 2011.”

3.) Opting for established: The mega-communities in the exurbs are a thing of the past, said Brian Brunhofer of Meritus Homes. Instead, 2011 will see builders move toward smaller neighborhoods or pockets of homes in established communities. “Close-knit communities with respected homeowner associations, mature landscaping and neighbors waiting to greet you – that attractive quality of life is going to appeal to buyers much more in 2011.” Seconding the movement toward established communities is Jeff Benach of Lexington Homes. “Buyers are looking for a safer investment for their home purchase,” he said. “We won’t see them roll the dice like in the past on a fast-growing town in a far-out suburb. They want a proven area with access to retail development and employment corridors. They don’t want to wait for the surrounding area to be built. They want everything already in place,” he said.

4.) Make it modern: Chalk it up to “Mad Men” or simply a pendulum swing in taste, but either way transitional and warm-modern design will be prevalent in 2011, said Brian Goldberg, a partner in LG Development Group. “Our clients are looking for a cleaner approach to the style of their homes – more mid-century and less traditional with a warm and tailored aesthetic,” he said.Ray Hartshorne, principal of Hartshorne Plunkard Architecture, agrees. “From the single-family side, our clients are gravitating toward modern design instead of strictly traditional, that is simple, clean line exteriors and open floor plans that are comfortable for the family and versatile for entertaining,” he said. “In the multi-family sector, now more than ever, we are seeing an interest in contemporary-themed and luxurious interior design for lobbies and common areas.”

5.) Buying for the long term: The Census shows the average person moves about 11 times, but Jim Chittaro, president of Smykal Homes, predicts that number will slowly decrease. “Thankfully, the idea of a home as a short-term moneymaker is essentially gone, so when people do buy, they’ll do it with the intention of staying put for closer to 10 years rather than two to three,” he said This means people will be studying floor plans more closely, to ensure the home will grow with them, Chittaro continued. “Buyers want to be sure the home will suit their needs not only now, but down the road, whether they plan to expand their family or prepare for kids to leave the nest,” he said. “Floor plans that can adapt to lifestyle changes with flexible features like second family rooms should do well in 2011.”Brunhofer agrees that more buyers will be looking for a home for the long haul. “It’s not just floor plans that buyers are going over with a fine-tooth comb,” Brunhofer said. “Our buyers are very careful about school districts. They want to know they can send all of their children to a school with a proven track record and not have to relocate a few years down the road to ensure a good education.” The shift to long-term buyers will also put long-term builders in the spotlight. “People are hesitant to buy a home from a builder or secure a mortgage from a lender they don't perceive to be well-established,” said Benach. “Buyers want to know their builder is committed to them and the community, and that it’s not about making a quick buck or boosting a shareholder’s financial interest. That personal connection is really important.”

6.) Upping the ante on amenities: In 2011, developers will continue to create new and exciting amenities to differentiate their properties and keep them relevant in the marketplace, said Tony Rossi, president of RMK Management Corp. “Renters are looking for something special, like an outdoor grilling area or special events like dance lessons,” he said.But it’s not just enhanced outdoor spaces in apartments that will matter in 2011. Benach thinks condo and townhome buyers will also place a higher importance on outdoor space in the coming year, especially those who live in an urban setting. “People may realize they don’t need to live with as much square footage inside their home, so to compensate they’ll want a place to call their own outside their home,” said Benach.

7.) High-tech takes over: Running your home entertainment system, appliances and lighting from a centralized control panel is old news. Going forward, we’ll see more homeowners want a smart phone app that can control their residence remotely, noted Goldberg. “Each year, the demand increases for home technology that makes homeowners’ lives easier,” he said. “We’ll get to a point, and some of our clients are almost there, where homeowners can leave work and by activating an app on their phone have all of their home electronics queued up when they walk in the door – the oven is preheated, lights come on and a TV show turns on when motion sensors recognize they’ve walked into the room. It may sound like a movie, but some of this technology we can build into homes now.”

8.) Smaller homes stay the course: The average size of a new home decreased for the first time in decades from 2008 to 2009, and that trend will continue into 2011, said Benach. “This trend is fueled by first-time buyers with smaller budgets, requiring smaller homes,” he said. “New buyers will have to be more conservative with their mortgages and will need to pay a higher percentage for a down payment, which means they’ll need a home with a smaller price,” he said. “People won’t be buying more than they need. So to meet their needs, we’ll see builders continue to trim the size of their homes and look for new ways to make square footage work harder.”

9.) Green and gorgeous: As the green movement continues to grow, high-end builders and developers have found ways to make homes both green and gorgeous. “The old mind set was that a green home couldn’t also be stylish and sophisticated. It was as if the two concepts were mutually exclusive,” said Hartshorne. “But new products and forward-thinking design have proved that today’s homeowners can have both. Also, building a green home doesn’t have to break the bank. We are constantly being introduced to attractive, sustainable building materials that are more cost effective than in the past.”

10.) Healthy homes: When you consider a study by the National Institutes of Health that found the number of people with allergies is as much as five times higher than 30 years ago, the trend toward building homes with a healthier environment will also gain ground in 2011, said Goldberg. “Indoor air quality, low VOC paints and adhesives, and all-around healthier materials are becoming more and more of a concern for people building homes – especially for those with children,” he said. Rick Croce, from Wheaton-based Smykal Renovations, said this trend applies to existing homes, too. “Due to the economy, many people have decided to stay put in their existing home, which means they’ll be investing in changes to make it look better and live healthier,” he said. “We expect to be pricing out more jobs that include installing HVAC systems with better filtration, using low-VOC materials and even replacing old doors and windows to safeguard against exterior pollutants.”

Monday, December 20, 2010

Christmas Is a Time To Give

As we approach Christmas 2010 and the upcoming New Year 2011 there is excitement, anticipation and memories to be made that will last a lifetime in the upcoming weeks. For many, celebrating Christmas is a time to reflect on childhood memories and to create and make new lasting memories with your friends or for your own family, children or grandchildren. It’s a time of joy, and a time for family and loved ones.

For me and others, it’s this time for family but also a celebration that dates back thousands of years to celebrate the birth of Jesus Christ. For others that are not religious or follow Christianity the Holiday means other things. Each is entitled to their own faith and traditions and I am not one to pass judgment.

I do however want to comment on what I feel can be shared by all regardless of faith and that is the great joy that can be felt by giving to others. As I get older, each year holidays like Christmas become more and more special to me. I love to sit back and watch my nieces and nephews dive into their gifts with reckless abandon and smiles from ear to ear! They tear away the wrapping paper in a blink of an eye and to watch their eyes light up is the best feeling I can describe. It takes me back to those days as kids when me, my brother and sister would wake up at the crack of dawn to run downstairs and see what gifts were under the tree, then run to mom and dad’s room to wake them up so we could get to those gifts!

Now as I grow older, I also realize that for all of the wonderful memories I’ve been blessed with and continue to look forward to making each year, there are also those less fortunate. I try to do my part to help where I can including buying gifts for toys for tots and recently for a name-less single mother with three children from my church that has requested help this Christmas to bring smiles to her children, but do I do enough? Not hardly. I’m certain I could do much more but knowing that I can help even in a small way put a smile on a face of someone feels good. I want to challenge you to keep the joy of giving as a focus this year and share the neat poem written below that sums it all up!

The Joy of Giving
John Greenleaf Whittier

Somehow, not only for Christmas,

But all the long year through,

The joy that you give to others

Is the joy that comes back to you;

And the more you spend in blessing

The poor and lonely and sad,

The more of your heart's possessing

Returns to make you glad

Tuesday, December 14, 2010

Positive News for Chicago Area

Fewer Homes Underwater! For those of you not privy to our real estate terms, this means that fewer home owners now owe more, than the home that they own is worth.

For the Third Quarter of 2010, the number and percent of homeowners in the Chicago area who owe more on their mortgages than their homes are worth fell. This was the third straight decline, according to a report from CoreLogic. However, the report may be due to homes going into foreclosure rather than price gains but we see this as positive news regardless.

The the third quarter 22.3 percent of home in the Chicago area or 324,741 homes were underwater which was down from 22.7 percent.

What does this mean for the big picture? It may not signal any real breaking news that will catapult the real estate market or build much optimism to help us rebound from 2000 prices but we'll take it! Simply put, any news like this is better than the alternative and we need to keep our heads up and realize that despite tough times, the sky is not falling and things will improve.

I read in a book written from Dale Carnegie last night this quote from Marcus Aurelius...."The happiness of your life, depends upon the quality of your thoughts."

I love this quote and it can be summarized that if you think happy thoughts, you are more inclined to be happy. If you think negative thoughts or fearful thoughts, you most likely are living your life patterning those thoughts.

Keep this in mind as you look towards a great 2011 and success and happiness for the year ahead!

Monday, December 6, 2010

Advantage Realty Group Blog: Thinking of Being a Landlord or Investor? Underst...

Advantage Realty Group Blog: Thinking of Being a Landlord or Investor? Underst...: "Hello and thanks for reading my blog! If you are not a regular follower of this blog, please subscribe to it today. You'll be glad you did a..."

Thinking of Being a Landlord or Investor? Understanding Cap Rate is a Must!

Hello and thanks for reading my blog! If you are not a regular follower of this blog, please subscribe to it today. You'll be glad you did as I routinely share many useful tips for your home, tips on investing, and updates on the real estate market locally and nationally.
Today, I am going to discuss with you how to calculate capitalization rate and why this is a must when investing in real estate.

In order to invest in real estate in income producing properties you must have a method in determining the value of the property you're considering buying and by utilizing the tool of calculating cap rate you can quickly weed out homes that may or may not be a good investment.

So what is cap rate?

Definition: Capitalization rate defines the percentage number used to determine the current value of a property based on estimated future operating income. In other words, taking the net operating income from an apartment complex and dividing it by the capitalization rate would yield the approximate current value of the complex.

The capitalization rate would be determined based on an appraisal and/or the cap rates of similar properties that have sold recently. By taking another apartment project that sold recently, determining it's net operating income (NOI), you would divide the income by the sold price to get the cap rate.

When I review homes, I personally with some exceptions look for properties that have cap rates of 10% or better. For me, this guarantees that once I put money down and purchase the home, that I am immediately cash flowing. Many investors will be happy with less, for me its a number that I try to stick to and have found success.

The Cap Rate is computed by taking the rental net operating income (NOI) and dividing it by the property's fair market value (FMV). The higher the Capitalization Rate is the better.

Cap Rate - Practical Use #1
You can use the Cap Rate to value your property. Let's say that your property generates $10,000 of annual net operating income. Your real estate agent tells you that the Capitalization Rate in your area is approximately 4%. That would mean that the approximate fair market value of your property is $250,000 ($10,000 / .04).
Cap Rate - Practical Use #2
Let's assume that you are looking at investing in two properties. The first property has a projected NOI of $20,000 and an asking price of $500,000. The second property has a NOI of only $10,000 but an asking price of $110,000. Which one would the Cap Rate suggest is a better investment? That's right, the second property since the Cap Rate is 9% ($10,000 / $110,000) versus 4% ($20,000 / $500,000).

Hopefully the above has helped you both understand the benefit of understanding what cap rate is and how to determine what it is for your own properties or others that you are considering investing into.

Want additional information or assistance in finding a great home? Contact me direct for a free consultation where we will work on a personal plan for your own success!

Wednesday, December 1, 2010

Bob Hudetz of Advantage Realty Group Bone Marrow Donor for Leukemia Recipient!

Rock River Valley Blood Center helps man donate stem cells
By Mike DeDoncker

I wanted to share the below article as it speaks of the wonderful life that my business partner Bob Hudetz may have saved through the act of being a bone marrow donor. He's extremely proud to have been a match for a person in need and I hope you share in the great news that his selfless act may have just saved someones life :)

Have a wonderful day and thanks for reading our blog as usual!

Posted Nov 28, 2010 @ 09:19 PM

ROCKFORD — Somewhere, an anonymous patient was waiting Tuesday for Bob Hudetz’s appointment at the Rock River Valley Blood Center to be over.

That’s because when Hudetz was finished with the four-hour procedure to extract stem cells from his blood, a courier would immediately fly them to the 64-year-old woman who would receive a transplant to treat her acute myelogenic leukemia.

“It’s cutting-edge stuff, and, of course, it doesn’t happen here every day,” said Jennifer Bowman, the blood center’s public relations and marketing manager.

Hudetz, owner of Advantage Realty Group in Naperville, became a part of a national marrow donor registry two years ago when a Neuqua Valley High School student needed a bone-marrow transplant and he joined a drive to find a match for the student.Hudetz wasn’t a match for the student, but in July, the blood center’s marrow donation coordinator, Julie Tilbury, contacted Hudetz to tell him he was one of 10 potential donors for the woman fighting leukemia.

“Apparently, they need the perfect match to have this person to be able to accept my stem cells,” Hudetz said, “and, then, earlier this month Julie called to say I was the perfect match, that there was an urgent need and could we get this done.”

In the procedure, the stem cells are extracted from the white cells of the donor’s peripheral blood.“It’s the most common way that we do marrow transplants,” Bowman said. “Most of them are from an adult donor.”

Holly Lindquist, the blood center’s automated collection coordinator, said blood is drawn from one of the donor’s arms and the blood passes through a machine that separates the cells with a centrifuge. The machine saves the white blood cells, and the red cells and plasma are returned to the donor into the other arm.

“When somebody said ‘bone marrow transplant,’” said Hudetz, who sat comfortably with both arms covered by small blankets, “I used to think that’s painful. It’s as easy as giving blood.”

He also said the test he took to become part of the national donor registry was a simple, painless swab of the inside of his mouth.“Of the people who need these transplants, of those who get it, it’s like an 80 percent success rate,” Hudetz said. “People should get in the registry because, if you’re the match, you can save somebody’s life.”

Staff writer Mike DeDoncker can be reached at 815-987-1382 or
Copyright 2010 Rockford Register Star. Some rights reserved