Posts Tagged ‘Midwest’

Energy Source is Blowing in the Illinois Wind

Wednesday, December 1st, 2010

Energy Source is Blowing in the Illinois WindBecause Chicago is home to approximately 80 wind companies, including corporate headquarters and turbine factories, the city is seen as a hub for the wind industry.   With plenty of farmland suited to wind turbines, Illinois has a law mandating that the state gets at least 18 percent of its electricity from wind by 2025.  Unfortunately, the state agency that decides the source of all of Illinois’ wind power has halted development of new wind farms and could hamper the state’s ability to use this resource for years to come.  The culprit is the Illinois Power Agency, which so far has not provided the necessary guarantees to facilitate new wind farm construction.  The rub is that the agency is compelled to buy electricity from the lowest-cost source to satisfy the wind-power mandate.

Unless the governor, the Illinois Commerce Commission or the state legislature acts to change the state’s renewable-energy process, few or no long-term contracts to build new wind farms will be granted.  In that scenario, the state will have to fulfill its renewable-energy requirement by purchasing credits from wind farms in other states such as Texas.  Created in 2007 to assure that ComEd and Ameren give customers the best possible deal, the Illinois Power Agency dictates where the utilities purchase their electricity.  Because the agency’s duty is to buy the cheapest electricity possible, it purchases wind power on the spot market or through short-term contracts.

Despite the Illinois Power Agency’s convoluted rules, the state is out-performing many others in terms of wind power.  The American Wind Energy Agency ranks Illinois 7th nationwide in installed wind capacity in 2009, and 14th for wind potential.  Howard Learner, an environmental law professor at Northwestern University, believes this is a make or break moment for the future of wind power in Illinois.  “There’s been recognition by everyone involved in the need for long-term contracts for new wind farms to support jobs in the state and also reduce pollution here,” Learner said.

Wealthy Chicagoans Return to Purchasing Upscale Houses, Condos

Wednesday, September 29th, 2010

High-end Chicago houses and condo sales are rising.High-end residential sales in Chicago rose – somewhat unexpectedly — during the first eight months of 2010. This is primarily a result of sellers reducing their asking prices and closings at some high-profile condominium developments.  Even with the uptick in sales, there’s still an excess of houses and condos on the market that likely will depress prices even more.

According to an analysis by Midwest Real Estate Data LLC, there were 452 single-family houses and 572 condominiums price at upwards of $1 million on the market as of August 31.  That represents an 18-month supply of houses and 21 months worth of condominiums.  James Kinney, Baird & Warner, Inc.’s vice president of luxury sales, said that a normal market is a six- to eight-month inventory.  “I think we’re in for many months of wading through inventory,” according to Kinney.  “The supply is going to continue to build until we see a turn in the job market.”

High-end single-family home sales rose approximately 24 percent in the first eight months of the year.  That totals 199 sales as opposed to 161 in the same time period of 2009.  Condominiums fared even better with sales rising 85 percent to 253 units, compared with just 137 a year ago.  Kinney said that the uptick can be attributed by the first closings at high-end developments like the Elysian Hotel and Private Residences and Ten East Delaware.

Even Jamie Dimon, CEO of J.P Morgan Chase & Company, has hopped on the bandwagon.  He recently cut the price of his tony Gold Coast mansion to $6.95 million – a 25 percent reduction from the previous $9.5 million.  Janet Owen, a broker at Sudler Sotheby’s International Realty who is the listing agent, said “They realize the market does pertain to their home, not just everyone else’s.  That’s why these properties are selling.”

Want Affordable Housing? Here’s Where to Find It

Tuesday, July 8th, 2008

Despite all the doom-and-gloom reports on the residential real estate market, there are some bright spots.  In several markets, housing has become surprisingly affordable to families earning a median household income of $61,500.  And there’s more good news.  Mortgage rates are again nearing the record lows of a few years ago; and family incomes jumped an average of a $2,500 between 2007 and 2008.

What are some of the markets most strongly impacted by this trend?

Indianapolis, IN – The largest affordable cities – Indianapolis, for example — tend to be in the Midwest.  More than 90 percent of all Indianapolis households have sufficient incomes to buy a median-priced $125,000 home.  During the first quarter of 2008, Indy ranked as the most affordable major U.S. housing market for the 11th consecutive quarter.

Stockton, CA: — The average single-family home price fell 35 percent to $230,800 in the first quarter of 2008, compared with $357,800 just two years previously.

Kokomo, IN: — Among smaller metro markets, Kokomo ranked well in terms of housing affordability during 2008’s first quarter.  A median-priced home in Kokomo is about $147,000.

Grand Rapids, MI: — Approximately 88.7 percent of homes sold were affordable, a 4.2 percent change from 2007.  A median-priced house in Grand Rapids is currently $132,100.

Youngstown, OH: — In this small city with a population of 82,000, the median sales price dropped 13.5 percent to $67,700 in just one year.

Silicon Valley on the Lakes

Tuesday, April 1st, 2008

One of the interesting drivers for new development may be the exchanges for futures and options which are seeing some consolidation.  A recent article in the March issue of Business Week Chicago profiles the acquisition of the Chicago Board of Trade by the Chicago Mercantile Exchange to form CME Group — a blockbuster deal that has created the world’s largest futures exchange.  Clearly signalling our increasingly networked economy, the new behemoth is now eyeing the New York Mercantile Exchange for an $11 billion takeover.  What does this mean for real estate and the larger economy? For one, an engine for the desultory tech sector in the Midwest.  Companies like OptionsXpress, an online broker, feed off retail futures, options, and back-end technology business generated by entities like CBOT, which does 79% of its beusiness electronically.  For the Midwest, which has struggled to incubate new technolgies in order to drive business tech growth, this may be the future.