There's no denying it: the housing bubble has definitely burst. And while there is still some speculation on how, when and why, most financial experts agree that the correction and balancing process has begun—though it will likely be long and painful.
There is enough pain to go around; pain for property owners, developers and investors. A decade ago, flipping properties was a national pastime; now just holding on to your property can be a challenge. And no one is exempt, says John A. Kilpatrick, the CEO at Greenfield Advisors LLC, based in Seattle. Back in June of 2007, he cited the link between increased foreclosures and local property devaluation. “The innocent houses that happen to be sitting next to those [foreclosed] properties are going to take a hit.”
Challenging times call for creative solutions, and a few savvy property management firms in Chicago have worked hard to find viable solutions to contain costs and recoup losses. Allowing condo owners to rent or sublet units remains a controversial option, but it is a trend that has taken hold in many areas, and has helped some associations keep their heads above water and their budgets balanced.
Wolin-Levin Inc., the property management firm for Shoreline Towers Condominium in West Rogers Park north of Chicago worked with that condo association to develop an aggressive plan to protect property values. Shoreline Towers is a 25-story, 378-unit condominium situated on the shore of Lake Michigan. This prime property had it all; location, restaurants, shopping, striking views of the city skyline...and units in foreclosure.
In an unusual—and gutsy—move, the association used reserve funds to purchase the foreclosed units, then rented them, rather than attempting to sell them in a down market. When the real estate market improves, the plan is to sell them outright—but in the meantime, the association can recover unpaid assessments and keep the building fully occupied.