Remodeling or Building? The Time May Be Now.

Owners,

It might not be a newsflash, but the construction industry is slow, and the Wall Street Journal points out that you might be able to get more for your renovation or construction dollar now.

The article includes some good tips for saving money on your renovation or build. While most of these ideas will save you money in any market, the current climate may yield especially low prices and high values:

1. Get multiple bids
2. Don't select on price alone, check with the Better Business Bureau and references, and be wary of bids that are "too low."
3. Confirm that the builder has experience with your project type, i.e. compared to new construction, renovation is a different animal
4. Ask for a discount, but be prepared for a "no"
5. Apply for available tax credits, especially for energy efficient improvements

Be aware that the biggest hurdle your project will face in the current economy is financing. Determining a realistic budget upfront is paramount.

Despite the slowdown, the best designers and builders may not be discounting prices much or at all. This does not mean you are not getting a value from them at this time; think: exceptional quality and attention. During the boom, a firm might have tackled a dozen (or more) jobs at once, but now they may only have a couple. This means, when you call or ask questions, you will be heard.

If you are unsure of the steps you need to take, the best place to start might be to speak to an architect or designer. Their network and connections should help you navigate your project successfully.

For more information on available Energy Efficient Tax Credits: click here.

---

Andrew C. Wilson is an architect licensed in Illinois and New York, a LEED accredited professional, and principal of [1016] Architecture in Chicago.

[1016] Architecture is ready. Are you?
Let us know: Think about it, comment below, then:
Check out [1016] elsewhere on the web: Facebook, eHow, SlideShare

Combining Architecture and Real Estate Services

Finding and Renovating a Dream Home: A Case Study

About six months ago, while in the middle of a search for a new Chicago home, a (then potential) client approached [1016] Architecture principal Josh Canale, concerned about the quality of service he was experiencing from his buyer's agent.

Josh offered some house hunting tips from an architect's perspective, such as these and these, and the client nodded and said thanks.

Apparently, frustration continued to mount, because after several weeks, the client contacted [1016] again, this time for real help. The services and advantages that this client experienced with us en route to a dream home show the value of [1016]'s full service model, including:

• Representation in the buying process by [1016] Principal Josh Canale, a licensed real estate agent with Chicago architecture, building code, and zoning ordinance expertise
  
• Full market data research support via our collaboration with Jameson Real Estate
  
• On site design collaborations allowing the client to envision what each potential property could become, rather than being bogged down by what it was
• Increased leverage at the negotiating table due to full knowledge of code and zoning issued of desired improvements
  
• Multiple offer negotiation assistance
  
• Closing administration and assistance
  
• Documentation and measurement of existing conditions of purchased real estate
  
• Execution of design and permit drawings including client design review packages, sign offs, and professional certifications
  
• Acquisition and expedition of required building permits via City Hall
  
• Recommendation of multiple, qualified General Contractors for the renovation work
  
• Pricing evaluation and negotiation with various contractors, ensuring maximum value for the rehab expenses
• Potential discounted building supplies via [1016]'s trade relationships with well-known suppliers resulting in further savings
  
• Construction observation service to help make sure the design is executed correctly
  

In short, we helped the client obtain a "not-quite-perfect" condo in a great location at a great price, then, with the vision for the property already discussed, assisted with the execution of the renovations to make it exactly what the client wanted. This particular property wasn't in need of as much work as a Chicago fixer-upper or foreclosure, but we can help with those, too.

For this busy client, the continuity of a single point-of-contact and combined [1016] real estate/architecture expertise provided value in addition to straight discounts via negotiation and trade pricing. [1016]'s interest in the overall success of the project, including quality, budget, and schedule, did not end at the closing table like a typical real estate agent: we serve our clients to the end of construction.

For private clients and potential real estate investors, [1016] is more than just another architecture company, and Josh Canale is more than a typical real estate agent. Better service on both fronts comes by combining expertise.

Even if you don't require of all of the services in this case study, you can benefit by contacting [1016] Architecture to discuss your project, or fill out our contact form.

---

[1016] Architecture is ready. Are you?

Let us know: Think about it, comment below, then:

Check out [1016] elsewhere on the web: Facebook, eHow, SlideShare

Chicago Home Prices: A Moody Crystal Ball

Want to look into the future of home prices in Chicago? From Forbes.com

"Moody's Economy.com provided Forbes with a housing price forecast for the country's 40 largest metropolitan statistical areas (or metros)--geographic entities defined by the U.S. Office of Management and Budget for use in collecting statistics. The forecast predicts the percent change in home prices over one year, three years and five years, using data from the S&P/Case-Shiller Home Price Index. In the MSAs for which Case Schiller does not publish numbers, Moody's used a weighted average of metropolitan divisions within those areas.

Chicago, IL

Percentage Change:

1 Year, 2009: -16.31%

3 Year, 2009-2012: 1.49%

5 Year, 2009-2014: 14%"

Full Forbes story: click here.

So, on a metro area level, this calculation estimates that it will take five years for median home prices to get back to January 1, 2009 levels. Doesn't really sound exciting, but this is a macro indicator. Obviously, each property needs to be considered independently within this context. If you are in the market, your buyer's agent should be able to help you determine this. Check out this article with our Top Five Tips for selecting a buyers agent, if you aren't working with one already.

Price vs. Value
More importantly than price, however, is value. In other words: is any given purchase a good deal? or: Is the Chicago market still overheated?

Inside the Brackets believes the best way to understand housing market value is relative to median income (HP/MI ratio). This ratio tracks the comparison of housing prices in a given area to how much people typically earn there. Each area has a historical norm, and some are more stable than others. Especially when compared with other large metro areas, Chicago's historic ratio has been relatively consistent, with little volatility.

According to the New York Times, Chicago's historic norm for housing costs around 2.0 times median income. As of April 2009, this ratio sat at 2.5 according to this Interactive graph. The exact numbers are of relatively minor importance, the true meaning of the stat is the ratio.

What does this mean?
With an HP/MI at 2.5 in April, this meant housing prices would have to fall about 25% to get back to historic value levels (assuming negliegable income growth). If prices "only" fall the Moody's projected 16% this year, it means housing (in aggregate) still will not be as affordable as it usually is in Chicago.

So, even though Moody's projects a market price bottom in the next 12-24 months, value indicators like HP/MI may still indicate that prices are a little high historically. This only serves to reinforce the importance of evaluating the individual property and opportunity it presents within the market. In other words, even though prices are down, you can't just pick a house at random and get a great deal (a/k/a value).

What can you do?
During times like this, people who make careful purchases will come out ahead in the long-term. People who make careful purchases, as well as careful improvements to a property, will come out well ahead.

1. Get a buyer's agent who knows your market to help you determine a home's real value.
   
2. Invest wisely in properties where you can add value via appropriate improvements.
3. Keep in mind that even though it's a buyers' market, it's still not like shooting fish in a barrel.
   

---

[1016] Architecture is ready. Are you?

Architecture and Real Estate

Let us know: Think about it, comment below, then:

Check out [1016] elsewhere on the web: Facebook, eHow, SlideShare

On the River 2009

Last month, [1016] Architecture was one of many great sponsors of On the River 2009 in South Bend, Indiana. The event was a huge party thrown on a riverfront urban lot which was converted into a beach by 18 truck loads of sand. This year, over 3,000 people attended, and all proceeds benefitted the South Bend Center for the Homeless.

Check out some of Matt Cashore's photos of the festivities and consider attending this great event next year.

---

[1016] Architecture is ready. Are you?

Let us know: Think about it, comment below, then:
Check out [1016] elsewhere on the web: Facebook, eHow, SlideShare

New [1016] Website

The newly redesigned [1016] Architecture website was launched today.

Check it out: [1016] Architecture

The new site was built around the following four goals:

1. Make it easier for all visitors to understand the client types we serve
2. Make it easier for potential clients to discover if we have services that fit their needs
3. Stress the value of integrated real estate and architectural services
4. Facilitate simple, free consultations and project inquiries

Let us know how we did. Comment below or send us an email.

---

[1016] Architecture is ready.
Are you?

How to Find a Buyer's Agent: Top 5 tips

If you are shopping for real estate in today's market you can and should expect more from the real estate agent (or Realtor®) helping you shop. Trust us, there are plenty of agents that would love to have your business. Don't just settle.

These are Inside the Brackets' top 5 tips for selecting a buyer's agent.

#5: Don't pick the first agent that avails his/herself:
It may seem simple, but it is important to understand that you are not obligated to work with the first real estate agent that reaches out to you, especially if you are like 80% of shoppers that start their search on their own on the internet (and we know you are). Inside the Brackets recently spoke with a house-hunting couple that used the internet to find a property they were very interested in putting a bid in on, and then scheduled a showing by clicking on an agent link on the internet listing page (not the listing agent), only to find that "their agent" seemed more interested in closing the deal than getting them a good price.

#4: Real estate is local, so should your buyer's agent be:
There is no point being loyal to the agent that sold you your current house if you are interested in relocating to a different market. Their knowledge and service will not translate unless your target market is very near your current one. Best to ask him/her nicely for a list of referrals in your target market. You can then start with a short list to interview.

#3: Don't sign a blanket exclusive agreement with a buyer's agent
An exclusive agreement that covers a certain period of time will lock you into working with a buyer's agent no matter how you find the property you are interested in buying. Ask instead to implement a property-specific agreement so that you are committing to work with the agent on certain homes, but not all. This is more flexible for you, and should be reasonable to most buyer's agents.

Some agents will try to tell you that because (in most states) the seller doesn't pay any sort of commission, it won't cost you anything to sign a blanket exclusive agreement. This is technically true. However, because house-seekers have so much access to online property information, an exclusive agreement is a non-starter because buyer's agent value should be added rather than contractually obligated. If a buyer's agent tries to push you into an exclusive agreement, it should send up warning signs about his/her intention to truly help you find and negotiate the best deal.

#2: Low volume = high attention
This one is simple, but often overlooked. You should ask a potential buyer's agent how many clients they are currently representing. If it is more than five, there is reason to think that they may not be able to give you the attention you expect and deserve. If the agent assures you he/she has a refined customer service model, despite representing 20+ buyers at a time, be sure you are comfortable with the other agents or assistants that you will be dealing with during your hunting and transaction experience.

#1: Seek professional knowledge beyond typical agents
In most states, any licensed real estate agent can represent a buyer. It is up to you to figure out how to get the most value out of the service. Our #1 tip is to ask the agent what makes them different. Their answer should concentrate on differentiating knowledge and service. Some agents just passed their state exams. Others are licensed in other professions as well. Others have real estate investment experience in a given market. These additional licenses and perspectives help ensure you get the most from your agent.

Who will get you the best deal and give you the most confidence when writing offers to buy your first home or your next investment property? Ask the right questions.

If you have additional questions, send us a comment below.

---

If you are shopping for real estate in Chicago, consider contacting [1016] Architecture principal Josh Canale for questions on buyer representation.

Jameson Real Estate is one of the largest real estate companies specializing in Chicago real estate.

---

This post was inspired by a more generic article found on Yahoo! Real Estate:
Full text of the Dian Hymer article: Be Picky When Picking a Real Estate Agent.
Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author of "House Hunting: The Take-Along Workbook for Home Buyers" and "Starting Out, The Complete Home Buyer's Guide."

---

[1016] Architecture is ready.

Are you?

Do we NEED Mainstream LEED?

Do we need LEED® to be mainstream? Inside the Brackets thinks not.

On the previous growth of LEED:
In his GreenBiz.com email newsletter, Rob Watson, a USGBC Board Member, explores the idea and consequences of LEED pushing into the mainstream:

About five years ago when we were wrestling with the phenomenal growth of
LEED, I came across a book by Geoffrey Moore that changed my life. Entitled
"Crossing the Chasm," Moore's book introduced me to the concept of market
composition and segmentation . . . it also scared me to death.

"Chasm" woke me to the fact that the 100 percent to 200 percent annual
growth we were seeing in LEED at that time was nothing compared to the frenzy
that awaited us if we "got it right." You see, 100 percent growth against a
small number is still a small number, but 50 percent growth against a big number
is a big number indeed.Moore argues that the Innovators and the Early Adopters
are fairly forgiving folks compared to the Early Majority segment of the market.

The titular so-called chasm refers to the performance and expectation gap
between products that succeed in the Early Adopter market compared with products
that exceed in the Early Majority market. Innovators and Early Adopters are
willing to put up with quirks and foibles of products that the Early Majority
will not tolerate.

As green buildings penetrate the Early Majority market, expectations of
performance and cost are becoming quite high.In order for green to succeed, any
gaps or holes in products' and buildings' performance must be plugged...

Consistent with the USGBC's commitment to providing excellent service --
for those smugly snarking, consider for one moment that in the year 2000 only
about 2,000,000 square feet entered the LEED system and in 2008 LEED had 2
BILLION square feet come in, and then ask yourself when was the last time you
handled a thousand-fold increase in anything with grace -- the
organization is beginning an intensive dialogue with users of the system to
determine how it can be improved from an operational perspective. So, while LEED
is firmly into the Early Majority market in the United States, 2 billion square
feet represents less than 5 percent of the global market.

On the continued growth of LEED:
Inside the Brackets is, on one hand, very glad that LEED is growing so fast it can hardly contain itself. We don't like the idea of Mr. Watson making excuses for the shortcomings of the system during expansion, but we appreciate the dialogue for improvement. We are building an architecture firm around the design ideas that LEED and other green building rating systems espouse, so [1016] has a vested interest in exposure of the USGBC/LEED brand.

On the other hand, we posit that at a certain "tipping point" (to use a buzz word) we don't need LEED. Let us be more specific: we don't need LEED to grow so large as to certify 50% of the built square footage in the global market.

Once upon a time, the ideas, building practices, and materials that LEED sought to call attention to were progressive. The LEED designation meant a building's design and construction were truly "outliers" (another buzz word) and worthy of showcasing. Now, a combination of many factors, including the work that LEED has done, have raised the awareness of green and high-performance building to a much higher level. Municipalities are codifying sections of LEED standards and incentivizing LEED buildings with reduced permit fees or expedited approval... in other words, they get it.

LEED should be focused less on certifying more square feet, and more on progressing the dialogue of green materials and policy. Growing so large as to certify 5% of existing market is quite an accomplishment, though one not without growing pains. Growing larger than that threatens LEED's continued relevance by making a commodity of the designation and rendering the added expense of administering the checklist for any given building a waste of money.

Conclusion:
Inside the Brackets is not saying that LEED is dead or pointless. (Full disclosure: Andrew Wilson, [1016] Architecture Principal, is a LEED Accredited Professional, and [1016] Architecture is a USGBC Member Firm.) We are saying that LEED and the USGBC should stick to the cutting edge, progressive green design that brought it to where it is today. In our opinion, this is the spirit of LEED. After all, the "L" stands for "Leadership," right? We think aiming to certify more than 2-3% of the built square footage in the world dilutes the brand and speaks more towards greed than green.

What say you about the explosive growth of the LEED certification? Should LEED stick to the cutting edge? Drop a comment to let us know what you think.

---

Full article text for the Green Biz newsletter.

---

The U.S. Green Building Council (USGBC) is a 501(c)(3) non profit that developed the LEED (Leadership in Energy and Environmental Design) Green Building Rating System.

The LEED® (Leadership in Energy and Environmental Design) Green Building Rating System is the nationally accepted benchmark for the design, construction, and operation of high performance green buildings.