First-Time Homebuyers Shell Out More for Upgrades

While first-time homebuyers are facing certain challenges entering the housing market, that doesn’t mean they aren’t spending on upgrades to the homes they end up owning.

According to a recent report by Houzz, first-time homebuyers in 2016 dropped more than ever on renovations, spending an average $33,800. Homeowners overall spent an average $60,400.

First-time homebuyers aren’t starting with small changes, either—in fact, many have taken on remodeling four rooms at once, including more involved projects like bathrooms and the kitchen. Most, as well, are focused on outfitting their new homes with smart home technology.

Other key findings include:

  • Large Renovation Scopes Continue: Homeowners on Houzz renovate multiple rooms at a time, with recent homebuyers tackling 3.5 rooms on average.
  • Higher Spend for Living Quarters: Average investment in living spaces, such as living or dining rooms increased 11% in 2016 compared to 2015.
  • Increase in Credit Card Use: Use of credit cards to fund renovation projects increased in 2016 compared to 2015 (23% vs. 21%, respectively), and is even higher for first-time buyers (39%).
“Younger and cash-constrained first-time buyers are responding to the low inventory of affordable homes by purchasing properties that require more than just cosmetic upgrades,” said Nino Sitchinava, principal economist at Houzz, in a statement on the survey. “Not surprisingly, we are seeing their spend on home renovations increasing significantly in 2016 and expect this trend to continue through 2017.”

That lack of cash for a more expensive home could explain why first-time homebuyers rely more on credit cards to finance renovations than other homeowners, according to the survey. Ninety-one percent of homeowners overall fund renovations, at least partially, with cash. Eleven percent fund them by taking out a loan, mainly a home equity line of credit (HELOC).

First-timers are also having trouble keeping renovations within budget, with 47 percent of those surveyed reporting it challenging to stay out of the red. They are, however, willing to ask for help, being just as likely as other homeowners to hire a professional.

Chicago homeowners can expect higher property tax bills this year

As a part of a record property tax hike plan passed by the Chicago City Council in 2015, property taxes are being increased once again on Cook County homeowners. According to the Chicago Tribune, Cook County homeowners can, on average, expect to see an increase of 10 percent in their second installment of bills for 2017.

 The hike in 2017 is the second of four years of planned consecutive increases to help shore up the city’s police and firefighters pension shortfall. However, the Tribune reports that roughly three-fifths of the funds collected from this year’s property tax increase will go towards Chicago Public Schools contributions to the Chicago Teachers’ Pension Fund.

While the Windy City’s financial outlook is certainly troubling, Chicago homeowners generally pay far less in property taxes than those in suburban Cook County and collar counties. However, Cook County homeowners are in for two more years of property tax increases—which over fours years is expected to contribute over $500 million to Chicago’s pension crisis. The hundreds of millions being raised are certainly helpful; however, the property tax increase is far from a comprehensive fix for the problem.

In its recently published series of reports under the title “The Tax Divide,” the Tribune explores and highlights the inequity in property tax evaluations throughout the county. The Tribune reviewed more than 1.4 million sales since 2003 and found that the assessor’s office has for years continued to overvalue homes in south and west side neighborhoods, while undervaluing homes throughout the wealthier North Side.

CTA moving ahead with ambitious Red/Purple Line modernization plan

While the Chicago Transit Authority (CTA) commemorated the 125th birthday of the city’s ‘L’ system this week by rolling out a pair of historic trains from its Heritage Fleet, the agency is also looking forward to the future. According to a release issued this morning, the first phase of the $1.9 billion Red and Purple Modernization Program (RPM)—the single largest capital improvement undertaking in the CTA’s history—is moving forward.

 Phase one will see four of the oldest Red Line stations rebuilt as well as the construction of the controversial Red-Purple Line Bypass also known as the Belmont Flyover. Designed to unclog the 100-year-old junction near Clark Street where Red, Purple, and Brown Line trains awkwardly overlap, the estimated $570 million project would see average ride times improved by just 25 to 85 seconds.
CTA
CTA

While critics have labeled the improvements in commute times as marginal at best, the ability to add up to eight additional Red Line trains and more express service during peak hours has been touted by the CTA as the primary benefit of the bypass. Increasing capacity is a major priority for the city as ridership along this corridor is expected to increase at least 25% over the next two decades. Rush hour ridership is already up 40 percent since 2008.

Though matching funds from the federal government for the project were temporarily cast into doubt following November’s election, the city did manage to secure a $1.1 billion commitment from outgoing President Barack Obama in January. The City of Chicago also created its first ever transit-specific tax increment financing (TIF) district to fund the massive infrastructure project.

According to today’s announcement, the CTA will narrow down the pool of potential candidate firms later this year. A formal Request for Proposals (RFP) will then be issued in 2018. The city will select a winning bid based on pricing, experience, and “other factors.” The first phase of RPM is expected to create 5,700 local construction jobs.

5 things to do in Chicago this weekend

From biking in the nude at the World Naked Bike Ride to getting sandy at a North Avenue Beach party, here’s what we’re up to this weekend.

Book lovers unite!

Get your nose in a book at the Chicago Tribune Printers Row Lit Fest this weekend, June 10-11. Considered the largest free outdoor literary event in the Midwest, the two-day showcase will feature a slew of literary workshops, demos, author panels and discussions, poetry readings, a Lil’ Lit Park for the kiddos and book signings. Head to Chicago’s historic former bookmaking hub, Printers Row, for your weekend lit fix. The events are free, but you can purchase a fest pass for $50, which includes advance-ticketing access, express book signings and a one-year Chicago Tribune digital subscription. Tickets: printersrowlitfest.org

Show up, bike naked

Bare it all (or not) at the World Naked Bike Ride this Saturday, June 10. The annual clothing-optional bike ride helps promote positive body images and raises awareness about people-powered transport. Check-in for the scantily clad ride begins at 6 p.m. in the West Loop and runs from 8-11 p.m. Specific route details are announced the day of the event. From body paint to underwear to your birthday suit, put your pedals to the pavement with thousands of other Chicagoans for a good cause. Free. Details: chicagonakedride.com

Boots and cats and boots and cats

Fill up your fanny pack for a weekend of EDM beats at Spring Awakening Music Festival, happening June 9-11. Head to Addams/Medill Park (1301 W. 14th St. 312-746-5086) to dance the day away to the music of the worlds’ top DJs. Whether you’re into techno, dubstep, house music or EDM, you’ll find what you’re looking for at Spring Awakening. Headlining acts for the three-day fest include Armin van Buuren, Datisk, Diplo and Alesso. Single day general admission ranges $79-$99, but 3-day passes are sold out. Tickets: springawakeningfestival.com

Totally beachin’

Settle into summer with a shoreline party at North Avenue Beach (1600 N. Lake Shore Drive 773-363-2225) this Saturday, June 10. Feel the sand between your toes at the fifth annual Beach Slap Volleyball Tournament & Beach Party, happening from 11 a.m.-5 p.m., and enjoy the skyline views from one of Chicago’s most popular shores. Your wristband for the event includes six drink tickets (valid for Bud Light), access to sponsor tents, beach games like giant Jenga and life-sized beer pong, contests and a DJ. Admission is $10-$30, and you must be 21 to enter. Tickets: eventbrite.com

‘The Mummy’ … again?

If you want to get out of the sun, sit in the dark and watch Tom Cruise battle evil in his umpteenth action-packed film—”The Mummy.” The loose remake of the 1999 original, which starred Rachel Weisz and Brendan Fraser, hits theaters Friday, June 9. Cruise plays Nick Morton, a soldier who accidentally unearths an evil, entombed Egyptian princess and must stop the resurrected monster before her furious rampage leaves London in ruins. There will sadly be no Fraser cameo.

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