Chicago's 'Foreclosure Capital'
Why Real Estate Reality TV Is Still Booming

Chicago's 'foreclosure capital'

In Chicago, one 50-story high-rise, "The Sterling Private Residences" at 345 N. LaSalle St., has earned the dubious distinction of being the city's "foreclosure capital," according to a Crain's ChicagoBusiness.com article.

Within the past three years, lenders have filed 95 foreclosure suits -- for loans totaling $40 million -- for units in the building, a large number of which are  investor-owned, Crain's says. About one-third of the suits involve defendants who own several units in the building, the article says.

Many investors bought into the building (which was completed about six years ago) because of sweeteners offered by the developer. American Invsco offered to pay property taxes and assessments for as long as two years and to rent out investor-owned units, Crain's says. But these owners saw  monthly payments soar when the enticements wore off, prompting a rash of foreclosures. As a result, resale prices in the building fell 17.4% from 2005 to 2007, Crain's says.

However, despite its current circumstances, with its good views and location, the building is expected to fare well in the long term, the article notes.

Is reality TV immune to housing slump?

Surprisingly, cable TV programs like "Flip this House" and "House Hunters" are still hot, even as the housing market gasps for air, according to the Associated Press. Could real-estate reality TV be immune to the housing slump? TV programmers, who "are like developers who plow ahead with new housing projects anyway," seem to think so, writes the AP.

Eight out of the top 10 series on the cable channel HGTV are real-estate related -- including "House Hunters," "Designed to Sell," "Sleep on It," "Property Virgins," "Divine Design" and "Buy Me," and the network says that it had its highest-ever January prime-time ratings this year.

TLC will air at least six new real-estate programs in the next year, the AP says, including "Date My House" -- where open houses are turned into "speed dating sessions," according to the cable network.

What's sustaining interest in these reality programs? Homeowners' worries about the value of their homes and the desire to increase that value, and the "life goes on" factor -- Americans' continued need to buy and sell homes as life circumstances and needs dictate, says Jim Samples, HGTV president, in the article.

However, the networks do realize that the continued housing downturn could sour viewers' interest in standard real-estate programming. In fact, "Date My House" -- which premieres April 5 at 8:30 p.m. on TLC -- likens matching a home with a buyer to getting married, which differs significantly from the flip-to-get-rich-quick theme of some other programs.

"Today, mortgages can last longer than marriages, so people need to be absolutely sure when making this huge commitment," Brant Pinvidic, TLC's senior vice president of programming, is quoted in a TLC press release as saying.

Franchisers look to spur sales

National real-estate brokerages are pouring money into marketing campaigns this spring in the hopes of spurring consumers to enter the housing market, according to USA Today.

USA Today notes that Century 21 is boosting its digital ad budget by 50% and that the franchise has launched a My Century 21 Open House Contest on social networking site YouTube.com that will run through May 9. Through the contest, home sellers and their agents can submit 75-second videos about themselves and their home for sale for a chance to win a grand prize of $21,000, plus HDTVs for both the seller and real-estate agent.

The RE/Max campaign's new message is that it's a buyer's market. Two other ads are aimed at sellers, with the message that RE/Max agents can "get the job done in this market."

Meanwhile, Coldwell Banker has created a marketing campaign centered around the portraits of its founders, Colbert Coldwell and Benjamin Arthur Banker. New TV spots for the franchise feature the portraits, plus voiceovers that combine humor with plugs emphasizing the firm's collective real-estate experience.

Foreign companies buy-up Manhattan real-estate

Instead of renting temporary quarters or paying for hotels, overseas companies are increasingly purchasing Manhattan condos for employees who must relocate there, writes Lily Hindy for the Associated Press.

Even when these relocations are for a short time period only, companies, many from Europe and Asia,  are opting to invest in the Manhattan market -- where the average price of a home was up 11% in 2007 from the previous year to reach $1.26 million. The alternative: shell out $200 to $300 a night for a midrange Manhattan hotel, says Ms. Hindy, who notes that the amount of property that foreigners are buying has doubled in New York from two years ago. She adds that a favorable overseas exchange rate is also spurring condo investment in Manhattan by these companies.

She says that in a many arrangements, foreign companies will purchase residential property in midtown or the financial district for $1 million apiece and then sublet them when they're not being used by employees.

Says one real-estate executive in the article, "The companies want to save money, but they are also interested in investing in the future, putting their money where they feel it's going to be safe."

Ms. Kim is a senior editor at RealEstateJournal.com.

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