The stock market`s roller coaster ride early this week provides a stark lesson in the fundamental value of real estate, according to some Chicago area builders.
They believe 1987, a year that began with dire predictions for the building industry because of tax reform, could end with an exodus from the stock market and into real estate.
”This market decline shows that real estate is still one of the best investments you can make,” said Norm Hassinger, president of The Hoffman Group, a leading residential developer.
”Stocks can be lucrative but also very risky, as the past week has shown. The stock market`s plunge will demonstrate the underlying stability of the housing industry. Hoffman has been in business 40 years, so we`ve seen many sharp swings in other investment instruments.”
Sheldon Lazar, president of United Development Homes said that, ”If this market downturn proves anything, it`s that real estate is still the smartest investment anyone can make-whatever their income.”
Richard Faltz, president of Primus Corp., termed the downturn ”a long over-due correction to a typically bull market. I think we will see a rebound and stabilization, and it may even give new support to the Dow.”
Major home builders such as Hoffman, United and Primus still offer below market in-house financing. Since they obtained loan commitments months ago, their financing is now ”locked in” despite recent stock market and interest rate gyrations.
Primus offers a 7.5 percent one-year adjustable rate mortgage (ARM) for homes at its Seasons Ridge subdivision in west suburban Montgomery and its Windcrest community in nearby Oswego. Buyers also can choose a 9.5 percent mortgage, which is fixed for three years.
United offers financing through the Illinois Housing Development Authority, available for a limited time only. Fixed-rate, 28-year mortgages at 8.35 percent are available at Brittany Place, a single-family home community in Bolingbrook, and at Spring Lake Country Homes in Aurora.
Hoffman Homes offers a variety of mortgages, including a 30-year fixed rate at 11.25 percent; a one-year adjustable at 8.9 or 8.25 percent; a three- year adjustable at 8.9 percent; and a five-year adjustable at 9.75 percent.
The special financing is available at 10 Hoffman communities, including Bloomfield Hills in west suburban Bloomingdale, and at Auburn Woods in northwest suburban Palatine.
