It's not unusual for a developer to purchase a unit and take up residence in one of his developments. Buyers often consider that a reassuring sign of the developer's commitment to and pride in the project. And it often is.

Just as often, however, it's a tribute to the Internal Revenue Code's exclusion from taxation of up to $250,000 in gain on the sale of a principal residence (up to $500K for a married couple filing jointly) if certain tests are met. Even a novice accountant can allocate the costs of a project to maximize the tax savings. For a high-earning married developer paying taxes at a 35% marginal rate, that can translate to $175,000 in tax savings – enough to make putting up with a bit of guff from your neighbors worthwhile.

Given this kind of an incentive, it's also not unusual for a developer to be a serial live-in.

I was thumbing through an old copy of the New York Times Magazine recently and came across a short item about the U.S. Green Building Council's Leadership in Energy and Environmental Design certification process (better known as LEED certification). LEED has become the standard bearer for green design, making it pretty easy for developers to brand their projects as environmentally friendly by following a checklist of requirements.

The LEED scoring system still has some wrinkles to iron out. While it usually costs developers more money to jump through all the hoops that are necessary to obtain LEED certification, there's little evidence that a LEED-certified building will actually be more environmentally sustainable than one that hasn't sought certification.

Here's what the NYT had to say about LEED:

Developers end up having to bring in a small army of consultants and reviewers to approve every step… At the same time, if you’ve got the cash, LEED is an easy system to game. As critics like to point out, a $395 bike rack and a multimillion-dollar low-energy A.C. system both get one point. Nor does the point system consider regional particularities; two critics wrote in a 2004 paper that “water conservation is more of a priority in hot, dry climates, yet the U.S.G.B.C. awards the same number of credits for water conservation in Seattle as in Phoenix.”

Some other criticisms in the NYT piece are that the LEED process doesn't take into consideration the life cycle of buildings and the maintenance they will require down the road, and that the system puts forth "proscriptive requirements" that discourage innovation.

The U.S. Green Building Council is responding to criticism, and they're set to modify standards in January. According to a press release, "points will be allocated differently and reweighed, and the entire process will be flexible to adapt to changing technology, account for regional differences and encourage innovation."

What's the benefit of having a single governing entity like the U.S. Green Building Council? Is LEED certification even important anymore?

Joe Zekas has gone gray trying to convince real-estate professionals to market their properties on the Internet and with Web video, but for some reason, his appeals often fall on deaf ears. Today I found at least one guy who seems to be on the same page as Zekas.

George Piuian, who has successfully rehabbed and converted a handful of buildings in Hyde Park and Woodlawn, has quietly used Web sites and videos to provide a more intimate look at his projects than typical virtual tours. Piuian says a friend of his creates the Web sites, shoots the video and ensures that his sites remain well-ranked on Google (which is how I found him).

The building he's currently marketing is a six-flat at 6209 S University Ave in Woodlawn. In the video, Piuian guides a tour of one of the units, describes the finishes, and brings us out to the back yard. It's pretty similar to some of the video tours of model units that we post on Yo, only embedded in a different kind of video player.

Piuian says he has posted condos on the MLS and watched them sit for more than four months before attracting any offers. With the Web sites, it's just the opposite.

Construction on the building at 6209 S University Ave was completed back in December, and five of the building's six units have sold. The last remaining unit is a three-bedroom / two-bath condo listed in the $220s. Piuian is offering $3,000 toward a down payment for the buyer who signs the contract before Aug. 1.

In her quarterly "Market Watch" column, Gail Lissner gives New Homes readers an overview of Appraisal Research Counselors' latest Downtown Chicago Residential Benchmark Report. In our July issue, Lissner writes about the "wait and see" approach many buyers are taking in the current housing market.

As reflected in our weekly survey of new-construction condominium developments located throughout the city of Chicago, fewer potential buyers are visiting sales offices in 2008 and even fewer are deciding to purchase. Overall, the number of potential buyers visiting new condominium developments each week in 2008 to date has declined 25 percent from the first half of 2007, with sales volume down more than 65 percent from the first half of 2007. Thus, while a smaller number of potential buyers are looking at their alternatives in the market, even fewer are ready to commit to a purchase.

The large drop-off in sales volume and potential buyer traffic occurred in August of last year, coinciding with the public awareness of the turmoil in the sub-prime and credit markets. At this point, market activity has not yet returned to its pre-August 2007 levels.

In 2008 and 2009, developers will complete construction on a record number of downtown Chicago condominium buildings, many of which started their marketing programs during the robust market conditions of 2005 and early 2006. While a total of 10,000 units are projected for completion in 2008 and 2009, 70 percent of the 2008 units and 55 percent of the 2009 units are already under contract to individual owners. Thus, the focus of the developers with 2008 building completions is to sell the inventory that is not yet under contract.

You don't have to wait for the July New Homes to hit magazine boxes, offices and sales centers next week in order to read the rest of Lissner's article. The whole thing is available here.

In case you didn't check the headlines this morning, Crain's published an article today about the number of foreclosure lawsuits brought against buyers in American Invsco projects over the past seven years.

According to the story, eight of American Invsco's downtown towers have accounted for 57.7 percent of all foreclosure cases brought against original buyers in all 76 downtown condo projects of 175 units or more since 2001. (For some perspective, note that Invsco has accounted for 12 percent of the homes sold in big downtown projects over the same period of time.)

Lenders have filed 232 foreclosure complaints in Cook County Circuit Court against original owners of condos in the American Invsco buildings, compared with 170 suits on units in the other 68 buildings in the comparison group, according to the court clerk's Web site. Expressed as a percentage of the number of condos developed by American Invsco, the rate of foreclosure cases at the developer's buildings is 8.0%, far above the 0.9% rate for other downtown projects.

Why do American Invsco buildings lead downtown Chicago in foreclosure cases? One explanation may be the role of investors, buyers who intend to flip or rent out their units rather than move in. Though most downtown developers courted investors during the recent condo boom, American Invsco crafted an incentive package with special appeal for investors. Not only did the developer offer to pay condo assessments and property taxes on its units for two or three years, in some cases it promised to pay rent as well, guaranteeing investors a revenue stream to help defray monthly mortgage payments.

American Invsco, which has reviewed the foreclosure-suit data and conducted its own analysis, says in a statement released through its public relations firm that the Crain's analysis creates "false and misleading impressions." The statement says American Invsco's analysis "presents a picture totally different from the one presented by Crain's."

Read the entire story at ChicagoBusiness.com or through our news feed.

Three letters: ABR.

The letters stand, of course, for Accredited Buyer's Representative, a designation sanctioned by the National Association of Realtors.

If you're considering working with a buyer's agent - and most of you ought to be if you're buying a home - you can check whether an agent who claims to be an ABR in fact holds that designation. I have a habit of checking when I see the ABR after an agent's name, and at least half the time the agent misstated his / her qualifications.

The Real Estate Buyer's Agent Council Web site makes it easy to check whether an agent is an ABR.

And now, let's hear your nominations for the most common lie in real estate.

Our copy of Appraisal Research Counselors' 1st Quarter 2008 Downtown Chicago Residential Benchmark Report only arrived last week, so we're just now getting around to reading its summary.

According to the report, 201 new and converted units sold in Chicago's downtown area - comprising the Loop, New East Side, Streeterville, River North, Gold Coast, Near North Side, West Loop, River West and South Loop - between Jan. 1 and March 31.

That number doesn't include information from the Chicago Spire, which just reported sales figures for the first time today. According to the Trib, Shelbourne Development Group has sold 352 (or roughly 30 percent) of the building's 1,194 units since marketing began four months ago.

Even if all 352 of the Spire's sales were made before the end of March, downtown would still be seeing the lowest number of first-quarter sales in the past 10 years. The previous low was in the first three months of 2003, when ARC recorded 775 contracts and reservations at new developments.

The 1Q '08 numbers also represent an 83-percent drop from the first quarter of 2007, the ARC report says.

The reasons for these figures? ARC suggests a number of factors, including lack of consumer confidence, concerns that the market still hasn't bottomed out, tightening lending standards and a simple lack of urgency to buy.

In the June issue of New Homes, columnist Don DeBat looks at several condominium projects that are moving forward thanks to foreign developers and investors. Financing dollars from countries such as Ireland, Germany, China and Kuwait may be the muscle that pulls Chicago’s new-construction market out of its slump, he writes.

Backed by Irish developers, Lexington Park Condominiums, a 35-story new-construction high-rise development on the northeast corner of Michigan Avenue and Cermak Road in the South Loop, appears to be on a sales and construction roll.

Sales at the 333-unit Lexington Park have surpassed the 50-percent mark, and construction has soared past the 14th story, noted Sean O’Sullivan, chief operations officer and director of Ireland-based Chieftain Group, the developer. Prices range from $237,900 to $727,900.

Chieftain has also signed a contract for a second South Loop development site at Harrison and Wells streets.

Read the entire column here.

Despite the gloomy national survey reports on falling property values that show lower home prices in 77 markets, prices of residences rose in 73 markets countrywide. According to columnist Don DeBat, Chicago's market was actually one of the good news stories of the past year.

Yes, fewer homes and condos were sold here last year than in 2007, but prices – especially in high demand North Side neighborhoods – rose, in some cases substantially, according to David Hanna, president-elect of the Chicago Association of Realtors.

Overall, the median price of condominiums in the city rose a solid 5.8 percent in 2007, although the number of units sold fell 10.4 percent. Meanwhile, the median price of single-family homes eked out a thin one-half of 1 percentage point rise, while the number of units sold fell 24 percent.

Read the rest of DeBat's observations online or in the May issue of New Homes, available now.

Looks like I wasn't the only one calling around about the Lofts at Lakeview Collection. Crain's reports this morning that Centrum Properties will turn the condos at Belmont, Ashland and Lincoln avenues into luxury apartments.

“The reason for the change is obvious — the condo market is soft and the luxury rental market for an infill urban deal of this type remains strong,” Centrum Principal John McLinden writes in an e-mail.

The six-story project, designed by Chicago architecture firm Hirsch & Associates LLC, now will include 130 apartments and 90,000 square feet of retail space anchored by a Bank of America branch and a David Barton Gym. The Chicago-based developer has yet to line up a loan for the project but plans to break ground this fall, Mr. McLinden says.

There you have it, sports fans. (Thanks to the sharp-eyed lakeviewer for the tip.)