Housing recovery...hype or the real deal? (Chicago, Naperville: for sale, real estate market)

[divakat]

I have been monitoring the real estate market for a few years now. The past few months there seems to be a lot more activity in the areas I am looking---mainly North Naperville, Glen Ellyn, Downers Grove. Anything nice and reasonably priced has gone under contract in less than two weeks and for more money. The articles I have read also suggest the market may have reached bottom in he Chicago area as of February. Do you think that his is strictly due to the low inventory issue?

[nikitakolata]

I have noticed the same thing. IMO, part of the problem is that people who want to move are not listing their homes because they don't think they can sell. My parents want to downsize and so they listed their house for sale not expecting anything to happen. Well, they got a contract after 2 weeks! Now they have no idea where they will move if the sale closes (the offer is contingent on the buyer selling their house so who knows if they'll ever get to closing anyway).

I've also had my house (in Chicago) on the market. I want to move to the suburbs, but there is absolutely nothing I like for sale right now. So, like my parents, I have no idea where I'll really go if the house does sell. I will probably end up renting somewhere month to month while we continue to look or build new. Since I listed the house in March I've seen places I like, but the good ones sell very fast and I'm not about to offer anywhere until our house is at least under contract.

I hope the market does pick up; I'd rather have to pay a little more for a place and just be able to move than be stuck where I am because I am sick of being in the city.

[divakat]

We are renting now but would like to buy next summer. I hope prices and interest rates stay low for the next year! So many baby boomers are waiting to sell, my parents included. Sometimes I feel like knocking on people's doors asking them when they are going to sell their house. So frustrating as a buyer right now with so little available.

[nikitakolata]

Originally Posted by divakat

We are renting now but would like to buy next summer. I hope prices and interest rates stay low for the next year! So many baby boomers are waiting to sell, my parents included. Sometimes I feel like knocking on people's doors asking them when they are going to sell their house. So frustrating as a buyer right now with so little available.

I have actually done that (almost). When I was looking for a condo, I wrote a letter and mailed it to addresses I was interested in purchasing. I ended up buying something that went on the market before my letters were probably received, but I don't think something like that could hurt in this market. Tons of people are simply afraid to even try selling unless they absolutely have to right now. It is frustrating as a buyer because there is nothing good out there to buy!

Personally, I am not worried about interest rates rising; I don't think rates are going to go up significantly. Prices may increase a little if the market really is recovering... but then again, they may not if a bunch of boomers suddenly decide to list. I don't think the market is appreciating quickly, regardless. If the worst is over, that's great, I don't think we're going to see 10% price appreciation or anything close to it, no matter what the media says.

[almost3am]

In my neighborhood in Naperville prices are actually up over a couple of years ago and homes are selling relatively quick (within 30-60 days), I am not seeing any dogs staying on the market. Also, the rental market seems pretty strong, as a couple people I know that didn't sell a year or two ago keep getting new renters and not entering the market.

[chet everett]

...honestly over the "long haul" the reason real estate contracts typically are 90 days is becuase that length of time has proven to be a reasonable exposure to likely buyers. The horrendous disruptions caused by the collapse of mortgage backed securities in 2008 and subsequent implosion of the real estate bubble whipsawed both buyers and sellers out of the 3-4 week selling time frame that the bubble had caused into a never-neverland of year++ listings.

For properties that come on the market at fair prices in good condition that have sufficient "comps" to ensure a smooth closing the "normal" conditions are once again LARGELY BUT NOT COMPLETELY the rule. The most obvious impediments to the proper functioning of the market are the still in flux "rule changes" that occiasionally catch people that have not done many post-collapse transactions (and the special cases of folks who have not adopted the 'document everything' mindset). Of course there are still some areas where the expansion of inventory was not supported by the local employment patterns and the resulting foreclosure backlog still looms...

The "smartest buyers" will have all their ducks in a row and be ready to make offers with no contingent sale looming while the "smartest sellers" will have a short list of the top choices to move to. That was the "normal" before things got crazy and folks felt like they had to "lock things up" with contigent contracts lest they be left out while the bubble grew...

[nikitakolata]

Originally Posted by chet everett

The "smartest buyers" will have all their ducks in a row and be ready to make offers with no contingent sale looming while the "smartest sellers" will have a short list of the top choices to move to. That was the "normal" before things got crazy and folks felt like they had to "lock things up" with contigent contracts lest they be left out while the bubble grew...

Except, in that setting, the smartest buyers could never also be the smartest seller. If I sell my house, I have to move somewhere. If making an offer contingent on the closing of my house isn't a smart move, then what is the alternative? Renting somewhere month to month and having to pay movers twice? That's far from ideal since movers for a large amount of furniture are far from cheap.

Logistically, bubble or not, if you have property to sell, it is unlikely that you can buy another place if that deal falls apart. Or, at least if you did so, it would not be an ideal financial situation. My husband and I could go and offer on another place right now, but I doubt we'd be approved to carry to jumbo mortgages. Even if we were (we have enough down payment, sale or not), that would really stink if we offered on a place without a sale contingency and then the deal on our house fell apart. The only other possibility I can think of is renting back your home after closing, but I don't know too many buyers who would agree to that.

[JacksonPanther]

You're wasting your breath. Real estate agents aren't interested in your best interests, they're interested in making the sale and getting their commission. If that means you make an offer with no contingencies and end up without a home for 6 months, or if you have to pay two mortgages, they really don't care.

Originally Posted by nikitakolata

Except, in that setting, the smartest buyers could never also be the smartest seller. If I sell my house, I have to move somewhere. If making an offer contingent on the closing of my house isn't a smart move, then what is the alternative? Renting somewhere month to month and having to pay movers twice? That's far from ideal since movers for a large amount of furniture are far from cheap.

Logistically, bubble or not, if you have property to sell, it is unlikely that you can buy another place if that deal falls apart. Or, at least if you did so, it would not be an ideal financial situation. My husband and I could go and offer on another place right now, but I doubt we'd be approved to carry to jumbo mortgages. Even if we were (we have enough down payment, sale or not), that would really stink if we offered on a place without a sale contingency and then the deal on our house fell apart. The only other possibility I can think of is renting back your home after closing, but I don't know too many buyers who would agree to that.

[chet everett]

Firstly no one gets paid anything when deals "fall apart". No sane real estate agent EVER wants a buyer or seller to get stuck with paying two mortgages as that DRAMATICALLY reduces the amount that is available to qualify for the mortgage. No real estate agent would ever want to see a seller left without some place to live, the vast majority of agents have contacts with all sorts of short term rental situations, many of which are available only through "executive relocation services" which will be very cost effective for a furnished apartment / condo. The whole point of HELPING sellers AND buyers is that results in more referals and THAT is what results in "getting paid".

Secondly there is absolutely no reason that deals cannot be structured to INCLUDE provisions to accomodate delayed occupancy OR rental(s), doing so is PART of "getting ones ducks in a row". Smart buyers and sellers understand that when they work TOGETHER with the listing agent and the buyers agent to structure appropriate terms they are ALL way ahead of folks that have an adversial view of the whole process. The "bad guys" are mostly fear and sometimes the overally timid / rigid lenders that drag out the borrowing / approval phase, even then an experienced lender with staff that is responsive can assist in making deals close in a timely manner.

In terms of "movers" the fact is that ALL reputable firms can and do offer temporary storage, often for a very modest fee. The growth of the "container" based storage firms means the seller themself can split their household goods into multiple loads and have those items that are less necessary delivered only after settled in at one's "final destination". If you inquire of "moving companies" you will find many "labor only" type services to physically hoist your heavy furniture out to the container / in once the storage company drops it off. Works really well...

[linicx]

I never bought a house or sold a house that did not a have a 30 day Contingency. Every single thing you intend to remove from the house ie: appliances, draperies, needs to be itemized and written into the contract. A verbal agreement when it comes to real estate "holds no water" unless all parties agree.

The Buyer's realtor actually wrote a rental contract into the Closing behind my back. There was no written lease/contract between us. I told the Title company I would not Close. "We do it all the time," she said. "Then tell the realtor to tell her clients the deal off. We will go to court." We had our Closing after Title company re-wrote the Closing docs.