Let a seller hear the buyers perspective (Chicago, Wheaton: fit in, for sale)

[60439]

I am curious as to what home buyers are looking for today? Are you looking to buy a home in the near future or are you waiting to see if price reductions continue? What will move you from a looker to a buyer?


What things do sellers do that hinder you in the process of purchasing a home?
Are you using a buyers agent and if so have they been helpful to you?

Will you still be looking during the winter months? Or will you wait and start looking again in the spring?

I am contemplating putting a house on the market during the holidays but concerned about all the bad press about the housing market. Any insight from the buyers perspective would be helpful, because right now I only have realtors giving me there opinions.

[rgb123]

I've always rented, and am starting to think about buying for the first time. I always thought it was silly to think home prices would just keep rising, I'm not real suprised about what happened and see this as a good time to jump in as a young person.....but its hard to say if it will be better in a few months or years.....its going to be different for everyone who makes this decision, and there is always going to be people who have never owned a home, who want to make that step, in my opinion. (no matter what the market is like)

anyway, just saying...yeah I am thinking about it and never thought about it before much. I think this is a good time to look, as it is just that point in time for me....nothing to do with the season, except that personally, I have more time off....

[HOWELL_STREET]

1 As a buyer's goal, the cheapest price "I" can get.

2. A price that won't cause "me" to become 'upside down' in the future.

3. A very nice cosmetically looking house.

4. A bargain priced house.

5. A house that I can afford - - with a thirty year fixed mortgage - - without ballon payments as in an "ARM".

6. A house that I can sell for a profit in the future.

>>>>>>

It would seem to me that everyone has the same obvious goals. And that's even with an automobile purchase.

However, today, there is such a wide gap in prices between sellers and buyers... that many people can no longer afford a home or even come to consessions.

On the City - Data "Mortgages" Forum, I have talked a little about this subject in my recommendation of a very good book to read. It is entitled, "The Florida Land Boom" ( and collapse) written by William Frazer circa 1995 - 1996. William Frazer, at the time, was an economics professor at the University of Florda. This book is so popular, that several book sellers are now listing it at about $277. You can find it through the Interloan Library System. I highly recommend that everyone read this book since it gives an excellent perspective of where we MIGHT be headed in our own future.

Carter Glass

[HOWELL_STREET]

As an example of problems even in my own home town of Wheaton, IL.

We were interested in a very tiny single family home for my married daughter and son in law. The house we were considering, is about 864 square feet.

About a year ago, the house had a fire but was then rebuilt by the insurance company. Then the owner placed the house for sale as an MLS listing... somewhere around $300K. When there were no 'nibbles', then the house was eventually dropped to $258,900. And it still did not sell.

Now at that price, one has to wonder what the 'seller' is trying to do... since that same owner bought that house in circa 1978 for only $67,000. We know that from public record on the Internet.

Is that price gouging? I don't know. So now the owner is living back in his own house - - and personally - - I don't know what has happened to his second home. Maybe he has rented it to family members?

Today, in Wheaton, 'cheap' houses like the above have an asking price of $250K without any takers. That's because people can not even afford those prices when they are receiving less employment remuneration and concessions from their employer.

And on the high end of Wheaton homes - - SOME - - exceed one and one half million dollars. There is such a large pricing gap in many towns around Chicago that one wonders what is going to happen?

Most likley - - as predicted by several very intelligent mortgage lending people - - selling prices around the U.S. could drop as much as 40% in the future.

At this point, that is speculation and my guess is no better than yours, but I base my opinion on that of William Frazer in his book mentioned in my previous thread.

Carter Glass

[Windy City John]

Carter,

Did you loook outside this morning? Is the sky falling?

[Windy City John]

Carter,

On average, you can expect a house to double every 10 years so with your example

67,000 x 2 = $134,000(1988) x 2 = $268,000 (1998) Certainly the home was within a

a reasonable range.

[bls5555]

Originally Posted by Windy City John

Carter,

On average, you can expect a house to double every 10 years so with your example

67,000 x 2 = $134,000(1988) x 2 = $268,000 (1998) Certainly the home was within a

a reasonable range.

Are you nuts? A house doubling in 10 years?

Maybe in the past but not any longer. It is unreasonable to expect a house to go up that much. Doubling pretty much occured in the boom areas and now they are crashing.

With your example that house should be worth over $500,000 now. For a 864 Sq ft. house? Come on. I think you can see why we have such a major problem in real estate now. An 864 Sq. Ft house is by all definitions a STARTER home. How many people do you know that are looking for a starter home can afford a $250,000 house. Practically none. If you can afford a $250,000 house you probably have a pretty decent amount of income coming in, at least you should. Another reason why we have such a housing problem.

[stewartthrower]

"Are you nuts? A house doubling in 10 years?

Maybe in the past but not any longer. It is unreasonable to expect a house to go up that much. Doubling pretty much occured in the boom areas and now they are crashing.

With your example that house should be worth over $500,000 now. For a 864 Sq ft. house? Come on. I think you can see why we have such a major problem in real estate now. An 864 Sq. Ft house is by all definitions a STARTER home. How many people do you know that are looking for a starter home can afford a $250,000 house. Practically none. If you can afford a $250,000 house you probably have a pretty decent amount of income coming in, at least you should. Another reason why we have such a housing problem."


Actually he is correct. Historically housing prices rise approximately 5% per year, which make housing a sound investment because it beats inflation. There will be boom and busts, but over the long haul, you can expect your home to double in value in about ten years. It is not any more intelligent to base "long-term" real estate investment on today's market than it was to do it two years ago.

[60439]

I appreciate the responses to my question. I understand the basic idea that you want to pay as little as possible. But on the other side the seller wants to sell for as high as possible. This is basic economics. I guess my question is grounded in reality . Are most buyers looking for prices to drop 40%, because if they are, they will not be buying most homes. They will be buying forclosed homes that have not been maintained.

Are there any true buyers out there anymore?

[HOWELL_STREET]

My opinion is 'no' since there is too much of a buyers / sellers gap in the purchasing price of a home. As a reiteration, the best policy is to take a wait and see for at least one year. At that time, then we will know where the buyer / selling prices then stand.

The current huge risk is for someone to end up 'Upside - Down' with a house / mortgage purchase. If someone is not familiar with that term - - it means that the amount of mortgage on a given house is more than the value of the house. This is a simplified definition and perhaps others might want to elaborate on that. Obvioulsy, being upside - down is a huge risk for the near term future.

So my personal opinion is to just watch the housing market for at least one year. IF you obsolutely need a roof over your head, then rent a nice single family house that you can afford. There will be more and more of these rental units when people can not sell their single family homes at the prices they want.

Carter Glass
Wheaton, IL