Why is ANYONE considering buying a house right now in this market unless you have to? (Chicago: for sale, rent)

[chet everett]

Schnooks:

Anymore details? Town? Condition? Seller was home owner? How long did they have the place? Did you see what they originally paid?

[cohdane]

Originally Posted by Schnooks

update.. we bought..
Starting list FSBO $600K
Realtor listed $575
reduced down to $479
Offered $405
Counter was $459
Accepted bid $413

Congratulations! One seller/buyer down....a few million to go.

Send me some of that home finding karma!

[Humboldt1]

FMV,

I am phi beta kappa in econ.

Can a realtor working in Wheaton please provide data for that market?

Chicago as a whole will see declines over the next year.

[Avengerfire]

Originally Posted by Schnooks

update.. we bought..
Starting list FSBO $600K
Realtor listed $575
reduced down to $479
Offered $405
Counter was $459
Accepted bid $413

Nice.

[chet everett]

So poor old Schnooks didn't buy at the bottom?

Is this going to be like the "recession call" that so many professional economists were so willing to make?

I want a crystal ball, or at least a Magic 8 Ball, my favorites:

• Reply hazy, try again.
• Better not tell you now
• Cannot predict now.
• Ask again later.

Numero Uno: Concentrate and ask again.

Magic 8-Ball - Wikipedia, the free encyclopedia

[team_evans]

I know I'm taking this thread off-topic and I promise it'll only be this once: I just wanted to apologize for FMV for getting on your case about how your problem is one many would consider themselves fortunate to have. Sir, you have every right to come on here and discuss the real estate market with others who are interested and knowledgeable and I was out of line in criticizing you for doing so how you saw fit. My apologies and my apologies to others for sorta hijacking the thread.

Ok, done!

[fairmarketvalue]

team evens, Thank you so much. I really appreciate it! I am sure we are all good people, including you too! Thanks.

Avengerfire, chett everett asked for some specifics of this "rare" scenerio, which we all know exists. Could you please let us know where you bought, what the catch was , etc. This could have been a case where someone was definately priced way above their comps, talked realtor into taking list only if they agreed to do it at their price, etc. Bragging about how you were able to "steal" someones' home is only fair if you prove it was overpriced and what it's location was in the first place. Otherwise, perhaps this was the one in thousands that was ready to go into foreclosure. But some better data would help.
Thanks

[chet everett]

I have no doubt that Schnooks purchased a good house at a good price, though like many FSBO sellers the original asking price was just unsupportable. I am curious as to the location of the home, and the length of time that the seller owned it, becuase just as Societe General and other financial institutions that get into an unsustainable position, holders of assets with inflated valuations are more likely to eventually smell the coffee and close out losing positions.

If that is the case I appluad Schnooks, becuase with out buyers like them the whole market would just stay frozen...

The bigger issue is about media hype. Here is an interesting piece from a "semi-blog" done by a reporter from the St. Louis Post-Dispatch: The Platform » Blog Archive » U.S. economy - recession or just a slowdown?
The point of looking CLOSELY at what has happened with near universal cries of RECESSION OMIGAWD RECESSION THE-SKY-IS-FALLING RECESSION THE-WORLD-IS-ON-FIRE RECESSION is that the HYPE feeds itself. Of course there are plenty of people that keep their mouth shut, step back, make some money and let the hype-sters scream away. In fact, one could argue that folks who truly understood how real estate markets tend to move would simply focus on places that are priced fairly and ignore the overpriced places. Buying a place on the open market for a third of asking price could contribute to erosion of value, and perhaps such a situation is better handled by the real estate investor types that like to deal with contract sales and more esoteric structured deals...
On the other hand , there are those who've worked with real economists and they understand, just as Alan Greenspan did, that crossing the line from documenting and explaining the economy into attempting to influence it can have profound unintended consequences: Pajamas Media » Obama’s NAFTA Gaffe: Economists, Stay Out of Politics!

Right now folks can look back in time and say the prior peak in real estate prices NATIONWIDE probably happened sometime in 2005, though I am quite sure MANY individual sub-markets peaked MUCH later, some are STILL reporting gains...

[Schnooks]

NW suburbs
Seller bought 10 yrs ago at $254.. put in $100K (including a room addition).. so he made a fairly decent profit.. he was absolutely way overpriced as FSBO and also turned down a couple higher offers before us.
2000 sq ft ranch (exactly the style I was not even considering and almost refused to look at it.. but the husband insisted).. excellent condition.. very solid (I liked that it was a safe house as compared to an older style tudor that needs lots of upkeep)
Bottom? most likely not.. but we were tired of waiting and this was a good buy. If it were up to me.. I probably would have waited to buy, but the DH is a little older and wanting to get settled in.

I think maybe this thread needs to chill out a bit.. yowza.

[chet everett]

I very much appreciate your information.

I did a little quick spreadsheet math with the starting price that the seller bought the place for of $254K. I then applied ten years of single digit appreciation, never more than 8 percent or less than 3 percent. Added on the full value of $100K in additions (which pretty much never is true...). Came up with a estimate of $473,000 of where I would have listed the house. You got about a 13% discount. Well within the range I would feel is appropriate.

I would not expect to sell this anytime soon, if you hold on to it for at least 5 years though, and do things to keep it not just "solid" ( keep the trees trimmed and the gutters clean, make the sure is roof is good, the bricks are all tuckpointed, all the trim is well painted) but also attractive (landscape the place, pretty up the driveway & garage door) and has appropriate interior (up-to-date colors, well finished floors), is energy efficient (fully insulated, tight high quality windows, exterior doors that have no drafts) and add in features that people like (closets with multiple hanging options and shelves, bathrooms with heated tile, easy to clean bathrooms, high quality vanities and lighting, a kitchen that makes cooking and clean-up easy every night and entertaining a breeze) there is no reason to believe that the home will not return all the time and money you invest in it.

Congratulations!