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

[Humboldt1]

Middle aged mom provided some great data and did not deserve to be attacked. I loathe most realtors which I have been very upfront about on this forum. Middle aged mom seems to be one of the good ones.

Thank you middle aged mom.

Her data seems to suggest that your house is priced too high. If your house did not sell last year for 520M it may not sell for even 500M today. My guess is you will have to go 475ish to get it sold but that is your call. You will get less for it now than you would have 1 year ago.

I don't know how a sunroom is counted but I would consider it less valuable square footage than the rest of the house, thus increasing your 172/sq ft price.

Please don't attack everyone who presents you with information you don't want to hear. Middle aged mom is simply presenting facts, much better than my opinions. (which mirror those of many analysts in the financial services field). I still wish you good luck in selling your home. You may just need to accept a lower price to get the deal done.

Once it is sold please post the price you received and we can then compare notes. Plus, it will be great information on the market conditions in Chicago for those looking to buy or sell a home.

[chet everett]

As I said, you can't really put too much faith in "electronic appraisals" and even when it comes to raw land a cost/sq ft can be all over the place depending on things that are real hard to tell without at least some photos -- the lot next to all night bar is going to be a bunch less desirable than one next to a quiet neighborhood park...

The info IS however useful in explaining what OTHERS have spent in the area and the information CAN be helpful to the seller in how to price AND MARKET their property becuase buyers also are working with agents that DO present this information.

Quickest way to get people IN THE HOUSE is to INCREASE the curb appeal (landscaping, even flowers from WalMart, can make a HUGE difference this time of year...), take a new picture, stage the place. All basics, but it may be the best way to to get the price you want...

[middle-aged mom]

As I said, I don't know the area and some of the comps may back to busy streets or have sloped lots or have other fixed defects. My only point is that the closed comps, albeit aged, are different from FMV's perception of what homes have sold for, in her neighborhood.

The tax records for the subject property shows< 2800 square feet. This may or may not include the sunroom addition which may or may not be a 4 season room, which may or may not have a consistent value with the primary living space. Basement square footage is independent of the primary above grade finished space. It is also possible that the tax records are incorrect. I can only use the facts, as stated in the public tax records, no different than a prospective buyer.

Lastly, see-saw pricing is almost always a red flag to agents and buyers, thus the "freak-flag", especially when combined with elapsed market time.

I hope that FMX achieves her objective, whatever it is.

[Anthera]

Middle Aged Mom is absolutely correct about pricing.

While I've never heard the term "see-saw pricing" before, it aptly describes the phenomena. As a buyer, my husband and once saw a house that was nice enough for us to want to see a second time when we had narrowed down our choices. This house had been on the market a long time. When our agent gave us the listing price it had gone up slightly. Our agent explained that the sellers had repainted the first floor of their house (by themselves, not professionally), and felt that was worth an additonal $10k. We told the agent we weren't interested in seeing the house again.

Sure, we could have made an offer and negotiated, but raising the price sent us the message that the sellers were unreasonable. We had bought a house once from unreasonable sellers and will never do it again.

[nanannie]

Originally Posted by Anthera

Middle Aged Mom is absolutely correct about pricing.

While I've never heard the term "see-saw pricing" before, it aptly describes the phenomena. As a buyer, my husband and once saw a house that was nice enough for us to want to see a second time when we had narrowed down our choices. This house had been on the market a long time. When our agent gave us the listing price it had gone up slightly. Our agent explained that the sellers had repainted the first floor of their house (by themselves, not professionally), and felt that was worth an additonal $10k. We told the agent we weren't interested in seeing the house again.

Sure, we could have made an offer and negotiated, but raising the price sent us the message that the sellers were unreasonable. We had bought a house once from unreasonable sellers and will never do it again.

yes, so true, and unreasonable home buyers are a nightmare as well. Our last home we sold, the guy wanted to give us a lower price because 3 windows did not have screens. It was "adding a great inconvinience to him" to have to buy new ones.

[Anthera]

I agree. When we were selling our last house, our neighbor was upset when we had a showing because her nanny's beat up car was parked in front of her house. She apologized and told me to call her when we had a showing so it wouldn't happen again.

I told her not to worry. Anyone that upset over a car parked on the street would be requesting a new roof, furnace,window screens etc. We'd never get past inspection.

[rongoe]

To put a few facts on the table...

Potential buyers in Chicago are not mistaken to expect lower prices than previous years. The claim that the California and Florida markets are driving everyone to think, mistakenly, that the national (and Chicago) market is in decline is false. Chicago home prices have indeed fallen. According to the Case-Shiller index, Chicago area prices have dropped a full 10% from March 07 to March 08, and 2% from Feb. 08 to March 08 -- that's 2 % in one month. Buyers are understandably skittish about prices continuing to fall.

Search for 'Case-Shiller Chicago' and look at news stories from the end of May 2008 to find these numbers.

Yes, California and Florida are worse, and Nevada had the biggest drops, but Chicago is not immune to it. Indeed, some areas of chicago (outer burbs, areas of recent growth) have probably experienced 15-20% price declines. Will that extend to 20-30% declines... maybe, maybe not. Some areas (nice inner burbs and good Chicago neighborhoods) have probably had very minor declines, if any.

I'll be buying a house next week in either LaGrange, Wilmette, or Frankfort, in the 500-700k range. I worry that prices may fall further, and will try some "lowball" offers to try to get a "deal" in case markets do continue to sour. Waiting doesn't make sense for me since I've got 4 kids and will be in the house for at least 5 years. If I buy in Wilmette or LaGrange I'll buy near the trains since that will probably always insure desirability for commuters. If I buy in Frankfort I will worry about empty lots staying empty for a long time as growth stagnates.

In what suburb did the 30% lowball offer get accepted, and at what asking price?

[chet everett]

500K - 700K is a 28% spread. Are you going to be lowballing ALL the properties that appeal to you? Seems misguided at best. As I continue to stress, it always more productive to focus on the property that is MOST desirable to you and priced MOST attractively. Places that are listed unreasonably high are, even in this market, not worth wasting your time on.

Where in the heck do you work that you would be considering Frankfort and Wilmette?

With four kids I would be focused almost EXCLUSIVELY on the quality of the schools and I would be INTENTLY shopping for the MOST house that I could possibly afford in the BEST area.

I honestly cannot imagine that there are not better comps in towns ADJACENT to one other than in three towns so widely separated and different in almost every way...

Most peculiar ...

[rongoe]

I would be more likely to lowball a home that is empty or with a listing price that appears unrealistic (given recent comps and other listing prices).

I view lowballing as means of sorting sellers by the degree to which they are desperate to sell. Clearly, some sellers are able to be more patient than others. Their patience may result in a better selling price in the future, or perhaps a lower price in the future if the market continues to fall. I hope to find a home I like from a seller who needs to sell now. Current market conditions have high supply, low demand. Basic economics suggests prices will fall to clear the market.

I'll be commuting to Hyde Park, which is why Frankfort is appealing (it's a short drive to the Metra Electric line which goes to Hyde Park).

Wilmette is attractive because it's the least expensive in New Trier, and has both CTA and Metra.

LaGrange is attractive because it seems to be the right combination of low crime, somewhat affordable, very good schools, close to city. Also, it seems to have more of the older homes (early 1900's) than farther burbs. Hinsdale ... too pricey. Oak Park ... bad crime stats. Wheaton and beyond ... getting kinda far and fewer old homes that we like.

Yes, I know Wheaton is closer to downtown than is Frankfort, but the commute to Hyde Park is much easier if one uses the Metra Electric.

House for the money and commute (for me) is best from Frankfort, but I do worry about it's schools being "good" instead of "great", and about home values declining or stagnating in a slow national recovery due to distance from downtown.

The suburb options are so plentiful that I'm finding it hard to figure out where we should live. I'd like to avoid renting since moving twice is very unappealing.

Any thoughts would be welcomed. Where would you live if you had 4 young kids, a stay-at-home wife, a job in Hyde Park, and could afford at most $700k, but preferably low 600's?

[Anthera]

You should consider the entire New Trier district. Wilmette might have the lowest average price, but there are individual homes in all the communities(Winnetka, Kenilworth, Wilmette, Northfield, et al) that might meet your needs. They all have a different feel. If you want to PM me I'll give you my opinion on the different villages.

With four kids, you'd get your money's worth. And as a SAHM, your wife would have a lot of community activities to get involved in (or not). New Trier has a great newcomers club, the beaches, shopping, and is VERY child oriented. There are many things to do, and historically homes in the NT district have appreciated quite well. When the time comes to sell your house you would have an easier time than in some of the other communities.