What Real Estate is SELLING in Chicago! (Lincoln, Humboldt: short sales, 2010)

[Chi-town Native]

staying put really isn't all that bad, is it? I'd hope that folks who bought in 05 - 07 weren't planning on moving immediately... it's a stormy period right now, but it will likely at least stabilize soon.

[hindukid]

I think properties are moving so slowly because sellers are just being unrealistic. Every housing index seems to indicate that current sales are at a price 20-30% less then last summer. Yet almost all sellers seem to be pricing at comps from last summer.

I am in the market but there is just nothing for sale at a significant discount which all housing indexes are telling me its warranted. For instance I like a palce that was listed at 349K last august. The price has now dropped to 335K. The way I see it is that it wasn't even worth 349K last summer or else it would have sold. Now I am thinking I want at least 20% off of 349K. In my mind this seller is unrealistic and that's why its been sitting for 9 months and it will continue to sit forever unless he wises up or the market rebounds dramatically. And this is a new constuction condo that is just sitting empty.

The vibe I get is that sellers are looking at last year's prices and ignoring the low selling prices of winter and april because its still early. They are hoping the market springs back to life this summer. If it does not perhaps bargains can be had in the fall. My lease ends on Aug. 31. I would like to buy but if I don't get a 20% discount compared to a year ago I am just going to rent another year.

[Lookout Kid]

Originally Posted by hindukid

Every housing index seems to indicate that current sales are at a price 20-30% less then last summer.

Oh really? Show me one index for Chicago with these figures. I think you'll see large drops since the 2006 peak, but definitely not this large since last summer.

[Lookout Kid]

Originally Posted by Chi-town Native

staying put really isn't all that bad, is it? I'd hope that folks who bought in 05 - 07 weren't planning on moving immediately...

My wife and I bought in '05 thinking we would move in '10. Now it's clear that won't happen. And we had two people move in to this condo, but will have four people moving out. As soon as we are financially able to do it, we will.

[hindukid]

Originally Posted by Lookout Kid

Oh really? Show me one index for Chicago with these figures. I think you'll see large drops since the 2006 peak, but definitely not this large since last summer.

Radar Logic RPX for chicago:
Latest number is 134.95 on march 6 2009. August 6 2008 was 179.23. That is a drop of 24.7%

Case Shiller for Chicago:
S&P | Indices > Alternative Indices - S&P/Case-Shiller® Home Price Indices - Home Price Values

March 2009 is 122.34. August 2008 is 149.46. That is a drop of 18.2%.

According to the Illinois assoc. of realtors:
Chicago Real Estate Blog: March 2009 Housing Numbers

The news was even worse for the city of Chicago where the median price fell to $220,000 from $300,980 last March.

That is a drop of 26.9%.

[mr aztec]

I'm a bit tired of hearing potential buyers complain about sellers being overpriced and unrealistic. Two quick points:

1) People hear prices are down 30% and get upset when they can't go to Lincoln Park and can't pay 280k for a condo they saw a year ago priced at 400. Location Location Location is not sales tactic.

2) The adage, your house is only worth what another will pay for it is a bit simplistic. There are many that won't sell because they refuse or can't afford to take a loss. Get enough of these people together in one area and a neighborhood might support prices that would otherwise not be there (excluding forclosures obviously). Right or not, we have loan to value ratios influencing the sales price, and where the ratio approaches 100 or even higher, I'm thinking the place won't get sold--which is perfectly ok.

[aragx6]

Just because the city-wide drop is ~20% doesn't mean a condo or home in one particular neighborhood is worth that much less. Think of all those places worth almost nothing now in places like western Humboldt Park and East Garfield Park.

[Drover]

Originally Posted by long101

You know the way I look at this... Just about all housing prices are down. so when you sell your house you obviously get less money for it, but then when you buy your house you also pay less. So it kinda evens out. I know this is vague due to some housing markets totally busting (AZ, Las Vegas, ect..) and others being pretty stable. I would think that if you move to a generally the same area as before it would be within a few % points difference.

The problem is more complicated than that though. It's not just that people don't want to take a loss, it's that they can't take a loss, because most or all of their equity is gone and they have nothing to put down on the next house. That's really what's slowing down the market. If people could simply trade equivalent-valued homes without worrying about how much cash they have to bring to the equation, I suspect real estate would be turning over at a higher velocity.

[hindukid]

Originally Posted by mr aztec

I'm a bit tired of hearing potential buyers complain about sellers being overpriced and unrealistic.

I'm not complaining, just telling you why housing is so slow. I am a potential buyer. However there is no way I am paying 400K for a place that sold for 400K last summer. In my opinion I am just digging a 100K hole for myself. I realize that lots of people may not be willing to sell at that price.

If I owned a place I probably would not be willing to sell at that price either. At least if I were able to live in the place or rent it out. I'd think I was selling at close to the bottom. I'd at least want to wait and see what happens.

So as a buyer I am waiting. If people start to pay 2008 prices I might think about jumping in. As I seller I'd be waiting to. I guess we will see which group jumps first.

I know that I am not jumping in first. If I can't get a place at a significant discount relative to 2008 prices, I will just rent another year. Not a big deal to me.

[mr aztec]

Originally Posted by hindukid

I know that I am not jumping in first. If I can't get a place at a significant discount relative to 2008 prices, I will just rent another year. Not a big deal to me.

Ah, the waiting game. Put too simply, you can pay $100 now or $100 (or more) in the future. For me, the tax rebate and record low rates would nudge me to buy now. Of course this would be for a home that I plan to live in for 7+ years. If your flipping in 3, best of luck to ya.