What Real Estate is SELLING in Chicago!

[Chi-town Native]

it is more complicated than that, due to the scrutiny the banks are under - they are very gunshy about making jumbo loans right now.

[hindukid]

Originally Posted by mr aztec

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.

the tax rebate and the low rates are influencing my decision. But I strongly believe that if you are going to pay a 2008 price today, you will be better served to wait another year. I do not believe that $100 today will be more in 2010.

[Chi-town Native]

Originally Posted by Lookout Kid

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.

bummer dude, that sounds like you had a pretty solid and reasonable plan.

as is usually the case, it was the speculators and profiteers ruining things for everyone... can anyone say "Enron"?

[mr aztec]

Originally Posted by Chi-town Native

bummer dude, that sounds like you had a pretty solid and reasonable plan.

Was it reasonable? I made the the same assumption, bought in '05 thinking I could turn it around in '10 and make a few bucks. I see now that was a mistake. I think anybody that has been around enough knew that a 5 year window was taking on risk. As far as I know the rule of thumb always was 10 years. While that rule was ignored in the last decade, the rule itself could never be more true.

As an aside, we did not anticipate kids when we bouth (hugh mistake) and lucked out as we opted for a place with enough space to accomodate us for awhile. We just had our first! So to any potential buyers out there: think of everything when you are making your decision as I know many whose only option is starting their family in their 780sq ft 1.5B/1B condo.

[Chi-town Native]

I don't assume someone planning on staying in a place for 5 years and then "trading up" was counting on crazy profits, I can see a 5 year plan based on just building some equity and solidifying credit.

Yes, I would say in general 10 years is a better move - but this is what deregulation & government intervention brought, all of those short-term financial instruments with super-low rates.

[Lookout Kid]

Back in 2005, five years was the "rule of thumb". It's easy to look back now and say that ten years is a better idea!

[Lookout Kid]

Originally Posted by hindukid

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%.

The only one I'd put any stock in is the Case Shiller, and 18.2 percent is believable--but much less than the 30% you mentioned. And desirable neighborhoods in the city like Lincoln Park have seen relatively small price drops relative to the metropolitan numbers. A lot of the sales in 2009 have been foreclosures and short sales, so the prices appear lower than they should. I'm sure foreclosures and short sales will bring everyone elses prices down too, but they will continue to be on the lowest possible end of the price spectrum.

[Avengerfire]

Originally Posted by aragx6

...Think of all those places worth almost nothing now in places like western Humboldt Park and East Garfield Park.

They never were worth anything to begin with.

[hank0604]

For the record, sales of existing homes have increased from the previous month every month so far this year. I don't have the cite for this, but it was in the Trib a couple days ago.

So homes are selling. I did not happen to catch the average prices of these sales though.

[emathias]

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.

This works for things like stocks that are bought for cash or, at most, 50% leveraged. Houses are routinely 80%, 90% or even higher leveraged, so any downward price movement greatly impacts what a seller who doesn't have many years in his place can take out of the house. If someone got an FHA loan with 3% down and lived there 5 years, maybe they've paid down another 7% of the original price (because in the first few years of a mortgage, you're mostly paying interest), so in a neutral market they'd have 10% equity now. But in a market where prices have dripped 20%, they're actually 10% under water. The fact that if they bought now prices are lower is irrelevant, because the cash cost of buying and owning a house is only very loosely correlated to the list price of a house.