Will the housing market stabilize? (Chicago: real estate, condos, mortgage)

[day_dreamer]

I'm new to the boards.

All my life, I've wanted to own my own place. My dream home is a Chicago-style bungalow. I've been looking at home prices and they are starting to scare me. I am just starting out in my career and I have quite a few financial hurdles to overcome first, but ultimately I would love to purchase a home.

Looking at the prices of these homes, it seems as if that day is far off. Brick bungalows are ranging from 79,000 to 400,000 depending on the neighborhood. My preference would be the near-west suburbs. I understand that some neighborhoods changing for better and worse. Which communities seem to be stable or improving in the long term (in regards to schools, commerce, etc.)? Will home prices decline or are they going up again?

[jds62f]

yes

[day_dreamer]

Well thanks for answering, hahaha. I guess I want to know if anyone thinks the home prices will skyrocket like they did a few years ago.

[Vlajos]

Originally Posted by day_dreamer

Well thanks for answering, hahaha. I guess I want to know if anyone thinks the home prices will skyrocket like they did a few years ago.

Nope, no skyrocketing in the near term.

[chet everett]

The specifics circumstances that helped fuel the meteoric rise in residential real estate are extremely unlikely to be seen any time soon.

The relatively widespread boost in incomes that caused "the wealth effect" meant more people felt comfortable spending a large percentage on housing.

Interest rates and lending standards simultaneously became very favorable.

The technology and mood of builders improved so that high quality homes could be built with less risk than in previous eras.

The demographics of folks with children and parents with paid off family homes conspired to create a generational shift among home buyers.

I think homes in desirable parts of Chicago and its suburbs will be relatively stable in price over the next 3- 5 years.

[pvande55]

We don't know when, though. Home building seems to have taken a step out of the grave.

[ToriaT]

It seems to me that home prices are about as low as they can go but some say they could go slightly lower. Some places seem really cheap but there are still places in Chicago I believe are overpriced in the popular neighborhoods. Its hard to see that a chicago bungalow could be 300 to 500 k or even more in some areas. Mortgage rates are really low now if you can qualify. I recall back in the late seventies when I bought my first house the mortgage rate was 10 and a half percent and they rose from there. Oddly when I sold my second house in 2001, it sold the first day on the market after a bidding war and fetched 20K over list price. My how things have changed. At the time we bought our first house, we believed we were fortunate to have that rate. If you are clever you can search out a good deal on a house or condo. A condo in my moms building sold for 49k at auction recently and most people had paid well over 150 K for those condos in years past.

[day_dreamer]

I've been looking in a few neighborhoods and the asking prices are all over the place. I know this is a long term goal, but with kids I have to be careful about what school districts I would be living near. I'm trying to be realistic about it. With such variation in home prices, I wanted to get some informed opinions about what's going on.

[jds62f]

home prices are subject to so many particulars unless you're in the real estate game its going to be hard to "guarantee a win" in my opinion. Find your school district, find a home in it, and plan to stay for a long time.

Man I thought home prices were "about as low as they could go" when we bought our last house two years ago. According to the recent appraisal we got, we were wrong (to the tune of 15%!) I'm no real estate expert but I don't think anyone is worried about a general boom in housing prices over the near/mid term.

[ToriaT]

Yes the best advice is plan on staying in any home you buy for a long time. People have run into problems when they thought they could buy and flip out of the house in a couple of years. Home ownership was never designed for that. To buy a home, find the area you are interesting in and study the websites that offer homes. You can find some really good buys now.