Housing Market hitting bottom still!!!????????? (Chicago, Cleveland: for sale, real estate, foreclosures)

[Helper2007]

Hi everyone! I'm new to this forum but I have heard great things about how helpful people are here. So I want to clarify with you real-day experts who can give me genuine answers, instead of all that Realtors' blah blah who can twist things either way to suit their needs to just make business out of you.

I had been postponing buying a house for a long time, despite my wife nagging about it, but now that our family is increasing, I decided its afterall time that I take that plunge into this big housing world and ease a little of the chaos around. Of course it's not that we have so much money to own even now, but just enough to put a down payment of 25K, for around 300-350K house, and declare ourselves as a proud house owner. So I started first with understanding this big housing world.

I am daily coming across the real estate columns analysing/predicting ,..... and bragging that this is a buyer's market and there is no better time as the market has been taking a downturn etc,.. etc,... This all made me congratulate myself on my right time and go see the real figures...... and I am surprised----the prices are same as earlier irrespective of it being a buyer or seller market!

So now I am getting totally confused, are these analyses/predicitons just a load of crap! or just about that big LA & Cal markets only!? or Did the prices really fell here in Chicago suburbs too? Can soemone tell me if it indeed is wise that I buy a house now? or just wait for one more year for the market might get even lower? ---meanwhile I can build some more towards downpayment? No offense to any owners, guys, but I am desperate of a better deal due to my pocket restriction. I would greatly appreciate some help here. Thanks in advance.

[BRU67]

No problem Helper. You should save up and wait until Friday, June 12, 2009. At 3:27 p.m. that day, the housing market in the Chicagoland area will hit its bottom, and then rise 3.6% for the remainder of 2009, 6.8% in 2010, and then 9% in 2011, and so on, until it reaches a peak appreciation of 26.9% in 2016 when Chicago hosts the Olympics and speculation rockets the market to another peak on Wednesday, March 29, 2017, at which time it will begin another decline. At that point, you should sell the house and move to Cleveland.

I'm just kidding. I don't really know all that. Housing is a market. You have no idea what it's going to do. Personally, I don't think it's anywhere near the bottom yet. Of course, Bru67's message board opinion means little to nothing. You have to make the choice.

[mdz]

For what it's worth (an anonymous web opinion ), we're not at bottom yet. Still way too much inventory that needs to go. If you can afford to wait, do so. We have not had the huge declines that are starting to happen in FL, CA, NV but we're overbuilt here, too.

that being said, if you find "dream home" and are planning on buying a place and staying in that place for >5 years, there's a good chance things would rebound back by that time. But if you buy now and have to sell in a year I think that would be asking for trouble. At this point I would not consider a new purchase of a home as a short term investment.

[gardener34]

Here where we live, prices are stable - not down but not up either. The nice houses priced well are moving.

But the buyers are pickier cause they can be. Everyone wants turn key for next to nothing though. Thus sellers are balking at that kind of thing. Thus the reason the houses are sitting. If you don't absolutely have to sell by a certain date, you are going to turn down the "bottom feeder" offers just cause everyone says it is a buyers market.

Expect to pay a decent price - in my opinion - unless it is a distressed buyer, you aren't going to get a mega-deal on a "turn key" house. And the days of the certain housing markets going up 30% a year are over.

That's my 2 cents from what I am seeing here in the fox valley.

[sbd78]

What area are you looking to buy? I think a lot of buyers are still in denial about prices falling and still are asking prices comparable to what things were selling for during the boom. And it depends on what area you are looking to buy. Some areas are harder hit then others, even different parts of Chicagoland. For example, I just sold a home in a more established area and bought a new construction home in an area of tons of new construction. I think the area I just moved to is hit harder than the area I moved from because all the over-building of different builders in the area and existing homes having to compete with new construction have made it more competitive. As far as when the market has hit bottom, I hope it does so soon because I want my new home to go up in value, not down! But I'm no realtor, this is just my opinion.

[Jeff Hill]

BRU67's reply is priceless. If I (or anyone for that matter) could predict the market, I would be the richest person in the world. Unfortunately that is impossible, no matter what an agent tells you. All you can get are different opinions and take them for what the are worth.

In my opinion, the "sky is falling" mentality is driven from markets that have seen a much more severe downturn that others. The Midwest has not seen huge effects like the rest of the country has. In reality, the market is just going through a correction. Think about it, in the early 2000's people were making 15, 20, even 30% annually on their real estate investments!! That's just insane! For the history of the housing market, the average gain is around 5%....NOT 30! Now, in 2007, people are making the traditional 5% gain and everyone is freaking out about it. The days when investors could buy a 100,000 house, put 12K into it and sell it a year later for 150,000 are over (at least for the time being). That said, you can still make your investment in real estate and expect the 5% annual return. It's without a doubt the most solid investment out there, even in this crappy market.

In addition, I too feel the market will still bleed a little further before bouncing back. I base my opinion on 3 things:

1). There are still new foreclosures coming on the market each and every day. This is a great rule of thumb for market trends. When the foreclosures seem to be subsiding, you can expect the market to start making it's comeback.

2). The #1 culprit of all these foreclosures you are seeing are from the sub-prime markets. And most of the sub-prime markets are in an Adjustable Rate Mortgage (ARM). I'm not going to get into exactly what an ARM is but the reason I bring it up is there are a record number of ARM's (over 2 Million to be exact) that are going to be re-set within the next two quarters. This is a VERY alarming statistic. Granted, these will not all go into a foreclosure situation however, I'd be willing to bet that at least a 1/3 will. And when that happens, we will see an even bigger slide.

3). Supply and Demand. The inventory of housing is off the charts. For every buyer out there, there are over 10 homes to choose from. All this means is the buyers that are out there can get very picky! So picky that they scare themselves right out of buying. When the supply is greater than the demand, that spells doom.


No matter what you may think (or hear), it is still a good time to buy. Interest rates are low, there's plenty to choose from, sellers are desperate...all the signs are there. And if you are going to try to outwit the market, you're just going to shoot yourself in the foot. I mean really....what are you waiting for? If a house you like now is 300,000 and it goes down in 3 months to 290,000, what are you saving on your mortgage?...... about 50-60 bucks...that's how much. Not to mention someone else already bought the house you like from under you.


Good Luck in your search

[Helper2007]

Thanks, all you guys for those valuable comments! Exactly! I too hate to see that hard earned cash after all these years, go to drain by loosing my equity later! So i understand the frustration of buyer & seller likewise. Well, I was actually looking into Dupage and Cook counties, as I have been a renter here for almost all my years and got habituated (more so with my wife & kids-- they do not want to budge what with the schools and all that, so no help there). But here the prices seem to be riding on high still!!
Anyone from these areas, buying/selling houses or keeping up with the stats, please provide your valuable two cents, guys? Wud truly appreciate the response.

[Helper2007]

Interesting reply JeffHill & BRU67. I agree that we can't keep predicting the stats to buy a home when we find one. But u see, I am still on the look out and have not yet zeroed in on that "dreamhouse", thereby reaching that complete desperation to buy it however the market be. At this point of time, I find my cash a little restrictive, so market trends are more important to me before I take a decision that I might not regret later. Also I have an impending out of state-move soon, so can wait a little time if that's what it takes, before I really do reach that desperation. So guys, I would really appreciate a helpful suggestion about the market, from your experience.

[BRU67]

Understand that I was just messing with you a little there It's a good inquiry, though you're always going to have trouble getting a straight answer to inquiries like it because, well, no one knows, and people will have different motivations when they answer you. But one thing I can do with certainty is caution about being desperate. There's no reason to be desperate in this market. Heck, there's no reason to be desperate in any housing market. Just buy what you can afford and live in for awhile in case you have to ride out a downturn. People get in trouble when they get into the "gotta buy now" mindset and stretch themselves too thin. If cash is tight for you now as you say, get a reasonable rental and save your money. The buyer usually holds the cards, especially now.

Good luck!

[axewoman]

My home went up for sale on July 3rd and a contract has been on mine for 3 weeks . Full Price. I made it clear to all that I did not have to sell I just happen to fall in when I want to sell to move out of state .
I just feel that everyone has gotten so caught up with the media in stating it is a buyers market. My relator even wanted me to lower my price and I said no.
To each his own only you will know the right time.
Good Luck