Advice on Wheaton?

[Lookout Kid]

Originally Posted by Taco1234

What are your thoughts on buying in general right now (in IL)? We were under contract on a home and it fell apart because of a roof issue, and in the end we have decided to rent for one more year as we feel big things are going to be happening with housing and the economy in general in the near future. I know people say you can never time it perfectly, but we can't help but feel that if we buy right now, that same house may be worth quite a bit less in a year or so....

I know you're asking Chet and not me, but if were faking a crystal ball I would expect housing prices to increase slightly over the next year in Chicagoland, and interest rates to increase slightly. I am already seeing sales activity pick up in the new year around here. Houses that have been listed FOREVER are now finally selling, and with higher offers than they were getting in 2015. But the better question is about the LONG TERM health of the housing market, not the next year. I am concerned about the impact of a possible Chinese collapse, but that is a difficult thing to base life decisions on as the impacts on OUR economy are unclear at this point.

I think the State of Illinois's financial mess is going to take a while to truly manifest itself in the housing market. Sure, it may scare away some companies in the mean time and that will be a drag on the economy, but the main tax impacts probably won't be felt for years since the government is seemingly incapable of coming up with a solution at this point. In the mean time our housing market will track along with the rest of the country, albeit at a diminished pace.

[chet everett]

Originally Posted by Taco1234

What are your thoughts on buying in general right now (in IL)? We were under contract on a home and it fell apart because of a roof issue, and in the end we have decided to rent for one more year as we feel big things are going to be happening with housing and the economy in general in the near future. I know people say you can never time it perfectly, but we can't help but feel that if we buy right now, that same house may be worth quite a bit less in a year or so....

I mostly agree with LK's assessment, but there is already evidence that our region / state is being hurt by the policies that drive away jobs and result in higher taxes. Those same policies put a bigger gap between the folks that are in the desirable jobs that firms then need to pay higher wages to entice employees to place themselves at greater financial risk vs the low paying jobs in retail and other sectors that have no future.

Timing is all but impossible. It is not really all that smart to even attempt -- unless you literally have cash on hand to quickly purchase at what seems like the "bottom" you risk having to deal with a financial system that could be paralyzed -- I know first hand how frustrating that can be as I tried to help a few clients scoop up deals in late 2008 / early 2009 from sellers in dire straits and that was enormously stressful...

What does make sense is to factor in a variety of PERSONAL worst case scenarios and then get a realistic sense of what can be a smart way to "ride them out" -- the experience of the previous housing collapse shows that though there was price decline across the board the most desirable areas in this region both declined the least AND bounced back most impressively. It is also important to realize that there was generally NOT a complement devaluation of all good services. This is especially important for anyone that falsely things it will be cheaper to build a new home during / after economic difficulties OR EVEN someone that foolishly over-buys on a fixer upper that STILL will need lots of investment to bring up to neighborhood standards.

I really do like the trends in Wheaton and believe it will weather any financial downturn BETTER than less desirable towns. I also think it is SMART to always try to focus on the nicest neighborhoods and then find the home that is underpriced because of easy to fix issues like bad staging / deferred maintenance. Depending on how much the roof eats into your ability to afford the house maybe it was a "deal killer" but also need to understand that if you can still afford to pay for the roof AND that would build equity in a nice home in a desirable part of town that might be a smart way to get into a costly town...

[ToriaT]

I'm so glad I put my money in a house instead of the stock market........I'd rather park it there than have wall street play with it.

[Taco1234]

We know many who've gotten burned... I also closely watch housing in our area and have seen many homes sell for less than they paid or close to breaking even. Definitely not saying that renting long term is a great way to go, but I wouldn't go around saying that investing in a house is a wise investment. If you'll be staying long term, fine... If not, could be a big risk. At this point we don't feel it's wise at all... I guess we'll see.

[Lookout Kid]

Originally Posted by Taco1234

We know many who've gotten burned... I also closely watch housing in our area and have seen many homes sell for less than they paid or close to breaking even. Definitely not saying that renting long term is a great way to go, but I wouldn't go around saying that investing in a house is a wise investment. If you'll be staying long term, fine... If not, could be a big risk. At this point we don't feel it's wise at all... I guess we'll see.

We bought back in Spring of 2013 when inventory was low and prices were rising for the first time in quite a while. We were nervous after so many years of a crappy housing market, but I'm glad we bought when we did. Our house today would probably sell for $30,000 more than we paid, based on comparables in the area. Though we don't plan to leave for at least another decade plus.

I'm sure there are still people in the neighborhood who bought in 2006 who are still not seeing those prices, but that seems to be more of the high end homes. We are definitely not in the most expensive home in our neighborhood.

[ToriaT]

I tend to stay in a house for years. I've never lived in a house I bought for less than ten years. So I believe its a safe investment particularly if you choose the time you can sell. Stock market is a crap shoot. Plus you don't get any enjoyment from the money there. Actually breaking even would not even be that bad what with the stock market down so much.

[Taco1234]

Well, I for one never said I'd rather put money in stock market... Our reasoning isn't to invest the money we would've spent on a DP somewhere else, but to see what happens when/if taxes sky rocket, etc...

I agree- spring of 2013 definitely saw a comeback! We know people who had bidding wars on their homes. That's when we actually sold as we saw an opportunity.

Obviously nobody has a crystal ball. With all of the bad news about IL and the economy in general, it's scary to drop a huge downpayment if you don't know if you will be staying. If it weren't for friends/family, I'd leave IL. I believe taxes are going to see big increases, which I would assume will drive housing prices down. Especially in GE, the taxes I see on most listings in the 6-700k range are 15k or higher. I just can't imagine people are going to spend big like that when jobs aren't as secure and the economy doesn't seem very stable. Will be interesting to see what happens in the next few years.