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CHICAGO, U.S. HOME INVENTORY REMAINS HIGH - Our Buyers, Sellers React!

CHICAGO HOME, CONDO INVENTORY UP 2.7% IN FEBRUARY, NOW 17.2% HIGHER THAN FEBRUARY, 2007!

According to a national survey commissioned by national discount real estate broker Zip Realty indicates unsold home inventory across the U.S increased during the month of February.  Versus January, 2008, the number of homes for sale increased by 1.2 percent.

Here in the Chicago area, available home inventory increased by more than double the national figure, month to month, between January and February.  Since February of 2007, available home and condo inventory here increased an incredible 17.2%.    Further, of 72,842 residential single family homes and condos available for sale at the end of February, 38% had reduced their price, some by a considerable amount, during their listing period.

See Mary Umberger's column in the March 16th edition of the Chicago Tribune for more insight.

Here are a few observations we read from our Buyer and Seller Clients as the First Quarter, 2008 draws to a close -

1.  Sellers are surprised, then disappointed, with resulting decrease in their market value.  When we are asked to evaluate the market value of our client's homes, we answer their questions truthfully, based on the reality of today's market.  Often times, we feel like an emissary of the worst news - they often respond by saying they will put off their plans until the market gets stronger.  They will wait until they go to market.  When we explain that when their sales price gets stronger, the price of the house they would buy would also increase - they often disbelieve it!

2.  Buyers feel they can STEAL available property!   One client is considering a transferee's house that was purchased for $325,000 two years ago.  The seller is asking $305,000.  Mortgage balance on the property - $301,000.  Market value, in today's terms, is about $275,000 to $280,000.  Feeling the need for "payback" after he sold own his house for lower than he paid for it two years ago, our Buyer Client has offered $255,000 for the new property - even though it offers all the features and benefits he and his family want, and it will most likely sell at a loss to the seller.  His reaction - he doesn't care - there are over a dozen other houses nearby, and he wants to "strike the best deal," above all else.

3.  Many Prospective Buyers are waiting on the sidelines for prices to drop even further.  These folks, often with weak motivation, say they will wait for big drops to continue - as they follow rate cuts and weak housing industry news with great interest.  They don't understand, however, that it is often tough to accurately "time" the market.

4.  A few buyers seek out properties that are way above their target price range, thinking they will get 40 and 50 percent discounts when they buy.  Some folks are sending us Properties of Interest over $350,000, even though they cannot afford over $250,000.  Unfortunately, when we refuse to pursue wild dreams on behalf of these prospective buyers - they go to another real estate agent or team.  Often, out of desperation for business, these other real estate agents pursue any properties suggested by the buyer, regardless of the buyer's financial situation or qualification level.

5.  Loyalty to one Real Estate Practitioner is very tenuous, as both buyers and sellers have become very frustrated with the current real estate market.  Since their Realtor is the closest personal connection to today's Real Estate Market, they often get the blame for all that has happened.

6.  Buyers and Sellers don't fully understand what has happened to the mortgage market.  Two years ago, virtually anyone could get a high-leverage mortgage, with ease.  Today, those with blemished credit or without strong down payments have the most difficulty.  Many feel there has been negligible change - and are surprised to learn they may not get the same high-leverage, low-rate, interest-only mortgage is just not available anymore.  They often retreat into indecision when they verify this!

7.  Buyers ask for "everything but the kitchen sink" during the post-contract inspection period - big repairs or repair credits!   They feel they are in the driver's seat, and sellers will comply with their requests.  Often, they do!

8.  Buyers who successfully find an incredible deal, and large inspection credits, tell everyone they know.  The cycle continues!

Hard statistics lead to personal, professional observations.  Buyers, sellers - expect these "new attitudes" to continue, until inventory balances demand.  According to many experts - even with continued Fed rate cuts, and Economic Stimulus Package incentives - that balance may be many months away!

DEAN MOSS & DEAN'S TEAM CHICAGO

Posted: Sunday, March 23, 2008 5:17 PM by Dean's Team

Comments

BlogChicagoHomes.com said:

Good Morning, Everyone! Here in Chicago, the Active Inventory of Homes and Condos for sale is 17.2 percent

# March 23, 2008 6:46 PM
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