Here's the deal. Recently, I've been following the Chicago real estate market and things don't look so good. Why? Well,for one thing there are a lot of homes listed on the market. Another thing, foreclosure and short sale listings splatter the pages. Moreover, asking prices continue to go thru corrections, i.e., price reductions, after being on the market for 3-6 months with no bids.
Chicago is littered with high-rise apartment buildings and if you were to find one apartment for sale in one of these buildings you are likely to find 5 others available for sale. Competitive pricing is key if you want to really move your home. But, this doesn't bode well for any of the sellers or the other residents who own in the same building. Home values are still being re-priced.
Single family homes in popular neighborhoods that fetched $1.25 million 3 years ago are now priced to sell at $750,000. That's a 40% reduction in asset value. Ouch! But, the sad part is that no one wants to buy despite the "deal." Frugality is en vogue and having a 4 bedroom, 3 .5 bath home is just too excessive. These homes are just not getting moved.
What this says is that overall home prices are still trending lower. Owners are still holding steadfast to property values attached from 3 years ago. They are just hoping for a rebound while trying to hold on as long as possible. What homeowners fail accept is that there are very few buyers right now and that there are even fewer buyers with the cash to make the deal happen.
Reality will catch up one day when price and demand meet.
No comments:
Post a Comment