Do you want to help heal the U.S. economy? Don’t list your house for sale this year.
That’s the main point I took away from the Chicago Association of Realtors’ Regional Economic Forecast 2009, held January 15th at the Palmer House. The panel, which I moderated, featured presentations by three economists and a leading Chicago real-estate analyst. The consensus among them was that the key to a housing recovery is getting more people confident that this is a good year to move.
“Let’s get buyers back into the market to absorb [housing] inventory,” said Lawrence Yun, the chief economist for the National Association of Realtors. Yun and others talked about various ways to do that—such as publicizing data that show housing is far more affordable now than prior to the boom, and by making the $7,500 first-time buyer’s tax credit, a temporary measure, a permanent addition to the tax code.
– Chicago Magazine‘s Dennis Rodkin, from his recap of the Chicago Association of Realtors’ Regional Economic Forecast 2009. One of the many Realtors in attendance was Rubloff‘s Eric Rojas, who shared 10 highlights of the conference on his blog, The Chicago Real Estate Local.
Any sellers that would want to sell but decide not to list because of the environment will just add to pent up supply and eventually list in this cycle affecting fundamentals in future years.
Any potential buyer should take a long view. These cycles take years to resolve. If you don’t have years to wait then don’t try to time the market. I have years to wait, fortunately.
But if I was a seller of my primary residence and not needing to move, why bother? Its only those sellers that need to sell that will wind up in distress. The only people I see as going into distress are those that bought within the past five years and need to move already. It is widely known that with real estate you should not be buying if you might need to move within the next five years.
So just pretend there isn’t a problem and it will all go away? 🙂 I mean it IS good advice, unless you really HAVE to sell, then don’t bother because you won’t get the price you’re looking for.
Abuyer,
What’s your point? You keep repeating variations on the same tired mantra. It’s like listening to sitar music hour after hour. Annoying to many.
It’s completely mindless as well as pointless to say that sellers across the board won’t get what they’re looking for. Some sellers are going to underprice this difficult market in order to move on quickly. They’ll get what they’re looking for. Other sellers will get what they’re looking for after a market time they anticipated. Etc.
Its all about the property, some properties are wortth so much and others arent’t..somtimes even in the same building. Properties with premium view, nice finishes, and those that are well kept and look like they have been taken care of sell. Not everyone wants to buy dumps and fix them up no matter what the price is. People pay a premium for properties that have something to offer in the long term. Ive said it before and i’ll say it again, as soon as the most desirable units are absorbed in the next 12-18 months and with construction looking like it will not start up at least for severla years, many people are going to be shocked at the amount of crap that will be left available and will be asking themselves why there is nothing good to choose when there is so much “inventory”. Ineventory is just a number wheras residing in aplace for 5-10-15 years is much more than that.
I don’t believe housing is “more affordable than prior to the boom”, unless someone has found a way to spin it, despite low interest rates. Take any pre-2001 price at pre-2001 interest and compare the lower interest rates with the higher price for a desirable neighborhood, and I doubt you will get more affordability. The condo I bought in Uptown sold for $75,000–at 20% down at 9% interest (generous!) in 1997 does not compare to today’s mkt. value of $175,000 at 4.5% interest 20% down. (I got $482 vs. 709, and Uptown’s got decent areas but it’s not “that” desirable)
Brian,
Much of Uptown is more desirable today than it was in 1997. I’m saying that from the perspective of someone who’s been a long-time skeptic on Uptown.
There’s also been a substantial increase in income levels from 1997 to today, and a substantial increase in the number of households seeking near-lakefront Chicago housing.
I agree with Simon. Let’s use a young family example looking for a home under $400K, a sizable amount, and they want to keep the family east of Kedzie for a tolerable commute downtown. It gets pretty tough and inventory is low if you want anything better than a three bed, two bath condo in a nice neighborhood. Forget finding a decent house to move into in a safe neighborhood. A decent 3 bed condo or town-home with a family room, parking and close to a train under $400K is a huge score.
Same goes for downtown… I agree with the analogy that the units with views, nice finishes, amenities and in quality buildings are a premium and sell well. The sales numbers showed sales activity strong in some buildings and tiers over the past year and terrible in others.
The party is over for crappy units, crappy locations and guaranteed appreciation…and in many cases as we all know, prices are way down.
But the decision to sell is based on the individual units, owner’s situation and the location, not on the entire Chicagoland market.
I bought two years ago and will easily sell for a good percentage more today if I listed. My condo neighbors sold in the last year of doom for $35K more for than they paid for theirs in the infamous end of 2006.
Of my clients alone, it’s probably been (and will be) 50/50 they’ll sell for more than they paid (after commissions, closing costs etc…) if they bought in the last 4 years. You have to gather the facts and pulse of the likely buyers.
I guess Joe doesn’t understand basic economics. My comments were agreeing with what was said in the article. If there is more supply, i.e. everyone that wants to sell is selling, and the same amount of buyers is out there, which may or may not be true, but with more difficult to obtain financing prices will drop. Hopefully low interest rates will bring out more buyers, but the times where banks are giving out loans to anyone with a pulse is over. Its basic economics and I’m not saying anything derogatory about the article, i’m agreeing with what is said.
If you want to sell your house and not get bent over on your price, and have no immediate need to sell, then wait a few years.
Abuyer,
Try grasping this simple point ….
I understand basic economics. Everyone here understands basic economics. Most of us have a far firmer grasp of economics than you do.
You aren’t telling us anything we don’t already know but yet you persist in telling us the same thing over and over.
If you know something we don’t, we’d love to hear it.
There are good deals out there… In good neighborhoods… just don’t expect your realtor to find them all, or negotiate aggressively enough for you. You have to do a lot of work yourself.
Joe, word I hear is X/O is off of the MLS…is this project in the dust-bunny listing?
X/O’s been on the list since Day One, Jeff.
Jeff,
If that’s the case (not in MLS), and it appears to be, all it means is that it’s not in the MLS, as many developments are not.
We’ll follow up and see what we can learn.
Abuyer,
You continue to belabor the obvious in an overbroad fashion. What you’re saying is correct with regard to some Realtors and wildly misleading with regard to many.
You really ought to spend more of your time at CribChatter.com.
Fine, i’ll be more specific. You’re a douchebag!
Abuyer,
You’re a guest here, and I’ve made it clear I have a low tolerance for your sort. If you can’t clean up your act you’ll be banished back to CribChatter.
Why do you even want to be here when it’s such a burden on you to behave in a civilized fashion?