Any Home Sales in North Suburbs? (Chicago, Glenview: days on market, for sale, foreclosures)

[SBD]

We've been thinking about putting our house on the market - but there seems to be a saturation of homes for sale everywhere and certainly in the northern 'burbs. Is anyone seeing houses selling in the north suburbs - areas like Northbrook, Glenview, Lincolnshire, Riverwoods? There are some huge deals available - but with the economy and perhaps the very stringent rules on being approved for a mortgage now - I'm wondering if/when this market will pick up for homes in the $600 - $700's range. Any thoughts?

Thanks

[cohdane]

Check out Redfin.com. They have a feature that will let you see, down to street level EXACTLY what has sold for how much in the last few years. Then use Google.com to check out the addresses that recently sold-- enter in the street address and when the listing links come up, DON'T click where you normally would, click on the little blue word "cached." That'll let you see previous listing prices so you know what they were asking vs. what they sold for. The further back you go in the Google listings, the closer you'll get to the original listing price.

Whether your home will sell depends entirely on where you price it. It's true not much is selling, but homes that come on listed below 2000-2004 sales prices are moving. If you bought during the bubble (2000-2006) and are looking for a profit, don't bother listing or be prepared not to sell.

The North Shore, northern suburbs and much of Lake County is SCREWED right now. Too many developers built too many McMansions and there just aren't enough high-income types to absorb them all. Especially in this economy.

It's actually frightening. You know that all these $1million+ homes have to sell before we can see where the market really is, but they're not moving. There's 3-4 year inventory of them in some areas. So they're becoming $900k homes, $800k homes, crazy luxury rentals, short sales, foreclosures.....what does that do to the $700k homes? What does it do to the rest of the food chain?

When the million dollar new construction mansion finally sells for $800k, $700k for a 70's colonial will look pretty ridiculous. And $600k for a 50's split-level that "needs updating" will feel downright delusional.

A general rule of thumb a lot of buyers are using right now-- just to keep themselves from becoming the next crop of underwater owners-- is looking for 3%-4% annual appreciation over what a home would've sold for in about 1999. Nobody wants to get caught holding the bag on a bubble house.

So....if you've been in your house a long time and price below the competition, your home will probably get purchased fairly quickly. There are a lot of fence-sitting buyers-- not looking for "steals," but just "safe" pricing. When I see a home in the $600-$700 price range that isn't bubble priced, it usually goes under contract within a month.

I think by the time the market "picks up" in terms of number of sales, the homes will be worth significantly less than they are right now. My guess is it'll be at least 10 years before you can sell your house again for what you could sell it for tomorrow. (Barring hyper-inflation.)

Hope this helps. Obviously, just one's person's perspective, but I've been watching this very closely and that's what I'm seeing. I wish I weren't seeing it. It's awful.

[Paige65]

I know a handful of people who think there are good deals out there, and aren't afraid to buy now - even if home values decline a little more after they purchase. But they worry about being able to sell their own home. They can't afford two mortgages, which are a significant potential reality in this market, and that's why they are staying put. A lot of these would be buyers are in the $700-$800 market.

If I were in the market for a new house, and I didn't have a house to sell, I wouldn't hesitate to buy now. But I'm not looking for the lowest price and I'm not that concerned about where the very bottom of the market will be. But I'd be buying a house for the long term, and that makes a difference.

[GoCUBS1]

I'm a buyer sitting on the fence. Sold my house last year and am looking for the deals in the N or NW burbs (in the $700K - $900K range). Since interest rates have dropped, I'm now ready to lock in. But I still see many houses that are overpriced. For me, it's all about price. I will not buy an overpriced home in a depreciating market. I will buy the house that is priced right regardless of upgrades. I am willing to do some renovation work on the home as long as it has good "bones" and a good location. I'm not sure if other buyers have the time or inclination to do this work though.

[GoCUBS1]

Originally Posted by cohdane

It's actually frightening. You know that all these $1million+ homes have to sell before we can see where the market really is, but they're not moving. There's 3-4 year inventory of them in some areas. So they're becoming $900k homes, $800k homes, crazy luxury rentals, short sales, foreclosures.....what does that do to the $700k homes? What does it do to the rest of the food chain?

When the million dollar new construction mansion finally sells for $800k, $700k for a 70's colonial will look pretty ridiculous. And $600k for a 50's split-level that "needs updating" will feel downright delusional.

Agree with your assessment.... I'm only looking at homes priced significantly below the competition (e.g. long-term owners, corporate relo's, foreclosure, short-sales). I've seen some previously million dollar McMansions now going for $800K. Unfortunately, I'm not a McMansion kind of person. I like to live near the town center/Metra but that's where I find the smaller 70's colonial homes that are still in the $800K range. These older homes have not seen the drop in price yet. And maybe they won't drop as much as the McMansions in the cornfields. Anyone have advice for a buyer like me?

[cohdane]

Originally Posted by GoCUBS1

Agree with your assessment.... I'm only looking at homes priced significantly below the competition (e.g. long-term owners, corporate relo's, foreclosure, short-sales). I've seen some previously million dollar McMansions now going for $800K. Unfortunately, I'm not a McMansion kind of person. I like to live near the town center/Metra but that's where I find the smaller 70's colonial homes that are still in the $800K range. These older homes have not seen the drop in price yet. And maybe they won't drop as much as the McMansions in the cornfields. Anyone have advice for a buyer like me?

Count the number of 70's colonials at $800k on the market. Now count the number that have sold in the last year. $700k? $600k? The news isn't much better.

They're not moving. They're overpriced. They're coming down. It's inevitable.

The McMansions that are crashing right now aren't all out in the cornfields. Do a search in the $900k to $1.2 million range in any northern suburb and you'll see a world of pain. Redfin gives you a peek at how long they've been sitting and how much they've reduced the prices. (Most play tricky games with new MLS numbers so that the listing doesn't look as stale as it really is and only half the price reductions show up.)

They're foreclosing on Sheridan Rd. They're doing short sales near the lakefront. They're attempting to rent 6 bedroom homes in top school districts. Some are tragically left vacant and rotting from the inside out. Not pretty. PM me for specific addresses if you want/need hard evidence.

Hold tight and keep an eye on inflation. A 70's colonial was never worth $800k. The sooner the market finds its level, the better for everyone. Painful, but necessary.

This isn't about waiting for the very bottom. It's about waiting till the price levels aren't so out of whack that you're going to be in the hole $100k one year after you buy. And maybe more the following year.

That said, decide how much of a loss you're willing to absorb for a house you love. You may find it before the bottom.

More hard facts/evidence? Go on Redfin and pull up all the sales back to 1997 for a several block area you're interested in. As your cursor floats over a properties, its last sale price will appear. If you see a price that seems "reasonable" it's probably from 2000 or before. "Steep" is usually 2002-2003. "Crazy" is after 2003. It puts it in perspective very quickly.

Homes don't go from reasonable to crazy in five years.

PS. They're still crazy.

[cohdane]

This just in from Businessweek magazine....Winnetka is the poster child for the struggling luxury home market. The only city that had a higher number of days on market was in Florida:

Luxury Homes Are Lingering on the Market - BusinessWeek

"Take Winnetka, Ill., a wealthy suburb 16 miles north of Chicago. The median listing price is $1.5 million, up 12% from a year ago, according to Altos Research. But the mix of listings has shifted to the higher end, and properties are taking 245 days to sell."

"Even though the listing prices are up, this could be the net effect that the houses on the top of the market are coming onto the market because of the negative economic environment," said Scott Sambucci, vice-president for data analytics at Altos Research. "Even though the list prices are higher, it doesn't always mean that the market is strong."

The rest of the North Shore isn't much better.

[SBD]

To open this post up again - I am seeing a lot of houses under contrct in Lincolnshire. Not much in Riverwoods. A decent amount in Northbrook. Seems that with the combination of low interest rates and what apears to be a bottom for the market plus the tax credit for new home buyers - things are starting to pick up again. Not great but there are definitely byers out there again.

[chet everett]

Originally Posted by SBD

To open this post up again - I am seeing a lot of houses under contrct in Lincolnshire. Not much in Riverwoods. A decent amount in Northbrook. Seems that with the combination of low interest rates and what apears to be a bottom for the market plus the tax credit for new home buyers - things are starting to pick up again. Not great but there are definitely byers out there again.

There are?

Of course. Anyone with eyes can see that some of the "log jam" is clearing. Even I am NOT going to say that means "smooth sailing" but after untold months of too much bad news and not enough affordable credit there are shifts happening that can mean some people are going to get what they want.

BTW Are the homes that are selling primarily the ones that come with large vegetable gardens and ready access to deer or elk so that we can weather the coming famine?

Hmm?

Yes, we are at RECORD HIGH number of TOTAL SOULS ON UNEMPLOYMENT, but maybe we have made it a bit too easy to be on unemployment and maybe THAT will change. Or maybe we are in "year one" of a "lost decade". No tent cities were ever highlighted on the evening news in Yokohama or Sapporo. Our media HATES us, while other countries have media that wants the same thing it people want...
Remember that when you read the NYT and then get a copy of an English translation of the Ashai Shimbun...

[mh7]

Originally Posted by SBD

To open this post up again - I am seeing a lot of houses under contrct in Lincolnshire. Not much in Riverwoods. A decent amount in Northbrook. Seems that with the combination of low interest rates and what apears to be a bottom for the market plus the tax credit for new home buyers - things are starting to pick up again. Not great but there are definitely byers out there again.

The new home buyer tax credit is basically meaningless for anyone purchasing in a mid to high end suburb as the income required to support a 400k+ mortgage exceeds the limit where the credit phases out.