Home Sales Down, but Prices Up?

 Chicago area market statistics were released a few days ago.  They showed that home sales were down 19% in the second quarter of 2007 as compared to the same quarter last year.  While this news appears quite disconserting, it is not indicative of a market crash or falling home prices.  In reality, while the number of home sales has decreased, the value of homes have not as the average sale price in the second quarter this year is 2.6% higher than that of last year.  What we are seeing is a market correcting back toward normal after a peak.  Let me explain further

The large price reductions that have become the norm are indicators of changes in listing or asking price not sales prices.  Meaning that at the height of the market a couple years ago listings were being severely over-priced and for good reason too.  Realtors were trying to get the most money possible for their clients and buyers were willing to pay it.  As supply increased, (new developments + resales) buyers were unwilling to buy over-priced listings and that is where price reductions and incentive plans began to come into play,  when supply surpassed demand. 

This article from Crain’s Chicago Business should help further illustrate the point: http://chicagorealestatedaily.com/cgi-bin/news.pl?id=26012

In light of these factors, buyers have myriad options to choose from and moreover, room to negotiate.  It’s a great time to find a DEAL!

 Happy Home Hunting!

 Best,

JLC

Market Update – Buy Low!

I would like to address some of the doom and gloom scenarios propagated by the national media.  Maybe not address, as time and space will not permit that sort of undertaking.  However, I can at least provide an alternative perspective. 

We all understand that markets are cyclical.  This implies not only will prices rise and fall, but moreover, as prices rise and fall conditions will be more beneficial for Sellers and Buyers respectively.  Common sense compels us to follow the mantra - buy low, sell high.  Yet , when it comes to an investment of the magnitude of a home we tend to hold off, waiting for the perfect moment.  There is no perfect moment, but let us not forget….Buy Low.

If you have the time, take a few moments to peruse the articles I attached below.  They should help to provide a more complete depiction of the snapshot I have offered here.

Real Estate Sky Won’t Fall: Here’s Why

by George Mantor

http://realtytimes.com/rtapages/20070607_skyfall.htm

 

Markets May Have Hit Bottom

by M. Anthony Carr

http://realtytimes.com/rtcpages/20070615_marketshift.htm

Contact me with any questions or to clarify any points made in the articles.   Have a great evening!

Local Charm, International Appeal

“…there has been more interest in Chicago on the part of property investors from around the world in the past three years than during any other period in the city’s existence.” (Making a Modern City, Urban Land March 2007)

 Generally I provide a link to any articles I reference, however the urban land website has restrictions on article access.  Here is a link to the site in case you want to become a member.

http://www.uli.org/Content/NavigationMenu/DiscoverULI/LeadersinOurField/Publications/UrbanLand/Urban_Land_Current_a.htm

Certainly part of the influx of foreign investors into the Chicago market can be attributed to the favorable position of the euro and other foreign currencies against our dollar.  But moreover, market forces are directly in contradiction to the strong seller’s market of just a few years ago.  The article goes on to discuss the Chicago’s deverse economic output as it converts from a manufacturing center to a “white collar economic power with global reach.” (Urban Land March 2007)  Due to the surplus of homes currently on the market, buyers and investors are presented a unique oppurtunity.