LIL’ BUDDY’S BLOG – THE SKY? IS IT REALLY FALLING?
LIL’ BUDDY’S BLOG – THE SKY? IS IT REALLY FALLING?
THE CHICAGO REAL ESTATE MARKET AND OTHER THINGS CHICAGO FROM THE POINT OF VIEW OF A LITTLE WHITE DOG!
Man you should have seen the cake – peanut butter mmmmm! And that steak dinner Dean & Sue took me to – I guess they really WILL let a little white dog into Gibson’s – so long as you know how to tip the captain! (It was a little wierd however – I had to wear one of Dean’s tweed sport jackets and a couple of pairs of his dress shoes)!
The more you read the papers these days scan the web and watch the news the more you might think the Real Estate Market in Chicago – for that matter across the USA – is dead. Is that really true?
I began to do some digging (that’s one of the things we dogs are good at you know!)
First I sat down with Dean’s Team at our regular Wednesday Team meeting and reviewed the books. Thus far in 2007 our Team has written or sold nearly $9.5 Million in residential and investment real esate in Chicago and the suburbs. For the same period in 2006 our little group sold just over $8.9 MIllion. We’re up 6.7% 2007 versus 2006 with four more transactions sold this year as opposed to last year.
I then looked at comparative statistics from The Multiple Listing Service of Northern Illinois. For the six month period between January 1 2006 and June 30 2006 a total of 3106 homes condos or two-four unit apartment buildings closed for a total sold volume of $1096146177. The average sales price for that year-ago period was $352912 and the average market time – 93 days.
Fast forward to January 1 2007 through June 30 2007. The number of units sold dropped 12.6% to 2715 volume off 15.7% to $923868432 average sales price down 3.6% to $340283 and the average market time increased 44.1% to 134 days!
Today there are a total of 4739 residential and small investment properties on the market. Using these recent sales numbers the current absorbtion rate or the number of months it will take to clear existing inventory is 10.5 months! In essence if you put your house on the market today you have less than a one in ten chance of selling it in any given month – or as a Chicago Cubs fan might say – a nine out of ten chance you WON’T sell!
If you believe these numbers the sky is falling – but not so badly when you compare things to the nearly "automatic" seller’s market we all experienced between 1998 and 2004. Averaging real estate appreciation back 25-30 years indicates housing is still the best investment around but the average dog who bought at inflated prices in 2004 or later doesn’t want to hear that! Many of these recent home owners are still taking a bath today!
Let’s look in the papers and on the web. This article from the July 26 2007 edition of The Wall Street Journal is typical – more slow sales months are predicted across the country but a recovery is predicted beginning in 2008 through 2009. Several metro markets across the country have been surveyed. As a long-term trend however real estate can’t be beat!
Well let’s all stick in our paws and draw some conclusions!
Sellers if you need to sell now – be aware of the INCREDIBLE INVENTORY SIZE in your local area. Price your home agressively perhaps even on the low side of the market slightly. And just as importantly stage and show your home so it will look head-and-shoulders better than any competition.
Buyers bargains can be had out there. But the best looking best priced houses will still sell briskly. Be a good shopper but but don’t expect to be a successful thief!
Investors including just-plain homeowners hang in there – long term history suggests that you’ll be fine. But now is not the time to too highly leverage or plan for a fast-buck turnaround.
In general not necessarily all the news you wanted to hear – but no the sky is not falling either.
Stick it out! Now you dogs where’s the rest of that big steak from last night. How about some A-1 Sauce?
YOUR ACE REPORTER ON FOUR PAWS
BUDDY HOLLY MOSS
