IN CHICAGO Home Prices Continue To Fall – Now Previously-Stubborn Sellers are Beginning to “Get It!”
IN CHICAGO Home Prices Continue To Fall – Now Previously-Stubborn Sellers are Beginning to "Get It!"
FORECLOSED HOMES – DRIVING DOWN SURROUNDING PRICES – MADE UP 43% OF HOMES SOLD IN COOK COUNTY IN PAST 90 DAYS – CLEAR CAPITAL RESEARCH!
As a Real Estate Practitioner applying an accurate Listing Price on a home has been like applying a price tag to the side of a roller coaster going downhill – with only a little spit! Even our best attempts at "accurate market pricing" are often too high and the home eventually sells for far less than we would have imagined at the beginning of the marketing term.
For a long time when you offer a price level that in the opinion of the seller is "too low" they send you on your merry way and make no more than a phone call or two to a find more "agreeable" Realtor who would gladly take their listing at THE SELLER’S PRICE! No business for the good guy!
But now sellers are ever so slowly beginning to "get it" – to price their homes aggressively and correctly for today’s market. A few sellers opt for even more aggressive market pricing.
Chicago Tribune Reporter Mary Ellen Podmolik in her Real Estate Column in last Monday’s Chicago Tribune one home seller in the West Chicago Suburb of Elmwood Park IL dismissed the advice of his experienced area Realtor as to pricing instead opting price his home for sale a full $25000 higher than what the agent advised.
Regretfully she took the overpriced listing and few showings were scheduled. Only by reducing the price by this $25000 plus another $16000 for good measure did the seller get any truly meaningful activity on their home. It is still not sold.
According to Popular Real Estate Website Trulia.com nearly one in three (31%) of the residential properties have been reduced in price at least one time. In June only 29% of listed properties here in the Chicago Area had at least one price drop. Last April that benchmark number was 26%. Across the U.S. 24% of homes listed for sale within the last 90 days had at least one price reduction.
Some Chicago Neighborhoods have seen even more dramatic price reduction activity. In parts of the Lincoln Park and Logan Square Neighborhoods of Chicago 35% of listings on the market in June have had price reductions with the average reduction from initial price 8.2%. Near Millennium Park in The Chicago Loop 43% of the active condo listings have endured price cuts. The average reduction in price is this Downtown Chicago Neighborhood – 6.6%
In areas of Chicago where investment in condos is high many of these non-live-in owners are getting rid of these non-performing real estate investments at a loss – many via short sale where the bank agrees to accept less on the sale than the outstanding mortgage balance.
Today sellers who for many months would not reduce their prices to what the market would bear are beginning to cave in just so they can shed their slow-to-sell homes – even if the end result is less than the purchase price and their realization in home equity on the sale is minimal or even negative. Indeed the prevalence of low-priced short sales and foreclosed properties in many Chicago Neighborhoods and Suburbs has effectively lowered the average price on all available properties.
According to data from the latest-available April S&P/Case Shiller Home Price Index Chicago Home Values on average now stand at the same level they did during the Spring of 2002!
DEAN MOSS & DEAN’S TEAM CHICAGO
