Real Estate is a local market and Chicago is now back to “normal”

« Chicago Home Sale... | Main | What is FHASecure... »

Wednesday Dec 05, 2007

Now let’s be real about what is going on. Gone are the days of buying a property pre-construction and selling it upon possession in 15 days with a 25% profit. Gone are the days where sellers are receiving three or four offers on a house that has seen 30% appreciation in just 2 years. Gone are the days where sellers are gaining huge profits and market times are 30 days or less. However, what many people don’t realize is that the market in Chicago has returned to "normal". Properly priced homes are now taking on average about 120-150 days to sell. Folks, for Chicago, this is normal.

The good news, which has been hidden by all the media hype and propaganda about how terrible the market is, is that in Chicago, the first 3 quarters of this year, according to numbers on file with the Chicago Association of Realtors, the market has appreciated over 4%. What? We aren’t looking at double digit numbers associating our market with Depreciation, but we are actually Appreciating?

Yes. The good news is that Chicago still remains a stable market. Why? Mainly because Chicago never saw the huge gains that places like Miami, Las Vegas and many California markets obtained. As they say, what goes up (artificially) must come down.

Granted, there is a problem with foreclosures in Chicago. We are ranked in the top 10 highest foreclosure cities nationwide. Does that mean out market is going to implode? No, what it really means is that people either 1) were tricked into products with artificially low "teaser" rates that have rates that have substantially increased or 2) they bought too much house based on "no doc" or "low doc" programs that were out there. Those people had no business buying those homes and they knew it would be a stretch making their payments if they lost just a little income.

However, while foreclosures are a hardship for some people, they are an opportunity for others. Banks do not want to own real estate and sell their REO (real estate owned) properties through companies like Dream Town. There are also Dream Town agents experienced in assisting buyers with the process of purchasing homes in various pre-stages of foreclosure, such as Lis Pendis, etc.

The main thing to remember here is that real estate has always historically shown to be a good long term investment. Where else can you invest 10% or 20% and leverage the rest. And banks LOVE to lend on real estate (with the right underwriting criteria. Try asking your bank for a loan for stocks, bonds or other commodities. Real estate still remains one of the best investments for your money. It is a great buy and hold, whether you live in the home of buy the property for investment purposes. Again, you can't depreciate your stock portfolio, but you can your investment property.

For more information about buying or selling real estate as either a primary residence or as an investment, feel free to contact me at mmiles@dreamtown.com

Mark Miles

Real Estate Consultant

312-953-9879

Posted at 07:06PM Dec 05, 2007 by Mark Miles in General Comments[0]