I can't tell you how many times I have uttered those very words in the past 3 months, 6 months, year, etc when discussing the real estate market and where it is heading. The fact of the matter is nobody can predict with certainty what's going to happen, with the exception of Ms. Cleo perhaps… and I wonder what she would say.
Have we seen the worst of the worst? Is now an opportune time to buy or would it be prudent to wait it out a little longer? Up until recently, I was unsure how to answer these very valid questions with conviction; this is no longer the case. A few things to take into consideration:
~ Crain's Chicago Business reported this week that "Home sales in the city of Chicago posted a monthly year-over-year increase for the first time in more than three years, while sales throughout the Chicago area rose for the third straight month compared with last year, according to the Illinois Association of Realtors. In the city, sales rose 5.8%, with 1,918 in September, up from 1,813 in September 2008. That was the first year-over-year increase in sales since May 2006." This is very good news, indeed.
~ The increase in home sales is in direct correlation with the $8,000 federal tax credit, which the National Association of Realtors (NAR), key congressional leaders, and various other groups are lobbying to extend past its December 1st expiration date. They argue that the tax credit is helping to stabilize home prices and create thousands of jobs that rely on housing. With that extension, we could expect to see a continuation of the housing market upturn and stabilization of prices.
~ Although we are seeing a rising number of home sales, actual sale prices continue to decline due to the continued influence of foreclosure auctions and short sales. The Illinois Association of Realtors has reported that the median price of homes (single-family and condos) in the nine-county Chicago area is down 10.8% since September of 2008.
~ Aside from private home sellers, the incentives and price drops offered by local developers trying to move their inventory is unheard of. I remember the days not too long ago when working with a buyer client who wanted to negotiate with a developer. "Highly unlikely" and "I wouldn't count on it" were common phrases that would escape me. Now we are seeing price cuts of epic proportions, closing costs paid for, and/or parking thrown in for free.
Clear indications of an improving market, continuing record-low mortgage rates, distressed sellers/developers, government incentives, and lowered home sale prices:
Is now the right time to buy? All signs are pointing to "yes".
Posted at 11:08AM Oct 26, 2009 by Chandra Rose in Market News Comments[2]
It would be fantastic too see into the future. The gambling part of real estate is the hard part. If you guess right on real estate, and the market for the house goes up, it was a smart move. If you guess wrong on real estate it can bankrupt you. If you find a crystal ball that tells the future let me know lol.
Posted by Staten Island Real Estate Agent on October 28, 2009 at 11:37 AM CDT #
Long time fan, first time writer!
Anyway, quick question for you. As a Canadian investor with an eye towards the US market, are you seeing a good degree of penetration into the Chicago market from foreign investors, especially with dollar parity here in Canada and relative weakness vis-a-vis most other currencies?
Love you in blue, keep up the good work!
R.L
Posted by Reggie on November 03, 2009 at 03:55 PM CST #