From Snowy Chicago, Good Evening, All!
You must remember - it wasn't all that long ago - the seeming never-ending cycle of homeowner migration and move-up. Young singles and newly-married couples around Chicago would start with a small condo as their first home. They would move up to a townhome, with more room, and more amenities.
When children came, the next move often involved a larger house in the suburbs, with shopping malls nearby, top schools aplenty, and lotsa room to grow.
Often, further prosperity and job security led to the purchase of a larger home, with even more deluxe features. Then another. Perhaps a third "trophy" home.
Many purchased second homes. A summer home in Rural Wisconsin, in the woods, or near a lake. Later on, a Retirement Home or Condo in Arizona, Florida, or The Carolinas. A ski condo in Utah, or Colorado. A timeshare in Costa Rica, even Panama.
Times have changed . . . yes?
According to the Urban Land Institute, in their study, "Housing in America: The Next Decade," and as reported in the Chicago Tribune by Real Estate Reporter Mary Ellen Podmolik, many older Baby Boomers - those in the Age 55-64 Group - have seen their home values slip dramatically. Many have little home equity left, and some are underwater - their current market value is below what they owe on their home mortgage (or, in many cases, MORTGAGES)!
Many Suburban Homes - especially those with larger homes distant from Chicago - are now not as appealing to younger buyers. Many prefer houses closer in to the city, to reduce commuting time and expense. Homeowners of every age may find the larger homes too big for their needs, and too costly to maintain.
Virtually every homeowner has seen the value of their investment and stock portfolios - those with components not related to real estate - dramatically fall in value. The additional disposable income needed to upgrade to a larger, more deluxe home, or add a second vacation property, is simply not there anymore!
All homeowners still in the labor force see their incomes have flattened - the promise of unbridled income growth, taken for granted just a few years ago, is not guaranteed now for most. Unemployment is still excruciatingly high, and a new air of frugality seems to have come of age.
So, what will result?
Those staying in their homes longer will now make improvements and upgrades that might not have been made when changing homes was so easy. Second home markets - beach towns on the Michigan side of Lake Michigan, for example, and those warm-climate golf-course communities in AZ or FL - may not quickly and permanently recover.
And homes will sell, buyers will still buy them - but it will likely take longer than it used to, stalling those impetuous "I want it all - NOW!"homebuyers so prevalent just a few short years ago. At least in the mid-term, many in Real Estate predict, those old-time, incredible gains and profits will be muted, even after the Chicago Real Estate Market truly recovers.
Perhaps that means a bit of a resurgence for Home Remodeling Contractors, trades people like plumbers and electricians, and those working, and running, the Home Depot and Menard's down the street.
Please read our post today via BlogChicagoHomes.com.
DEAN & DEAN'S TEAM CHICAGO