Here in Chicago, and in most Chicago Suburbs, Average Home Sales Prices have fallen considerably since their zenith in mid-2006 - nearly 5 years ago. In some Chicago Neighborhoods, in the experience of our Team members, condo prices are one-third of what they were during those "buy at any price" days. Many single family homes have shed 40% or more of their potential cost versus the housing boom here.
On the surface, it seems, many home sellers have gotten the message, and are willing to lower their prices - often substantially - to meet the new market and sell their homes in a timely fashion. Even so, many of today's buyers still feel homes they are considering are overpriced - some by as much as 20%!
The findings come from a new survey just released by HomeGain, a company which sells names of prospective home sellers, generated through their Internet Marketing Programs, to Real Estate Brokers and Agents across the U.S. Chicago Tribune Reporter Mary Umberger discussed the company's findings in the April 8th edition of The Trib.
Is this counter-intuitive, perhaps? Wouldn't it make more sense for home sellers, tired of the continuing declining market in many Neighborhoods throughout Chicago and the Suburbs, to understand the necessity of pricing right? Doesn't it seem reasonable that prospective home buyers see these newfound discounted homes as true values, swapping them up quickly?
Not according to the HomeGain survey, apparently!
Of nearly 750 Real Estate Agents surveyed nationwide, responding agents indicated that 76% of the owners they eventually contracted with to sell their homes thought their listing price was too low.
The HomeGain Survey also polled 1,600 potential home buyers. They found that 69% of them still thought most homes on the market were overpriced. Of those, 33% thought they listed homes they viewed were as much as 10% too high. Another third felt their viewed homes were too high by as much as 20%!
The drumbeat of the media tells home buyers bargains abound, and, indeed, many of our Team's prospective buyers say they are looking for an "incredible bargain" when they buy.
However, far too many sellers feel trapped in a too-high price range. The high-leverage financing many took out several years ago has left them underwater and owing far more than their homes current market value. Often, their only options - not selling at a price a buyer would likely pay, completing a "Short Sale," where the bank approves a sale for less than the outstanding mortgage balance, or simply walking away, and letting the home fall into foreclosure.
Further, according to the survey, many Real Estate Professionals feel housing may continue its price slide through 2011. However, 17% of agents surveyed felt home values in their home neighborhoods might actually increase a bit in the short term.
Most in the know agree that the expiration of the Federal Home buyer Tax Credit, exactly one year ago this Saturday, had a chilling effect for many home buyers. Without the incentive to "buy now," it appears as if many home buyers are sitting on the sidelines. Some see buying a house now as a declining-value risk, while others see the possibility of facing home price distress down the road if the Real Estate Market here does not turn around.
In all, the results are very confounding, at a time when Mortgage Interest Rates remain historically low, and qualified home buyers can pick up a house in a desirable Chicago Neighborhood or Suburb for a fraction of Housing Boom prices.
See our post today via BlogChicagoHomes.com.
DEAN & DEAN'S TEAM CHICAGO