Hope you enjoyed the weekend, folks! Nice, but a bit cool and breezy, here in Chicago.
Here in the Chicago Real Estate Market Dean's Team works most frequently, prospective home buyers calling from all sources - referrals, property ads, and the Internet - generally ask one question FIRST as it pertains to their home search -
WHERE CAN I FIND A STEAL!
Our own perception, often times, is that most new buyers we encounter aren't just looking for a "Good Deal." They are looking for the "Steal of the Century!"
Most of these prospective buyers have little money down. Some have Average or Below Average Credit. But those who have stronger credit credentials, and more cash - they want even more of a STEAL!
Everyone considering any kind of real estate these days believes Home Sellers, so desperate to sell, will happily give their homes away. Some have had the unpleasant experience of selling their own home at far less than they ever would have recently imagined, and hold less equity in hand to buy their new home. Falling short of simple retribution, many feel they can more than make up their own losses when they buy a replacement property.
Others see the over-the-top inventory of Short Sale and Bank Owned Properties at deeply-discounted properties. Not understanding the complications often involved with buying distressed properties, and their often below-average condition, dream-filled buyers see even stronger savings to be had by shooting a Lowball Offer on one of these homes.
Virtually all buyers see a lack of urgency in making a commitment to buy quickly, as they see a continued-weak economy, high unemployment, and so many homes from which to choose due to high for-sale inventory levels likely to drive home prices down even further in the near and mid term.
Chicago Tribune Real Estate Writer Mary Umberger, in Tribune article from October 7th, interviewed two established real estate practitioners from a large national franchise - one the CEO of this 2,500-office Real Estate Brokerage Franchise, and also the President of a Franchise Brokerage in the Western Suburbs of Chicago.
Both professionals see the Chicago Real Estate Market continuing flat through 2012. The National Association of Realtors predict very low increases in both number of properties sold and average sales price - around 2% - through next year, nationally. Across the U.S., home sales improved during the Second Half, 2011, versus the same period in 2010, but First Half, 2011 prices were weak, resulting in similar, slow growth predicted for the balance of this year.
The Franchise CEO sees increased interest in properties at the very high and very low end of the pricing spectrum, with home sales in the middle tiers being squeezed the most. The interviewed broker, as well as our own Team, sees an uncharacteristically-weak early Fall season.
Indeed, some of our buyer inquiries seem to be just "testing the waters" right now - despite very attractive home and condo prices here in Chicago and the Suburbs, and near-record-low Mortgage Interest Rates, still around 4% for a 30-Year Fixed Rate Loan, with some 15-Year Fixed and Adjustable Rate Loans even more affordable, for those who qualify.
Some we personally speak with indicate concerns over their own job security. Like in 2010, many want to make sure they don't receive a "pink slip" over the holidays and plan to put off their final home buying decision until after the New Year. Others see prices continuing to slide downward next year, and don't want to pay too much, then see their likely purchase price erode over the next few months.
A few have questioned whether the U.S. Mortgage Interest Deduction, and its thousands of dollars in annual tax benefits, will continue as The Fed struggles to cut the national debt. Most agree, however, that a radical change to this cherished deduction seems unlikely - especially before the next Presidential Election.
Others see their next home purchase likely to be a long-term stay. Skeptical buyers, who, in better times, moved up every couple of years as their own financial and family situations improved, are fearful the next home they buy might have to last them and their families quite a bit longer. They hesitate to jump at one of the first places they see.
When will greater stability come? It's difficult to see! Short term, those with cash will buy at low prices, pushing values down even more. Upgrading buyers will have less equity to invest in bigger, more expensive homes, muddying their sales future.
But no one can predict what any unpredicted, positive change to the economy, and jobs outlook, will do to continued-high housing inventory levels, and its impact on consumer confidence to buy.
So, for now, buyer hesitation continues. Unless . . .
Please read our post today via BlogChicagoHomes.com.
DEAN MOSS & DEAN'S TEAM CHICAGO