‘We See Price Reductions Instead Of Bidding Wars’
A pair of reports provide an update on two rarely heard from housing markets. “The Illinois housing market has set records in each of the past three years. With January homes sales down statewide from a year ago, real estate experts are wondering if this will be the year the housing market finally slows down. Inventories are up, but average sales prices are going up and down across the metro-east.”
“So is the hot housing market finally cooling off? ‘It definitely could happen,’ said Belleville real estate broker and Illinois Association of Realtors President Stan Sieron. ‘I think what we’re seeing is that the industry has started to cool off a little bit.’”
“‘We’ve been waiting for this particular time for a number of years,’ said Al Suguitan. ‘And much has been made about a soft landing in an overheated market, and 2006 may be that year.’”
“The results vary from county to county throughout the metro-east in that span. There were 1.9 percent fewer homes sold in St. Clair County last January than in January 2005, but an 8 percent drop was reported in Madison County. A more dramatic shift was reported in Monroe County where 31 percent fewer homes were sold.”
“Realtor Association of Southwestern Illinois President Chad Doyle said the area is reporting 82 percent increase in housing construction. Although inventories also are larger in St. Clair County, Doyle said real estate agents in the county have more homes to show and have been showing more than usual.”
“Suguitan said his association’s biggest concern is sustaining the market. Once investors..notice a cool-down, it could lead to a slowdown in investors buying properties to fix up. After the first two months of the year, he said it is too early to tell. ‘A bubble? No,’ he said. ‘A cool-down? Probably, a little bit.’”
The Delaware News Journal informs home buyers, ‘you’re in charge (again).’ “Sales of new houses fell about 15 percent in January across the Northeast. ‘It has definitely slowed down,’ said Cindy Ramsay, a real estate agent and loan officer in New Castle. ‘We see price reductions instead of bidding wars.’”
“In this housing climate, home buyers will find houses on the market for longer periods of time than in the past. For example, in New Castle County, 2,749 single-family homes were on the market in January, about 35 percent more than there were the same month a year ago.”
“With spring just a couple of weeks away, more houses are expected to enter the market. So if you can afford to wait you and see what’s out there, you should. ‘I am telling people to take their time with properties,’ said Ramsay. ‘Just take your time and see what happens; the price could come down.’”
I don’t know why the press around Chicago cover the housing market so rarely. One blogger reports a dramatic increase in Chicago inventory.
I looked into buying a condo in Chicago a year or two ago. What I found was that the amount I’d be thowing away monthly in association fees, taxes, and misc maintenance was pretty close to what I was already paying to rent a similarly sized place.
This is without even taking into account the cost of paying principal and interest on the thing.
I was back in Chicago visiting recently and saw for sale signs for condos everywhere. This, in the middle of winter.
That’s the way the numbers work out in San Francisco as well. It makes no sense to buy a condo around here.
Actually, the area in the article you linked to is really suburban St. Louis. It is about 250 miles southwest of Chicago. But it’s good to read about that area. My husband is from St. Louis, and it seems like prices have really gone up there without any economic justification.
I think the city will get hit hard due to the sheer number of condo conversions. They are everywhere and are 2-3x the price of renting (minimum).
In my neck of the woods (logan square) its 450-500k to own as much space as I rent for 1300 dollars.
I’ve lived in Rogers Park since 1998. The condo conversions taking place in the past 1 - 2 years are simply shocking. How can something go from $450/mo Section 8 housing to $1800/mo mortgage payment? Lately I’ve noticed several condos priced higher than single families that have been lingering on the market for months.
I don’t think this will end well for anyone.
Phoenix Metro Inventory soaring throught 37200. Just scroll and grin.
7/20/2005 10748
7/21/2005 10968
7/22/2005 11122
7/23/2005 11424
7/24/2005 11338
7/25/2005 11112
7/26/2005 11315
7/27/2005 11353
7/28/2005 11390
7/29/2005 11471
7/30/2005 11656
7/31/2005 11609
8/1/2005 11599
8/2/2005 11590
8/3/2005 11635
8/4/2005 11714
8/5/2005 11710
8/6/2005 12196
8/7/2005 12658
8/8/2005 12919
8/9/2005 13244
8/10/2005 13099
8/11/2005 13245
8/12/2005 13389
8/13/2005 13846
8/14/2005 13801
8/15/2005 13607
8/16/2005 13779
8/17/2005 13992
8/18/2005 14087
8/19/2005 14279
8/20/2005 14321
8/21/2005 14457
8/22/2005 14336
8/23/2005 14391
8/24/2005 14529
8/25/2005 14617
8/26/2005 14792
8/27/2005 15011
8/28/2005 14984
8/29/2005 14803
8/30/2005 15042
8/31/2005 15099
9/1/2005 15063
9/2/2005 15159
9/3/2005 15404
9/4/2005 15699
9/5/2005 15621
9/6/2005 15513
9/7/2005 15913
9/8/2005 16106
9/9/2005 16489
9/10/2005 16716
9/11/2005 16609
9/12/2005 16697
9/13/2005 16538
9/14/2005 16900
9/15/2005 16952
9/16/2005 17419
9/17/2005 17583
9/18/2005 17577
9/19/2005 17636
9/20/2005 17516
9/21/2005 17664
9/22/2005 17883
9/23/2005 18226
9/24/2005 18204
9/25/2005 18196
9/26/2005 18435
9/27/2005 18483
9/28/2005 18605
9/29/2005 18604
9/30/2005 19192
10/1/2005 19333
10/2/2005 19316
10/3/2005 19362
10/4/2005 19463
10/5/2005 19562
10/6/2005 19670
10/7/2005 20052
10/8/2005 20219
10/9/2005 20153
10/10/2005 20324
10/11/2005 20470
10/12/2005 20668
10/13/2005 20850
10/14/2005 21238
10/15/2005 21446
10/16/2005 21463
10/17/2005 21527
10/18/2005 21588
10/19/2005 21795
10/20/2005 21806
10/21/2005 22302
10/22/2005 22719
10/23/2005 22769
10/24/2005 22806
10/25/2005 22976
10/26/2005 23132
10/27/2005 23293
10/28/2005 23681
10/29/2005 23805
10/30/2005 23816
10/31/2005 23790
11/1/2005 23601
11/2/2005 23665
11/3/2005 24193
11/4/2005 24579
11/5/2005 24786
11/6/2005 24717
11/7/2005 24937
11/8/2005 25244
11/9/2005 25333
11/10/2005 25387
11/11/2005 25700
11/12/2005 25685
11/13/2005 25773
11/14/2005 25945
11/15/2005 25913
11/16/2005 25884
11/17/2005 26261
11/18/2005 26098
11/19/2005 26662
11/20/2005 26688
11/21/2005 26684
11/22/2005 26488
11/23/2005 26776
11/24/2005 26819
11/25/2005 26855
11/26/2005 26871
11/27/2005 26890
11/28/2005 26979
11/29/2005 26811
11/30/2005 26797
12/1/2005 26792
12/2/2005 26915
12/3/2005 27238
12/4/2005 27295
12/5/2005 27356
12/6/2005 27387
12/7/2005 27403
12/8/2005 27367
12/9/2005 27649
12/10/2005 27706
12/11/2005 27664
12/12/2005 27512
12/13/2005 27411
12/14/2005 27566
12/15/2005 27517
12/16/2005 27603
12/17/2005 27791
12/18/2005 27776
12/19/2005 27722
12/20/2005 27604
12/21/2005 27554
12/22/2005 27516
12/23/2005 27486
12/24/2005 27311
12/25/2005 27014
12/26/2005 26810
12/27/2005 26822
12/28/2005 26687
12/29/2005 26649
12/30/2005 26547
12/31/2005 26497
1/1/2006 26462
1/2/2006 26401
1/3/2006 26751
1/4/2006 27403
1/5/2006 27564
1/6/2006 28224
1/7/2006 28337
1/8/2006 28542
1/9/2006 28595
1/10/2006 28786
1/11/2006 29222
1/12/2006 29507
1/13/2006 29689
1/14/2006 29899
1/15/2006 30415
1/16/2006 30391
1/17/2006 30707
1/18/2006 30817
1/19/2006 31085
1/20/2006 31457
1/21/2006 31463
1/22/2006 31497
1/23/2006 31607
1/24/2006 31766
1/25/2006 31830
1/26/2006 32142
1/27/2006 32002
1/28/2006 32477
1/29/2006 32458
1/30/2006 32512
1/31/2006 32563
2/1/2006 32684
2/2/2006 33087
2/3/2006 33145
2/4/2006 32953
2/5/2006 33368
2/6/2006 33576
2/7/2006 33550
2/8/2006 33684
2/9/2006 33844
2/10/2006 34234
2/11/2006 34588
2/12/2006 34753
2/13/2006 34815
2/14/2006 34815
2/15/2006 34816
2/16/2006 34816
2/17/2006 35144
2/18/2006 35427
2/19/2006 36260
2/20/2006 35443
2/21/2006 35642
2/22/2006 35503
2/23/2006 35324
2/24/2006 35178
2/25/2006 36388
2/26/2006 36524
2/27/2006 36639
2/28/2006 36174
3/1/2006 36389
3/2/2006 36283
3/3/2006 36811
3/4/2006 36900
3/5/2006 37064
3/6/2006 37217
Wow, that’s a lot of inventory, and Phoenix isn’t even that big of a city!
US Census lists about 575k +/- homes in Phoenix city. At 37217, that’s 6% of inventory - and that’s a huge number.
The 37K is for the metro area of Phx, and it includes vacant land.
Yes taht includes vacant land but don’t include FOSB. Fosb don’t show up on MLS. Add another 6-7k shitboxes.
Phoenix is soooo toast! Their entire economy is based on real estate and call centers. Maybe in a few years the realtors can get jobs working at the call centers as debt collectors??!?!
I was amazed when PHX inventory hit 30,000 but it looks like it’s going for 40,000 and beyond.
My prediction is 50,000 homes this summer.
To Bottomfisherman
How do you sell a house in late June to October if you have another summer of almost a month of 100 degree plus days. Throught the winter should have been their prime selling season. Plus, they are going to have some real water issues going forward.
Looks like you answered your own question.
Spring won’t bail out sellers as last year so inventory will continue upward, reaching the 50K mark in PHX this summer. After that, get ready for panic selling.
as crazy as it sounds, 50k could be in the cards. their historical number (at least according to some reporter from the az herald) is 25k.
Pretty much confirms the turning point began in August 2005.
that’s why phoenix has turned into the housing bubble darling. it’s going exactly according to script.
Just called a pal to have him look at my post… we laughed so hard I choked on my coca cola and he fell to the ground laughing. HAhahahahahahahahahahahhahahahahahaaaa this is hysterical… my cheeks (facial) are starting to hurt from laughing
phuck, where are you getting this inventory data from? I want to do the same for areas of FL.
Thanks!
y’all should sign up for Ziprealty. then you make an Excel spreadsheet to track the data.
Ha ha ha….You said ‘cheeks’…Glad you made it clear, Mr. Brokeback. Just kidding, man.
‘A bubble? No,’ he said. ‘A cool-down? Probably, a little bit.’”
Awww. How cute. The realtors in Illinois are so last year with their comments. Maybe when you’re all growed up like your bubble cousin Florida you can sit at the big table this Thanksgiving.
Hahah. Delaware. I’m intimately familiar with the DEL market as I’m there a couple days a week. Let me tell you this. I’ve NEVER seen tract housing going up at the size and scope that I see here. It is bewildering. And it’s speeding up!!!! My understanding is the overall tax burden is extremely low here, hence the attraction. And this place is literally overrun with soon to be seniors; very similar to Florida. Of course, what Joe $hitForBrains doesn’t understand is that the capital expense of the build out of water, sewer and roads is enormous but that doesn’t hinder him. All he sees is taxes are low NOW. He has no idea he’s gonna get hammered hard.
You’d have to see it to believe it people.
Hell, all the crappy tract house construction in Middletown alone is enough to glut the market in the area.
If sussex co. can’t be described as out of control, nothing does. It is truly astounding.
There are definitely lot of condos/conversions in chicagoland so we definitely have a bubble in condos…I am not sure what the scene is on SFH side.
Do you think the condo bubble fallout would affect SFH market ?
Depends how far it falls…Remember, just a few years ago these werre apartments that were worth 1/3 the value of the same unit now called a “Condo”… But, generaly, not a huge impact because the profile of a buyer for a condo is much different than a house..two different markets…I could see it effecting SFR’s in the micro area’s that revolve around tourists…i.e. Florida…But I would not expect much influence on values of SFR’s lets say in the sub’s of Chicago…
Surely prices of single family will go down along with condos, but I believe that in Chicago it will be referred to as the “Condo Bubble”, which might make people perceive single family as less risky and therefore increase demand. This is what I’m hoping for since I have an 1890 single family that I just can’t wait to unload and move into a condo.
A drop in condo prices will pull SFH prices down too. Don’t underestimate the potential for cheap condos to pull buyers away from expensive SFHs.
TWO different buyers gentelemen…The market s psych will overall effect all housing but the market values of these two different asset classes are not closely linked…
Exactly correct. Different buyers. You can’t have a dog in some condos. HOA rules. With a SFR you can stick your middle finger up at your neighbors. RIGHT TO CARRY helps as well. Cry your eyes out NYC and SF brokebacks.
TWO different buyers gentelemen…The market s psych will overall effect all housing but the market values of these two different asset classes are not closely linked…
yeah, but for chicago there’s the issue of commutes, and some residents chosing to move in to where they work. Can’t recall where but I saw a story highlighting how great these new downtown Chicago condos are, telling the tale of some 28 year old soybean trader who was commuting from Naperville (probably in a SFH he was hoping would appreciate cuz of its appeal to the young family crowd) and was sooo pleased with his 300K condo on S.Michigan converted warehouse. Seems to me that Chicago has been relatively late for a city to start converting everything in sight to condos.
Too bad about Chicago getting bubbly…I’ve always believed that one of the reasons it’s a relatively friendly bigcity is that housing was relatively affordable and that there were so many rentals allowing all sorts of people to live there happily. So, what are those converted Rogers Park apartments going for?! And I wonder what that sort of thing does to all those SFH on tiny lots interspersed.
Where are all the section8 housing people gonna move to?!
This bloody bubble stuff is just soo wrong, I hope it doesn’t wreck the vibe of that town..
I saw an ad in craigslist for a condo in Miami. I wrote to him that I would be interested, but the prices are coming down and I am expecting the prices to be down upto 40% by end of 2007, therefore, hinting that he needs to drop the price by 40%. His response was :
Even if this is true, this decline will not affect TOP NOTCH luxury units, such as the one mentioned, and especially in the type of building such as the Marquis. There is such a high demand to get into that building that they are more than 75% sold out in only 6 months, with prices appreciating 400k. The cheapest units left start at 1,055,000. The same was thought about New York, and its real estate bubble and look what happened there…absolutly nothing, prices are still increasing. The Marquis is the flag building of all Leviev Boymelgreen developments and prices will never decrease in this type of top of the line building. They might stabalize, but never decline. There is still a lot of room for appreciation till the end of 2007.
I guess the morale of the story is for the luxury Miami condos, the prices “might stabalize, but never decline.”
Gotta at least give the responder credit for being polite. They’re all unrealisitic, but fewer and fewer will be polite about it, I think.
When do you guys think the post Super Bowl mainia will kick in?
After the ‘Skins beat the Colts in 2012.
Amen brother, Amen. Skin will beat the Colts with a 3rd string quarterback to win a SuperBowl….again.
when LA gets a team.(grrrrrrrr………)
Still waiting on this.
What? All of the baby boomers are fleeing FL and going to Delaware, and then they will find out it is also too expensive there. I think there will be a tremendous opportunity for cheap trailers to sell to broke FBers out in the middle of the boonies (you name it state - TX, NM, UT, CO, NV, CA, etc). Now I mean the parts where NOBODY lives, so that they can hide from all of the creditors after them. That would be the former realtors working as debt collectors in the Phoenix call centers.
I don’t know, we are thinking of moving back to Chicago and I have been looking at housing prices there. The price disparity between houses and condos is definately a factor in our analysis.
Houses in Wilmette (in Chicago I can actually afford a neighborhood like Wilmette, here in LA it’s unthinkable) start at around $375k, but you can get a 2br/1ba condo for $150k (CA fee is around $200/month).
If we stretch, we can afford the $375k house. It won’t be easy, but we can swing it. If private schools were necessary (like they are in LA) it’d be impossible, but the schools are really good in Wilmette, so the house is doable, if just barely.
I would certainly prefer a SFH. For one thing, we have two kids. For another, we would like to start putting down real roots in a community — the “starter home”/move every 5 years idea just doesn’t appeal to me — and that means a house.
But man, a $150k condo is pretty cheap. The price is so good that it’s hard to pass up. We’d have to strech for the house, and pinch every penny. I’d have to postpone plans starting my own business for several years, the mortgage would enslave me. But the condo, while not particularly nice and fairly cramped, is cheap, cheap, cheap. Same schools, same parks and beaches, half the price.
Right now, if we decide to make the move, we’re leaning toward getting the condo.
I bet you we’re not alone. Would we prefer living in a house? Of course. Is a home generally nicer than a condo? A better place to raise a family? A more “permanent” place to live? Yes, yes, and yes. But for the right price, hey, I can live without these things.
I think you’d be hard pressed to find a house for $375K in Wilmette. Where I live in the west suburbs, $375K gets you a 3b 1 ba ranch, and while my town is nice and has a lot of $1 million tear-downs, it isn’t nearly as nice as the North Shore.
Kathy — “gets?” Or “got?”
Chip -
“Gets.” While the market has slowed down here, prices haven’t dropped much. Still that being said, even if prices plummet, you’ll still get more for your money outside of the North Shore, especially if you want a small house.
Surprisingly, they do exist. I grew up in Arlington Heights when it was still an exurb, in the days before businesses moved out to the suburbs from downtown. One day some friends and I drove over to Wilmette to “see how the other half lives.”
Surprisingy, many of the houses looked just like the ones in Arlington Heights. Tiny ranches with aluminum siding. If you didn’t know any better, you’d think you were in Arlington Heights. The only differnece was that the Wilmette houses all had square hedges; this was before there were those home gardening appliances that replace garden shears and make scuplupting hedges and bushes easy.
Wilmette has some awfully nice houses, obviously, but there are a fair number of affordable ones too. You can get more for your money elsewhere, but if you are willing to put up with a small house then it’s doable.
Personally, I have many misgivings about living there. I am a blue-collar Chicagoan, and while many of the North Shore people are nice, I know that many of the neighbors will treat me like dirt. But the schools are really good, so I’ll put up with it. Besides, those people are going to treat you like dirt anyway, you just ignore it.
Why would you accept being treated like dirt? Granted, the North Shore schools are excellent, but there are many other school districts in the Chicago area that are quite good, where you can live comfortably and your children can get an excellent education.
When we were looking for a house, we thought about the North Shore. We are both professionals with a good income, and yet we didn’t want to raise our children around the excesses that one finds in the very wealthy suburbs.
If you are really serious about buying, why don’t you look in the northwest suburbs where you are originally from? Arlington Heights seems like a nice town. I know the city has put a lot of work into the downtown, and I believe the schools are quite good, too.
Arlington Heights is top notch andd so is Buffalo Grove. I believe Buffalo Grove’s HS is ranked 17th in nation.
Schaumburg, Bloomingdale…there are so many good school districts suburbs but prices have gone up so much in past 5 years.
Arlington Heights wasn’t always top notch. It certainly wasn’t when I was growing up there.
You have to understand that important changes have taken place in the Chicago real estate market. When I was a kid, all of the corporate employers were located in downtown Chicago, and Arlington Heights far away from downtown. Therefore, it was a lower-middle-class suburb, really one of the very first “exurbs.” You could get a nice house there for cheap, but you’d have to endure a long commute.
In the late 80’s, a lot of employers started moving out to the suburbs. For example, Sears moved from the Sears Tower in downtown Chicago to suburban Schamburg. Suddenly, Arlington Heights was only a 20 minute commute from the office. As a result, Arlington Heights became a lot more desirable, and housing prices went up. Moreover, as I’ve said before, the houses in AH aren’t really all that different from those in Wilmette, so now that they were close to work, it made sense for values to rise.
But you have to understand, Arlington Heights really has changed. My dad drove a cab, and the kids I played with were firemen, plumbers, and insurance salesmen. No one in town owned a BMW, there were no high rise luxury condos in the downtown area by the Metra station, etc., etc. These are recent developments that have occurred in the past 15 years or so. It’s a totally different place now.
I understand the Chicago market. I’m a suburban native. I grew up here in the 70s and 80s. But if you’re looking for a place that is friendly to blue collar type people, why would you want to move to Wilmette? Just as everything else has changed, so has the North Shore become more extreme. Wilmette is a different place than it was 15 years ago.
Have you thought about the west suburbs such as Lombard? I grew up there. It has good schools, and while the prices have gone up quite a bit, you can get a reasonably good deal. I know the schools there are not as good as the New Trier district, but I would rather have my children excel at a good school than be in the middle of an excellent school where they would get lost in the shuffle.