How Much Lower Can They Go?
The Chicago Tribune reports from Illinois. “Home buyers and sellers in the Chicago area just can’t agree on the price of a house. Sales of existing homes continue to be down, Chicago-area home prices are flat, and real estate agents who want to close deals are pleading with players on both sides to be realistic. ‘You’ve got sellers in denial,’ said Ken Reeder, a broker associate at Baird & Warner. ‘They’re reducing, but they’re being slow.’”
“Denise Dominici put her Romeoville tri-level house on the market in April 2007 for $275,000. It hasn’t sold and reducing the price has been painful for her, even though she’s moved into a new $425,000 custom-built Shorewood ranch in September. She’s turned down offers from renters, reduced the price to $235,900 and offered to throw in the furnishings. To her, the house at its current price is a steal, not a reflection of a bad market.”
“‘I don’t know what these people want,’ she said. ‘To me, I feel like I’m handing them everything.’”
“Meanwhile, Liz Meyer and her boyfriend, Will Aquino, find themselves stymied in their quest to become first-time homeowners.”
“In the past eight months, the couple has looked at 25 condominiums. They’d like to make an offer for their favorite, a two-bedroom unit in Humboldt Park, but they think it’s worth $30,000 less than it’s listed. And their real estate agent heard that higher offers have been rejected and the sellers may pull it from the market.”
“‘We’re seeing a lot of people that bought within the last two years when money was cheap. So to break even, they’re maintaining a high listing [price]. It’s only worth what I’m going to pay for it,’ Meyer said.”
“Sales of existing single-family homes and condos in the nine-county metropolitan Chicago area dropped 25.2 percent in July from a year earlier, the Illinois Association of Realtors said Monday.”
“Sitting at an open house Sunday for an Elmhurst home first listed in February for $857,000 and now priced at $759,000, real estate agent Sheila Barbre saw six groups of people, including two who stumbled upon the house after seeing a sign Barbre had posted nearby at the Illinois Prairie Path. ”
“‘Everybody had the same comment,’ she said. ‘They wanted to stay away from the market because of the way this year is. They are looking into next spring to do something.’”
The Pioneer Local from Illinois. “Martin Paulson, Lake County chief assessment officer, said despite the slowdown in the housing market, most taxpayers will see an increase in their assessments. That’s because assessments in Illinois townships are based on sales transactions that occurred during the three previous years — 2005, 2006 and 2007 — when the housing market was stronger.”
“‘Many people do expect their assessments are going to go down,’ said Paulson. ‘The reality is that isn’t going to happen this year.’”
“Antioch Township Assessor Heather Kulfalk-Marotta said her office has received a number of calls from residents wondering why their assessments are going up when the housing market is in a slump. She has to explain to them that assessments are based on an average of the three previous years, not on current year’s sales activity.”
“‘A lot of people say ‘I can’t even sell my home for what I paid for it,’ she said.”
The Indianapolis Business Journal. “The squishy Indianapolis-area residential real estate market has come to this: Sluggish though it is, the region hasn’t been hit as hard as the nation as a whole. Sellers have the greatest advantage if their house is priced below $75,000 or if the house is in Hendricks County. Buyers have the most leverage if the house is priced over $1 million or if the house is in Morgan County.”
“Metropolitan Indianapolis Board of Realtors President David Bickell said markets are digesting excesses from the housing bust. ‘That excess supply is being worked through very nicely,’ said Bickell. ‘We’re pretty near the bottom.’”
“July sales plunged 21 percent, to 9,502 units, from July 2007, MIBOR reported. The median sale price fell 3 percent, to $124,500.”
“People wanting to unload a house at $1 million or more are likely to wait a long time. The category has a 47-month supply, much more than the recent second-quarter low of 32 months, in 2006.”
“Broker Jeff Kucic said there isn’t enough information yet to declare that the downturn is over. ‘We’re in the mucky bottom,’ Kucic said. ‘We’re up one day and down the next.’”
The Quad City Times from Iowa. “A little more than a year ago, three major projects - upscale condominiums at Oneida Landing, rehabilitation of the vacant One River Place building into a mixed use commercial and residential building and a new office and apartment complex headed up by the McNamara Development Group - were contemplated.”
“Now, construction has begun on the McNamara building, but Pat and JJ Condon’s Oneida Landing condo tower is shelved and their plans to work with the owner of One River Place on a rehab project has stalled due to disagreement on the value of the property.”
“The property the Condons were going to build on is owned by area businessman Jim Sweet. He said he was forced to terminate the Condons’ option on the property because of the slow pace of pre-sales.”
“The project was very ambitious by Quad-City development standards. It was billed as an $18 million, eight-story luxury condominium highrise, with prices ranging from $214,000 on the second floor to $750,000 on the top floor.”
“‘I held the property for two years at no cost to them, and I felt they either needed to buy the property or pay a monthly stipend to keep it off the market,’ he said. ‘The problem is the economy. It’s tough to stick your neck out in this economy.’”
“Levee Improvement Commission member Lucky Lang said it’s unfortunate the projects are on hold, but he remains optimistic about the long-term prospects for that section of riverfront.”
“‘Davenport may not have been quite ready for what Pat and JJ proposed,’ he said. ‘The concept is awesome. It’s what a lot of riverfront communities do. It may have been a little too contemporary, a little too advanced for this moment.’”
The Bay City Times from Michigan. “Bay City developers Paul and Peggy Rowley have laid out plans for an $8 million project on the downtown Bay City site of the former Mill End building. In all, there would be five retail stores, one or two restaurants, and 20 to 30 condo units, according to the plans.”
“Rowley has said he will not move quickly on the project until he experiences more sales at the Boathouse Condominiums, an upscale condo development on Water Street. He described the proposed housing units at Mill End location as ‘much lower price than the Boathouse.’”
“Rowley, in the past, has said Boathouse condo prices ranged from $384,000 to $727,000. ‘They’ll be smaller units, something like 800 to 1,100 square feet,’ he said.”
“State Rep. Jeff Mayes, Bay City, authored legislation this year to expand the state’s Commercial Rehabilitation Act to accommodate the Mill End project. ‘That area of the city is the last real piece to be developed, and then we can set our sights on Uptown at RiversEdge,’ he said. ‘Of course, there’s a process that has to be followed and I suspect there will be questions.’”
The Ann Arbor News from Michigan. “Washtenaw County home and condo sales were steady in July compared to the same month last year, although the average sale price of a house plummeted nearly $28,200 - a 10.6 percent drop - to $236,209, the Ann Arbor Area Board of Realtors reported this month.”
“John Cimaglia, (a) Corvette owner, is hoping to get $780,000 for his 3,000-square-foot custom-built home on 27 acres in Augusta Township. He and his wife are hoping to downsize, and may not have room for their hunter green, mint-condition Stingray. With the market as tough as it is, he thought the car might at least attract attention.”
“Mary Hettinger, of Keller Williams, said she had seen a house for sale in Northville with a classic car thrown into the deal. But, she said, it’s not likely such gimmicks would have a big impact locally.”
“‘The bottom line is, it’s about the price,’ said Laura Dykstra, sales manager for the Edward Surovell Realtors.”
“Buyers rarely select a home based on extras thrown into the deal, she said, ‘But hey, in this market, people are willing to try just about anything.’”
The Daily Press & Argus from Michigan. “The numbers tell the story about new home construction in Livingston County, albeit a depressing one. It should come as no surprise that new homes are trickling into a county that was once booming with new home construction. Several years ago, subdivisions appeared to pop up almost overnight as rising home values and easy financing allowed people to move into a highly desirable community.”
“Home values are now falling, banks aren’t lending so quickly and there’s plenty of homes available with the increase in foreclosures.”
“Bill Rogers, who runs a family-owned modular home business, said he was the No. 1 builder last year for one of the biggest companies in the business, All American Homes. Rogers said the slowdown really started not long after Sept. 11, 2001, and it hit quickly.”
“‘It fell off a cliff,’ Rogers said. ‘It wasn’t a bungee jump. It was jumping off a cliff with no bungee cord. It’s essentially dead.’”
“When he receives a call from someone asking whether to build, Rogers said he’s faced with telling them a painful truth.”
“‘If I can lie, you want to build,’ he usually begins telling them. He then tells them the truth, which is there are some great deals out there on foreclosures and other homes. All it takes is some legwork on the part of the buyer.”
From TH Online. “In all 12 Midwestern cities tracked in The Associated Press-Re/Max Monthly Housing Report, sales fell by at least 10 percent from July last year. The report analyzed home sales recorded by all real estate agents in those cities, regardless of company affiliation.”
“The median price fell in every city in the AP-Re/Max report, except Rapid City, S.D., where it rose by 4.8 percent from a year ago to $179,000.”
“The largest price drop, by contrast, was in Detroit, where the sinking economy and skyrocketing foreclosures helped push the median price down 36 percent to $81,000.”
“Bob Mitchell, an agent who works in Detroit and its suburbs, is currently listing a 6,100-square foot brick Queen Anne-style home, which needs major repairs, for a mere $80,000. ‘It’s just amazing,’ he said. ‘How much lower can they go?’”
“In Minneapolis, prices were down 12.5 percent — the second-largest drop after Detroit — to a median of nearly $192,000 in July. Sales were down more than 19 percent.”
“‘I really don’t see (a recovery) happening any time in the near future,’ said Susan Hofflander, an agent in Minneapolis who only represents buyers.”
The Jackson County Chronicle from Wisconsin. “Existing home sales in Wisconsin fell 22.2 percent during the second quarter from a year ago, a steeper decline than the Midwest region and the nation, according to a report issued Thursday by the Wisconsin Association of Realtors. Median sale prices were down 3 percent to $162,200 from last year.”
“‘It’s a mirror image of what happened in the first quarter,’ said David Clark, an economist (in) of Milwaukee. ‘It looks like buyers are still reluctant to dive into this market.’”
“Many Wisconsin real estate agents don’t expect much market improvement before 2009. In an online survey conducted last week for the association, 84.4 percent said they expect fourth-quarter sales to be the same or worse than the same period in 2007.”
The seasonally adjusted pace of sales in south-central Wisconsin has been stable for a year, according to Dave Stark of Stark Company Realtors.
“‘If you’ve been waiting or hoping for things to get better, stop,’ he wrote.”
From KAAL TV in Minnesota. “Rochester Realtor Robin Gwaltney agrees that prices are lower today than they were five years ago. She says it’s because sellers are asking for closer to the actual value of their home.”
“5 years ago sellers would ask for 10 to 20 percent more than what the home was worth.”
From KIMT News 3 in Minnesota. “A foreclosed housing development will be going to the highest bidder. The city of Albert Lea says the Eagle’s Rest development will be on the auction block in September. Larry Thorstad has lived near the Eagle’s Rest golf course area in Albert Lea for 15 years.”
“‘Well, with the golf course the way it was it was a beautiful area. Well used. You know…with the lake there and everything. Right now, we’re kind of blocked from all of the eye sore that we see,’ Thorstad said.”
“Behind Thorstad’s house sits the torn up development. ‘It’s very discouraging that it’s just sitting there all tore up and nothing is being done that we can see or hear.’”
“Last December, American Bank bought back the property that was going to be turned into a housing development called Eagle’s Rest. Construction crews came in and started working on the project last year, but neighbors say within a couple months all that work just came to a halt.”
“Even though it’s months past the foreclosure, the developer has one year, or until the end of this December to pay the mortgage off under his right of redemption. Albert Lea’s City Manager says the developer plans to do that during an auction in about three weeks. And the developer is also offering to sell the city some acres. Right now, the city is saying ‘no deal.’”
“‘This is kind of a bad thing. A lot of people are very disappointed with the way this was handled. They’re very disappointed that now it just sits there and now it’s a big eyesore for the whole city,’ Thorstad said.”
While there are inklings of a recovery elsewhere in the country because prices have dropped dramatically, the local market so far appears to be missing out.
Lots of local sellers are trying to stand firm, but Labor Day’s almost here. The selling season is almost over. The cranes are still creating more inventory all over town.
It’s gonna be a long winter in Chicago for many homedebtors.
At first, I thought that the crane-birds were laying inventory eggs. Then I re-read the sentence…
Big, unsalable inventory eggs (with granite countertops) …
Granite countertops will forever be associated with this bubble.
Don’t forget stainless steel appliances.
And crown mouldings and plantation shutters…
And wood floors, open rooms…
In my experience, what is found under the back side of a bird is rarely an egg.
Good one!
“‘We’re seeing a lot of people that bought within the last two years when money was cheap. So to break even, they’re maintaining a high listing [price]. It’s only worth what I’m going to pay for it,’ Meyer said.”
A lot of sellers are going to figure this out in the next few years. I live in Marin in California. For almost everything on the market here below $1 million, one could rent equivalent housing for 40% to 70% of the cost of owning. The prices are a complete joke even though they are well off the peaks.
What is also happening is that a huge shadow rental market is building because many sellers think they will get more for their house in two or three years than they can get now. Rents are already flat to lower here, and rents will be dropping as sellers who refuse to face reality flood the market with rental housing.
Here is just one example: “Owner will lease in Sept. if not sold. BRING OFFERS! FANTASTIC VALUE!”
http://www.redfin.com/CA/San-Rafael/115-Arlene-Ter-94903/home/700197
At its current asking price of $599,000, this condo could be rented for no more than 65% of the monthly cost of owning it. How many people have $120,000 in cold cash to put down for this “FANTASTIC VALUE?”
Keep the popcorn popping,
Red Baron
“Owner will lease in Sept. if not sold.”
Oh, I’m SO scared!
I’ve been following a house since February (new construction). In late June the MLS listing had a new note that the price would increase $8k if not closed by August 1st.
It’s been painful, but I’ve successfully not purchased the home for $8k more than the price at which I originally didn’t purchase it.
Beware of Dog with Different Fleas!
Me again.
You’re on to something when you talk about the market being flooded with rental housing. Already happening here in Tucson.
I live two miles away from the University of Arizona, which started its fall semester on Monday. I’m amazed at the amount of rental housing that’s still available.
A lot of it appears to fall into the “we’ll just rent it (until the market improves) category.
Hey Slim, what do you think would happen if banks went into the rental business instead of dumping their foreclosures on the market? Could happen and it’s a scary thought.
Bad Andy,
… it might actually make sense. Especially if the bank is under FDIC scrutiny. At this point anything they can do to stall more inventory from gushing on to the market would ‘help’ ( from their perspective )
Of course at some point a For Rent sign in front doesn’t change the fact that it’s empty so we may even see lenders setting up “Investor Packages” that allow for cash flow w/ built in balloon payments or something. It’s really only limited to their imagination.
I’ve heard some rumblings from my friends on that side of the table. There’s talk about property management firms being created and the likes…I don’t know where we’re headed, but I don’t think we’ve ever been there before.
Right, to the degree we’ve had Rich ( here ) touting that Hedge Funds will be “snapping up” every vacant home in the Bear Flag Republic!
I think part of the reason the banks have been so slow to respond to short sales etc. has been of course that they’re just slammed, but also b/c they’re cautious. They’ve been burned on the upside and they don’t need unregulated realtors “gettin’ back in the game” by setting up straw buyers and the like to profit further at their expense on the downside!
At least setting up mgmt. companies gives them a much needed breather.
Ahh but no silver lining the banks if they decide to go the rental route will drop rents until the place is rented. This drops overall rental rates and lowers the price point at which housing will cash flow lowering the purchase price that real real estate investors will invest at. Also it cripples the banks balance sheet for years making them have to tighten up on down payments to the same investors.
You have to let the price of housing drop till it cash flows as rental and is line with the median income playing games flooding the market with cheap bank owned rental in my opinion makes the problem a lot worse. Better to get the real investors to put 30% down early in the game and take the losses as the market continues down.
Hey, Bad Andy, I think that very thing is happening right here in Tucson.
Case in point: There’s a foreclosed house within walking distance of the Arizona Slim Ranch. Has a local real estate agency’s “for sale” sign with a “foreclosure” rider on it. Right next to the “for sale” sign is another one that says “for rent.”
Unlike the agency sign, the “for rent” sign is one of those red and white jobbies that you can pick up at the grocery store. It has a cell phone number on it, which tells me that it’s being handled by one of those oh-so-important, always on the go types.
A bit of history on this house: It’s been on the market since last year. The first agent even tried an auction, but that didn’t work. So, down came that agent’s sign and up went the one I mentioned above.
Back in May, I noticed that the agency sign disappeared, and there was an oh-so-fetching NOTS on the front door. The NOTS showed that the foreclosed-upon purchaser was a private individual with a California address. An specuvestor, I think.
I don’t know if the auction was successful. I doubt it. Shortly after the auction date, the “for sale/foreclosure” sign popped back up.
And did I mention that up until recently, this house had not one, but two, boarded up windows? And that it’s right next to one of the busiest streets in central Tucson, one that has a major bus line that runs well into the night?
RE: I’m amazed at the amount of rental housing that’s still available.
The reported trend around BeantownLand is that students are ditchin’ off-campus housing and retreating to dormitories because of the costs of commuting and heating some slumlord’s tri-decker energy pig. However, campuses have been caught short, and student’s must now deal with tripling up-the horror!
the horror!
But they’ll have to buy h-o-o-o-mes (our h-o-o-o-mes), won’t they, whether they like it or not? They’ll have to live somewhere!
It’s only worth what I’m going to pay for it,’ Meyer said.”
*Someone’s* been reading this blog!
Oh how I would love to see whoza lurkin
Yeah, I know there would be no sewage, running water, or heat, but, I think you could by a small bit of land in Marin for half that price, and throw up a tent, and get a much better deal than some dinky crapola condo there for 600 grand.
Or, on a more serious note, I like the trend toward smaller homes, you could buy the land, put up a 600-1000 sq place, and be all set(unless you have a big family).
throw in rich Corinthian Leather and you’re home.
Liz, you’ve got it right. It’s only worth what you are willing to pay for it!
foreclosures moving here in 22151
So taxme, are you going to hook me up with what it is you’re on if I come to visit Springfield?
just sayin the foreclosures in my hood are selling fast
- in the depression fed gov workers grew strong
22151 is 90% funded by you and me
One full third of federal workforce hits retirement over the next several years. Think For Sale inventory might creep up, just a bit?
BWAHAHAHAHA
There’s too many foreclosures here for anything to be considered moving fast. Prices haven’t dropped enough yet either.
To her, the house at its current price is a steal, not a reflection of a bad market.
“‘I don’t know what these people want,’ she said. ‘To me, I feel like I’m handing them everything.’”
Don’t sell the house!
There are a lot of sellers who lament back to the bubble days and are unable to make concessions to the current reality.
Why are people STILL buying another house before selling the old one?
What’s better than buying new at bottom and selling at old bottom…?
Buying new at bottom and selling old on the way up. Everyone knows you feel better when you sell on they way up from bottom as compared to on the way down from top.
This is how rehabs do it.
What makes you think we’ve reached the bottom? My Option-ARM reset, Shiller-Case and building inventory charts indicate otherwise.
“There are a lot of sellers who lament back to the bubble days and are unable to make concessions to the current reality.”
The sellers need the reality slap. That’s why I would like to see more articles like this in the Tribune. Except I wish they’d leave out the false drivel such as: “Prices here never skyrocketed the way they did in other parts of the country, so they didn’t crash after the credit crunch hit and the economy turned sour.”
The tug of war between buyers and sellers is a reflection of Chicago having avoided the excesses of the housing boom. Prices here never skyrocketed the way they did in other parts of the country, so they didn’t crash after the credit crunch hit and the economy turned sour.
We avoided the excesses? Really? How long have you lived in Chicago, Ms. Podmolik? (I have to admit, that i>sounds like a Chicago name.) I can point to price increases over 100% in every neighborhood I’m familiar with.
As Edgewaterjohn and I mentioned this weekend, there are more than 9,000 units scheduled to come online in the next year just in the downtown area. What could’ve caused such exuberance among developers?
Right, and 857K for a home in Elmhurst ( right off the incredibly ’scenic’ Prairie Path ) is perfectly reasonable?
When I was a kid we used to drink our dad’s warm Falstaff there and look for ‘nudie’ magazines in the abundant shrubs and weeds. I’m sure it’s much nicer now though..?
Elmhurst ain’t bad, and there are *some* reasonably priced houses in that area. But $500k to $1m for a home in your old stomping grounds is still way out-of-kilter.
(Ahhh … Falstaff.)
All of the Western Suburbs are nice from Rt. 83 all the way west to Glen Ellen ( excluding Wheaton, IL ) then resuming with Winfield.
As I recall though the PP was just the old CNW tracks ( that’s why it’s elevated ) and then they salvaged the RR ties and iron and called it a “nature walk”. Perhaps b/c it was so new at the time there wasn’t a whole lot of ‘nature’ goin’ on there? Things start to get a little weird when you go past Scripture Press and then you were… in a different world?
The path definitely gets nicer once you get past wheaton. Forest preserves and prairie and all that, especially the elgin branch. The mainline route from maywood to wheaton, ehh, not really anything much to speak of.
And it’s actually built on top of the old Chicago, Aurora and Elgin Electric Railroad line.
And if you’re going to do the ride from Maywood to Elmhurst, well, bring your flak jacket and a few 40 ouncers of malt liquor to bribe people not to rob or kill you. Or ride fast. Real fast
Steve W,
Oh I think ‘everything’ gets nicer once you’re west of Wheaton! ( In case any of you are wondering “why the venom?” ) it’s always been the hypocrisy there. I remember as a kid pumping gas at Main & Geneva churchy-types would have bibles on the front seat and when they’d ask you to check the air in the spare tire, there’d be Penthouses’ and Jim Beam in the trunk!
I stand corrected then. The Chicago Northwestern Commuter line seems to run directly parallel to it for long stretches? Even when we were kids it was kind of conduit of juvenile crime. “If only we can make it back to “da’ pat”. LOL!
Yes, it’s pretty much parallel to the CNW tracks during the lovely ride to wheaton.
You’re shocked at 875K off of the prairie path? Try $1.5mm:
http://tinyurl.com/5bnjjy
Elmhurst sellers are delusional. In the past week 50 properties were pulled off of the market. I think next spring will be a bloodbath.
Kathy,
Frankly I’m shocked by the fact that something as trivial as a “path” can be considered a “selling point” at all but..?
I always felt what gave the WB’s their “appeal” was their… modesty? Nice homes? Sure, but opulent? C’mon!
The homes around Lake Ellen were a bit over the top by 70’s standards but that was actual stonework IIRC? Not your ‘bought at Lowe’s looks like stone’ stuff. Maybe things have changed but I seem to remember everyone from the WB’s was always so stuck up?
Actually, I enjoy the Prairie Path and would prefer to live close to it. I am a runner, and it is a great place to run.
I grew up in the western ‘burbs, but in one of the not so snooty ones. Elmhurst was never one of the really snobby ones, but it has changed a lot in the last 10 years or so. Glen Ellyn is one of my favorite Chicago suburbs, but it is a little far from the city for our needs.
what is going to happen to the square miles of exurban mcmansions built for an era of cheap gas that will never return?
they rot and become safety nuisances costing towns money to police, even as the tax base dwindles.
are we going to see a glorious Day of the Bulldozers, as one strapped town after another decides the cheapest thing to do is to plow those misbegotten buildings under forever, thus reliving the sacking of Carthage?!
There’s no D-9′ing that the dozers will have their day…
Just look at the City of Detroit to see what the remnants of a housing bubble look like (one that popped 80 years ago, but a bubble nonetheless). Mile after mile of “big foot” brick McMansions (we were setting the trend in the 1920’s!) that no one wants to live in because they are falling apart and too expensive to maintain, and that people only live in because they can’t afford anything else.
Try to picture what all these new McCrap shacks will look like in 80 years;
Despair all ye who enter here!
Try to picture what all these new McCrap shacks will look like in 80 years;
A few bricks, a pile of moldy compost, and some rectangular slabs of granite, all covered with dust?
Invest in Catapillar and John Deere
Buy Caterpillar stock now?
I certainly hope not; that would imply that the towns purchased the properties, which I assume they would do with my money (directly or indirectly). I don’t want my money purchasing properties to bulldoze any more than I want to give my money to the speculators and lenders like the government is currently doing.
A much better approach would be to just be vigilant in enforcing city ordinances, fining owners not in compliance with escalating amounts, and making sure all properties are inspected and up-to-code before they are sold. Make the people who buy/hold/sell the properties responsible for their upkeep. It’s called appropriate allocation of costs and pricing of risk (instead of socializing losses), and it’s the way America is supposed to work, all the socialist programs notwithstanding.
No Nick, the towns don’t “purchase” the properties. They take them over for the back taxes (and any fees) owed and then have to either plow them under or let them rot. This is what has happened to most inner cities. Slumloards may take some over for $1 each, but then can’t earn enough renting to maintain them and the process repeats. Most people just don’t want to live there, although some may have to. Many of the speculative developments in FL, NV, and the CA inland empire are clearly in this poistion and it sounds like parts of ‘far-Chicago’ as well.
Then the commuters just switch to plug in electric cars, which can do 40 miles round trip a day. You can already buy conversion kits for old Porsches and what not.
This is not going to be a fast switch. Plus the price tag is not for everyone. At least 5 more years until 10% reach on those plug-in electric cars. China and India are adding more cars than that per year.
I think in 10 years there are chickens picking at seed in the sun on the front lawns of portions of the more outlying suburbs, and there is straw and mud spread through what used to be great rooms, great places to put large animals up for the night. The streets are pocked with holes. Many of these places have plywood in the windows to keep squatters and thieves out. Neighbors haven’t organized armed patrols because the luckier ones are glued to televisions, exhausted after a day of scratching out a living selling imported clothing to each other.
“Rowley said he will not move quickly on the project until..?”
Hell freezes over? Dude, scrap it. Scrap it now! One more “multi-use” freaking retail ’shoppe’/rest./condo “project” and the whole country will slide irreversibly into oblivion! Yes, even in Bay City or wherever the hell it is you are hatching your little OPM scam.
“‘Davenport may not have been quite ready for what Pat and JJ proposed,’ he said. ‘The concept is awesome. It’s what a lot of riverfront communities do. It may have been a little too contemporary, a little too advanced for this moment.’”
I’m sorry, but let me remind you that originally condos were built for those ‘priced out’ of the market. They were never intended to be luxury residences.
And the stupid logic goes like this:
‘Now you don’t have to worry about taking care of ____ with a condo’
Of course, I rather pay someone to do the work that a hefty HOA…
How the condos look like is not the problem. The fact that most people don’t want to live in one is.
In one fell swoop of a final sentence, SMF tells the truth about the demand for condos.
*wwahhh* I been dissin’ condos for years.
Condos are only good for two things: bubble appreciation, and building equity in an area where you can’t go directly from an apartment to a house. We won’t have condo appreciation for 25 years at least, and condos as that extra equity stepping stone is valid in maybe 10 cities in the whole USA.
For example, there is NO reason for any condo anywhere within the state of Iowa.
Condos are the worst of both worlds. They combine the disadvantages of apartments (shared walls, noise, no yard, etc.) with the disadvantages of home ownership (lack of mobility, increasing fees, etc.) Yet people keep buying them, expecting them to appreciate.
“…the mucky bottom…”
Watch out for quick sand! Unless you’re talking about a baby’s diaper.
This is Real Estate Country…Abandon Hope all ye that who ENTER here
“Many Wisconsin real estate agents don’t expect much market improvement before 2009. In an online survey conducted last week for the association, 84.4 percent said they expect fourth-quarter sales to be the same or worse than the same period in 2007.”
The seasonally adjusted pace of sales in south-central Wisconsin has been stable for a year, according to Dave Stark of Stark Company Realtors.
“‘If you’ve been waiting or hoping for things to get better, stop,’ he wrote.”
“‘If you’ve been waiting or hoping for things to get better, stop,’ he wrote.”
HUH? Stop what? Waiting for things to get better?
Is this a buy now or lower your price statement?
OK. Things are stable (RE) so stop waiting for them to improve? Alrighty then Mr. Stark, boy genius.
Oy Vey.
Leigh
Actually, for David K., this is as close to t “real estate is awful” remark he can make.
All in all much better than the recent adds touting the home buyers “tax credit.”
“Denise Dominici put her Romeoville tri-level house on the market in April 2007 for $275,000. It hasn’t sold and reducing the price has been painful for her, even though she’s moved into a new $425,000 custom-built Shorewood ranch in September. She’s turned down offers from renters, reduced the price to $235,900 and offered to throw in the furnishings. To her, the house at its current price is a steal, not a reflection of a bad market.”
“…and offered to throw in the furnishings.”
Translation: It would cost more to move her old Ikea and Wal*Mart crap than it’s worth! Nobody wants your furniture when they buy a house.
“Nobody wants your furniture when they buy a house.”
Hee!! When we bought this house, I insisted on a clause in the contract that said “Seller MUST have ALL personal belongings removed from property by close of escrow”.
I have enough of my own stuff, TYVM.
Yup.
Its only worth what people are willing to pay for it.
And not a penny more.
I learned this lesson long, long ago; when I was a kid. I used to trade sportscards. In fact, I still do.
But no matter what the Beckett Guide says, no matter what your buddy says, and no matter what you think…..ITS ONLY WORTH WHAT YOU CAN SELL IT FOR.
I learned this lesson once again later in life, in the stock markets. It might be worth $25.00 / share at todays close….but that doesn’t mean you will get $25.00/ share if you try to sell it next week.
“You bets your money and you takes your chances”
Some people are gonna learn a very hard lesson over the next few months. I’ll bet that probably a good 60% of these house flippers have never collected sports cards or bought stocks…..because you have to have your own skin in the game….100% cash….to do these types of “investments”.
..
It’s also worth what banks are willing to loan for it
Ah, I see I’m not the only one who learned my lesson about book price (a model) vs. market price during the baseball-card boom.
It’s amazing to read your comment Les, I’ve said the exact same thing to myself in recent years. And joked about it with friends who collected cards alongside of me then and have now observed the recent craziness of the Alt-A/subprime/no-doc/granite countertop/condos in Iowa real estate boom and its ensuing collapse.
As the man said, “It’s only worth what you can sell it for”.
I spoke with my ex landlord today
He has all his $$ in two properties
One in Hawaii
One here
He can’t seem to sell them
The Duplex he purchased here in 2006 for over 750k. He now has it for sale at 1 mil. He put 60-80k into it. It rents for 3200, one of the two units hasn’t had a renter in it for a year now.
I’m guessing he has the same fantasy price for the Hawaii property which has been on the market for 2-3 years at least.
He says BK is 1-2 years out.
Anyone interested in a property that can be rented out for a loss of over 2000 a month when it’s fully rented should call?
Nice guy, but this is a story that is not going to end well.
I have been watching the market in Chicago Lincoln Park - I see that transactions on condos appear to take place at 2003 prices, or at most 2003 prices plus realtor fee. This is good news, assuming 2003 was the end of a normal progression and things got out of hand from there. I see serious price reductions (latest being 25k off a 612k new construction condo that must have been priced in the 649,999 and 99cts before (knowing the creativity of developers). I would like to ask the commenters if they have any opinion about where LP will go from there. Thank you
Lincoln Park will go down, down, down.
2003 nominal prices are the tip of the iceberg. $600k condos are not supportable, even in Lincoln Park.
The condo situation here is highly volatile, there’s just too much new inventory and two/three decades of gentrification have opened up new “frontiers” and led to still more inventory. For example, all the new inventory around The Loop/Near North, West Side, South Loop is a wildcard that wasn’t there before.
LP still beats the pack with location and services, but this bust may reshuffle the neighborhood pecking order - or not. Regardless, condos here will overshoot on the price decline. Having bought in 2003, albeit much further north, only 1998 prices would get me to move on a condo anywhere - single family detached is another matter.
…but they think it’s worth $30,000 less than it’s listed. And their real estate agent heard that higher offers have been rejected and the sellers may pull it from the market.”
Oh no don’t do that. It’s not like there are tons and tons of other houses for sale.
How come I always have a tough day in the cage (work) when there’s a Chicago/Midwest thread? If I could sing and dance, I wouldn’t have to do this sh*t!
Anywho, as ET points out - Chicago condoze are in big trouble. I still think we’re at about the same point as the PNW. Prices are sticky - but look at the growing inventory!
Sorry, but I’ll go to grave believing that people really don’t want to spend $250k-$500k (or more) to live in an apartment. Condoze are a niche product and should have stayed that way - especially here.
Hope you make it outta the cage a little more this afternoon.
(But singin’ and dancin’ ain’t all it’s cracked up to be.)
I agree, prices have maybe come down 10-15% in general in Chicago metro, but easily should be down 20% more to even start to come close to 3X income. The typical 500K to 600K wishing price circa 2006 will one day be back down to 350K. What I find amazing is some subdivisions where they basically have your 70’s split level on a city lot wanting 500-600K. Under what illusion would a family making
$180K a year want to buy what is generally considered a lower middle income home?
BBC has a good read on it’s news website. http://news.bbc.co.uk/2/hi/business/7584097.stm
———–
David Busby, from Lancashire, bought a property on the outskirts of Marbella six years ago. Bought off the plans it took more than four years to complete and now he is struggling to find a tenant.
What was once his dream retirement home is now his Spanish nightmare.
“We were looking for an investment for our retirement, but so far we’ve lost £90,000,” says Mr Busby.
——————-
We’ll you found your investment alright. Didn’t you know investments can go down as well as up.
This weeks fun….
I’m trolling Trulia and see a person in the neighborhood mention their “oh so nice house” that is “reasonably priced” and has “only” been on the market three months and they can’t understand why it hasn’t sold.
They ask if they should take their agents advice or keep it at its current price a while longer. All the agents say “yes, drop the price” to which the person always replies “but my house is special…..”
The person saw one of my threads and immediately posts a reply as to why their house would be perfect for me….” I mentioned the things about their house I didn’t like, to which they said “oh, you never hear the traffic.”
I just dont’ have the heart to say, 1) your house is overpriced 2) you’re not going to get what you paid for it two years ago and 3) you’ve missed the selling season, drop the price now.
Actually I really like the house, but it’s overpriced by at least 30K and they can’t afford to sell it to me at my price, as they would be losing about 48K.
Oh similar new construction is priced at 40K below them.
Sorry, I was actually siding with the agents.
I feel unclean.