Sue Fox, @Properties. Direct 773.816.1788

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Chicago sellers adjust to new reality

filed under: Buyers, Chicago home prices, Lincoln Square, Market conditions, Sellers posted on February 27th, 2011

LINCOLN

LINCOLN SQUARE AFFAIR: This 5-bedroom Bowmanville house sold last week for $450,000, considerably less than its original price tag of nearly $570,000 when it hit the market last May. It had a new second floor, a custom kitchen and updated electric, plumbing and zoned HVAC. The seller had purchased the home just two years ago for $550,000.

This spring, it seems that Chicago homeowners have gotten the message that housing prices have dropped considerably — and they’re not coming back anytime soon. As I meet with prospective sellers this month, I’m sensing a sober new attitude towards selling their homes. People are being realistic, thoughtful, even calm as they digest the latest sales figures in their neighborhood and decide on a reasonable price.

It’s a noticeable change from recent years, when sellers were apt to be more skeptical of the comps, and more insistent that their home must be worth more. Chicago home prices have been falling steadily for about five years now, with each year worse than the last, and at this point many of those folks who wanted to sell in 2007 and 2008 but kept waiting until the market recovered have finally concluded that a rebound could be years off. Do they want to keep waiting?

Some of them, the ones who really need to sell, are deciding to bite the bullet. I have four new listings on or about to hit the market, and all of the sellers know that they are not going to make any money on their sale. Three of them are listing their homes for less than what they paid four or five years ago.

While the circumstances vary, it’s not uncommon these days for people selling an ordinary, run-of-the-mill condo to lose $50,000 on their sale, when you factor in the commissions and closing costs. That’s why inventory in Chicago is so low right now — the month’s supply in January was 30% lower than it was a year ago. People who can’t afford to sell simply aren’t selling (or else they are attempting a short sale.) People who can afford to sell are, it seems, finally pricing their homes to actually sell them.

And deals are getting done. I just sold a house in Evanston last week… for about 10% less than the seller paid for it in 2004.

Written by Sue Fox //

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