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Karen Breen Elia's Blog

By Karen Breen Elia, ABR, CRS | Broker in Chicago, IL

Spring is sprung, the grass is ris. I wonders where the buyers is.

Although not quite the version of this poem must of us know, Realtors and sellers will be chanting this version this spring.  Most pundits will agree that it is a great time to purchase real estate, but buyers seem not to be in agreement.  The March Credit Suisse Survey Results below endorse our feelings about the spring market, that buyers are unwilling or unable to commit to real estate purchases.  Tightening lending criteria and a weak job market continues to put downward pressure on real estate sales both in number of transactions and price points.  My advice to any seller is if you are lucky enough to get an offer, you probably should take it! 
 
I had one past client ask if Lakeview was exempt from the bubble.  According to MRED (MLS) statistics, there has been about an 8% decrease in value from 2007 to 2010 average sale price of Lakeview condos, but a 49% decrease in the number of transactions.  I think that is the most telling figure.  What is selling, is the cream of the crop, and was at a much higher price point three years ago then the exact same unit is now.  So although the figures don’t look too much different (average sale price 2007 was $364,860 vs. average sale price 2010 was $340,048) if you look at what is selling at the average price now compared to what was selling at the average price then, the difference is substantial.  Cases in point:
 
2712 Lehman Court – built 2007
#3N sold for $545,000 on 9/10/2007 delivered as new construction
#3N resold for $460,000 on 11/10/2010, about 15% decrease. 
#2S, a similar unit at 2714 Lehman (same development) which was a resale (not delivered as new construction) sold for $525,00 on 8/11/2008.
 
2501 N Sheffield – built 2005
#3N sold for $525,000 on 6/9/2008
#2S sold for $465,000 on 3/17/2011
 
3344 N Halsted – built 2006
#3N sold for $565,000 on 3/17/2008 as new construction
#3N sold for $545,000 on 11/1/2010
 
639 W Briar – built 2006
#4E sold for $699,000 on 2/20/2008 delivered as new construction
#4E sold for $555,000 on 2/28/2011 
 
I think these examples well illustrate the point that the average sale price numbers are misleading as the value of real estate has definitely declined unit per unit.

Comments

By David Hanna,  Fri Apr 8 2011, 05:53
Great blog Karen, thanks for the hard work on the market analysis. You do a fine job of explaining the reality behind the numbers.
Dave

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