Home Selling in Chicago>Question Details

Svillecondo, Home Seller in Chicago, IL

Should I wait it out a couple years?

Asked by Svillecondo, Chicago, IL Tue Jun 29, 2010

I have a 1br/1ba condo in Streeterville. Current list prices are approximately $20,000 below my $216k purchase price in August, 2006. What are your expectations for condo prices in my area over the next 2-5 years? I plan to get engaged soon and will need a bigger place in the relatively near future. Is it a better idea to bite the bullet now, or should I hold out for a while?

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Wow, condo markets are always tough. Takes more to get condo financing. You are the only one who can decide what's best for you. The saying "timing is everything" is worth while. But, I'd prefer to say the timing is right only if it's right for YOU! If you can rent the place while you move on to another home, that might be the ideal situation for you to wait it out and see what happens.

One of my esteemed colleagues here so aptly points out that we do not have a crystal ball! :) While we might have seen that the real estate market was headed for a level off period, there was no way any of us predicted it would be this long and this much of an unprecedented downturn!

Take some time to think about your timing, interview a couple of agents in person to see who you trust. That agent can keep you on an auto contact list to let you know how the market is going even if you decide you don't want to do anything for a year or two.
0 votes Thank Flag Link Wed Jun 30, 2010
Dear home seller;

Bite the bullet now. You said you need a bigger place. What ever you loose on the sale of your place you will make up on a purchase. There are so many great deals out there on foreclosures and short sales. If you wait couple years you might be able to sell for little more maybe? No one knows for sure it might be longer than that. In this case you will pay more on a purchase of a new bigger place and at the end the result is the same. Except if you bight the bullet now you will get to you bigger place sooner, Good luck(:
0 votes Thank Flag Link Wed Jun 30, 2010
It might be a good idea for you to get a more clear picture of what your property is worth. I live in Streeterville and am familiar with many of the buildings. I would be happy to provide you with some great comps.

If you are considering buying right now there are definitely deals to be had out there. Just to give you an example: a two bedroom property on Ontario was listed at 399,000 it sold almost two weeks ago for $342,000 and included parking. Parking in your neighborhood is about $30K so that is just under a 90K savings. If your are really looking at a 20K loss a 90K savings on your next property certainly makes up for that!

This is a tough decision to make, if I can be of any assistance please let me know.

Best of Luck!
Amber
acerveny@jameson.com
0 votes Thank Flag Link Wed Jun 30, 2010
I don't know maybe some of these Realtors have a crystal ball. I know I don't. If you should receive an offer for anything close to the listed price for your condo please , give it serious consideration,bite the bullet. This is a buyers market, and though you may get the impression you are giving the property away the truth is the buyers lender will make the final decision of the true value of the property. If you don't receive any offers to negotiate - well only you can determine how long you can carry the financial aspect. Becoming a Landlord is a consideration, however this to has its advantages and disadvantages. If you make the decision to purchase another property you most likely will have the opportunity to negotiate a better deal than you could have 2yrs ago. Of course this is dependent on several different criteria. Nothing is a given. You should always consider making the decision that fits your needs the best!!! Good Luck
0 votes Thank Flag Link Wed Jun 30, 2010
Sell now.

Prices are falling and how much farther we dont know. One thing I can tell you, is they sure as heck are not going up any time soon. So what you can get for your condo today, is going to be a lot more than you will get 2 years from now. What you lose out on now, you will make up for when you buy.

If someone is telling you that prices will be up in 2 years, well you are being lied to. Bite the bullet now. Its a terrible feeling but 20k now sounds better than 40k 2 years from now.

Matt Laricy
Americorp Real Estate
Brokers Associate, e-PRO
mlaricy@americorpre.com
708-250-2696
0 votes Thank Flag Link Tue Jun 29, 2010
If I know which building it was I might have more helpful information because there is a huge difference in values/perceptions on a building by building basis there.
It does seem that prices have bottomed out and appreciation historically is 1-5% above inflation not counting the 'bubble years' of 2000-2006ish.

If you can afford to rent it out and still buy, then perhaps that might work, but would you have a negative cash flow each month? Will you just lose equity when you sell or will you need to bring some $$ to the closing table? Can you afford to buy while maintaining your current condo. Lenders are very restirctive in qualifying a situation like yours. You might want to talk with a couple of them. My web site has some references.

Yes, it's a good time to buy,but this market will not change too quickly. It will be good to buy for the next few years, but the degree to which that is true depends on the neighborhood you are looking in, the price point you are at and the property type. Not everything is or will be equal.

philip
0 votes Thank Flag Link Tue Jun 29, 2010
Sville,

If you can sell and get out from under a property in the current market by only having to eat a $20,000 loss, many sellers would jump at this opportunity.

The reality is that if you were in a situation to sell and then buy a replacement home you probably could plan on making up the $20,000 difference on what you could save on the new purchase. With only a $20,000 deficiency you may be able to better than a "wash."

Good luck,

Bill
0 votes Thank Flag Link Tue Jun 29, 2010
My real estate partner and I attended last week a seminar conducted by the Chicago Association of Realtors regarding the market outlook for the Chicago area. The main speaker was the Chief Economist for Freddie Mac. The gist of the prognosis for our market was a bottoming out on prices in the 3rd quarter of this year and a 2 to 2.5% year over year appreciation for property values over the next 5 years. If you bought at the high end of the market in mid 2005-to mid 2006 and you wish to recapture your lost equity, you will have to wait 7 to 10 years before placing your property on the market. Interest rates are at an all time low-30 year fixed at approximately 4.67% and 5 year arms below 4%! This is the time to take advantage of reduced prices and interest rates on a move up property. Interest rates are predicted to climb faster than appreciation!
Web Reference: http://chicagoviewpoint.com
0 votes Thank Flag Link Tue Jun 29, 2010
One more thing... Understand that what you may lose on your condo, you may make it up on the lower values on a purchase.

Keep that in mind.
0 votes Thank Flag Link Tue Jun 29, 2010
1. You could keep it and rent it out if you have the financial ability to purchase another place and keep the condo.

2. Sell it and take a loss. Even with this there's no way to know how long it will take to sell. It's $20,000 less "plus" commissions, title fees, etc. Could be another $15,000.

3. Be safe and conservative and hold on to it for another year or 2 and see what happens.
0 votes Thank Flag Link Tue Jun 29, 2010
The current market awards people who are willing to take a hit while selling their existing properties in exchange for a killer deal on a bigger home. Remember, you may lose $20K on your condo, but you will most likely get a single family home for $40,000 - $60,000 less than you would had 3 years ago. Most experts agree that prices in Chicago area have dropped 30% off their peaks in 2007. Just be realistic about the price you sell your condo at and take advantage of both the lowest prices and lowest interest rates we have seen in a generation! Remember, all these properties will eventually appreciate and generally, investment in a single family home will bring larger profits than an investment in a smaller home.

Are you perhaps moving to the suburbs? How about Arlington Heights?
0 votes Thank Flag Link Tue Jun 29, 2010
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