Looking Back at Real Estate in 2011
The real estate world is still reeling from the housing bust and economic disaster from a few years ago. Last year proved to be fertile ground if you had the capital as we are still dealing with a buyer’s market. The only problem is most of us simply do not have the dough to purchase homes at rocket bottom prices.
So let’s look at the bad first. According to estimates, 2011 brought in a record low 302,000 new home sales. Yes, it’s that bad. Developers as well as the construction industry face a downward spiral as production is stalled. The third quarter of 2011 shows that home prices were down in 111 of the 150 markets according to the National Association of Realtors. There simply is no pretty way of putting this so let’s be blunt: If you’re eager to sell your house, expect to take a loss.
While houses are selling at record lows, the problem lies in the fact that so many potential homebuyers are running low on funds as well so there is a strong cancelling out effect going on. After the real estate bubble busted open and revealed nothing but a bag of predatory lending and nasty credit default swaps that torched a plethora of first time homeowners, the housing market sank drastically.
However there is some good news as we move into 2012. The Illinois Association of Realtors reported that existing-home sales in the Chicago area actually improved just a bit in 2011. How much is a bit? A mere 1.3 percent gain over 2010. As dismal as it sounds, a gain of anything is always better than a loss. In the city of Chicago though, home sales dropped 7.2 recent from 2010 with just 17,715 homes sold.
Potential home buyers in December who were able meet the very strict credit requirements to purchase a home helped spike the market up 17 percent as the year came to a close. According to a report by the Chicago Tribune, December sales volume rose 12.3 percent in Cook County, 15 percent in DuPage, 21 percent in Kane, 26 percent in Kendall, 20 percent in Lake and 33 percent in Will. Within the city of Chicago, condo sales rose 5.3 percent in December while sales of single-family homes increased 7.8 percent from the year-ago monthly comparisons.
So what is a homeowner to do in this drab real estate climate? There are a few things that can help ease the burden of trying to sell your home these days. First, avoid putting your property on the market at an inflated price just to see if you will have any takers. Potential buyers can see an unrealistic price a mile away. Your intention needs to be to sell your property, not test the waters and see if you can get an unrealistic asking price. If you’re going to put your home on the market, do so with realistic expectations.
Second, put the proper price on your home and it will sell. No one enjoys taking a loss but if you are intent on moving, putting your home on the market with a realistic asking price will help get your home sold much more quickly than feeling the market out with an inflated price. It’s up to you if you want your home to sit on the market with little interest or have your home sold quickly.
Furthermore, if you in the market to buy property, lowballing will not give you much traction. Most homeowners eager to sell are already having a tough time dealing with the fact that they will be taking a loss. By offering them a lowball price you can easily add insult to injury and lose any possibility of the homeowner being open to working with you.
Finally, be honest with yourself about what you can and cannot afford. Owning property needs to be viewed as a long term purchase. The market fluctuates like any investment and being honest with yourself can make the difference between being secure in your home investment and losing sleep over the lack of foresight that could have saved you thousands of dollars and peace of mind.
The outlook for 2012, while not overtly optimistic, can be used to your advantage if you are honest with yourself and understand that in a fluctuating market the buyer with foresight will be rewarded.
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