Why are buyers on the fence?
Crain's reports on the 21% reduction in the number of August single family home sales from last year. The best quote in the story describes buyers waiting for the bottom and sellers refusing to adjust their prices.
Our Chicago-centric brokerage just had a long meeting about the media reports versus the reality of the housing market in Chicago. We reached a conclusion not all too shocking... but without the media emphasis on the negative.
Yes, there is a greater supply of housing than in the past in Chicago. This will effect sellers bottom line and create a slower rate of appreciation from a year to year basis. Low supply and irrational investment has been replaced by traditional buyers with more choices than ever.
But here is the reality as we see it. The conditions for buying a home are excellent. Great interest rates + good supply + highly desirable area to live. The financial and social reasons for owning a home are still the same. Equity + pride in ownership + appreciation. And, that preceived bottom of the market may never come in many, many Chicago neighborhoods. Home prices continue to appreciate by 3.4% in Chicago... Your rent might too!
The home buying and selling mentality must switch from the purely investment minded and anxiety centered on how much you'll make on your place (or what your friends and family made on theirs...) and back to realizing the value of buying and selling in the Chicago community.
There are many reasons to make sure you are not buying an overvalued property. And there are many ways to make sure you don't. One of them is not sitting on the fence and paying another year of rent.
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