Tuesday, June 12, 2007
Bottom of the market? Just some thoughts...
Sorry for the tiny, somewhat weak rant here but...
We just had a little conversation in my brokerage the other day about the bottom of the market. It is also a common theme we hear from some "would be" home buyers... "I'll wait until next year, or, two years from now and get the same condo for half the price!"
Unfortuantely, it doesn't work this way. If there is a bottom of the market then builders will stop building and converting units... rent out their existing units or sell for a slight discount over the other sold units. Existing units in nice neighborhoods in nice locations with the best views and finishes will become more valuable as construction slows.
There is such a thing as buying at the top of the market. That may have happened to some over the last two years, but a home is a home. You bought it to live in it, not for the sport of the investment. You may build equity and rent it out if you have to move... or just stay put. Or, if forced to move fast without improving the home, some may lose a couple bucks (but this has been the case at almost any point in market history).
But in Chicago, good luck waiting for the bottom in the likes of Lakeview, Lincoln Park, Lincoln Square, Gold Coast, River North, Bucktown, Ravenswood and many other desirable neighborhoods.
You may get a re-sale, upper bracket home for less than people paid in 2005...this is a luxury buy anyway. But don't count on this for $300-$700K condos and single family homes in the aforementioned neighborhoods. They will retain their value because people have dozens of reasons to live here.
So buyers... don't expect sellers to do back flips for you if they live in one of the great Chicago neighborhoods. Don't expect that bottom to magically appear if you want to live in Lakeview on a tree lined street with parks five minutes in one direction and nightlife five minutes in the other. Oh, and work a 20 minute "L" ride away...
Keep trying to game the market ...and watching everyone else buy homes, build equity and move up to the next purchase.
Price ain't going nowhere for you. And I don't feel sorry for spec buyers. I work with people who want to really live in this city and can't stand renting anymore. There's a lot of us.