Market Conditions: Chicago Sales Slide 18.3% YOY in December
As predicted, sales continued to slide year over year into the end of the year with no tax credit or other incentives to get buyers off the couch.
Median price also continued to fall.
From the Illinois Association of Realtors:
December home sales (single family and condominiums) for the city of Chicago totaled 1,444 sales, up 26.2 percent from 1,144 sales in the previous month of November; year-over-year sales were down 18.3 percent from 1,767 homes sold in December 2009. For the year, home sales are down 1.6 percent with 19,089 sales in 2010 compared to 19,398 sales for 2009.
The December monthly data for the last 4 years:
- December 2007: 1578 sales– with median price of $287,450
- December 2008: 1265 sales– with median price of $235,000
- December 2009: 1767 sales– with median price of $210,000
- December 2010: 1444 sales– with median price of $199,250
Sales for the last four years in Chicago:
- 2007: 27,503
- 2008: 20,946
- 2009: 19398
- 2010: 19089
A few months ago, the IAR was confident that yearly sales in 2010 would surpass 2009 but the slowdown in the fourth quarter negated that hope.
“December closed a year in the city of Chicago with just 1.6 percent fewer units sold in 2010 over 2009. Buyers are finding value and opportunities in the marketplace and making long-term investments in real estate due to compelling pricing and low interest rates. The median price for the city of Chicago in 2010 was $207,000, down from $225,000 the previous year, reflecting the influence of distressed properties in communities across Chicago,” said Mabel Guzman, president of the Chicago Association of REALTORS® and a REALTOR® with Envision Real Estate LLC, Chicago. “In 2011, REALTORS® will continue to lead the conversation regarding FHA and creative condo financing, loan limits and reasonable loosening of credit for qualified buyers.”
One of the most telling stats is that the median price continues to fall. It tells you the mix of what is selling.
“The recent income and corporate tax increases passed by the Illinois state legislature provide further complications for those trying to analyze the interaction between the economy and the housing market,” said economist Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory of the University of Illinois. “If workers and businesses are convinced that these actions will go some way to solving part of the state’s fiscal crises, then the outcome may be positive. The tax increases have also created some uncertainty about how these actions might affect Illinois’ economic recovery vis-à-vis surrounding states.”
Adds Hewings: “The picture is further complicated by the temporary upsurge in housing sales in the first quarter of 2010 that was fueled by the incentives to new and existing home owners; these increases set the stage for an expected dampening in the annual sales growth data for 2011 for the first quarter.”
Illinois Home Sales in December Up 11.1% from Previous Month; Sales and Price Declines Moderating [Illinois Association of Realtors, Press Release, January 20, 2011]
With these comments trying to spin how terrible the market is, the Illinois Association of Realtors has about as much credibility as the crack head on the corner begging for money saying he needs it to buy lunch.
Houses bought in dec 2009 have already lost 5.1% of their value. How much less will houses bought in dec 2010 be worth in 2011?
I’m guessing another 5%. And it will still be that way even if inflation starts to creep it’s way out of the qe2 shadows.
well not so sound like a real estate shill, but
in february 2010 they got rid of “spot approval” for FHA loans, and also I believe the “dough for dumps” was still in effect until september 2010. so I’m sure that these things, along with raising interest rates on mortgages in december 2010 didn’t help things, especially 09/10 y/y numbers
Inflation! Buy now or be priced out forever.
I’m not surprised that 2010 totals were worse than 2009 and 2008. Thing from what I’ve seen are slow and my large client base is sort of a barometer of the economy in general. 2010 was the year of stealth layoffs, reduction in hours, frozen salaries, reduced bonuses, etc.
Sellers, at least psychologically, appear to only partially accepted that 2010 and 2011 will bring further steep price declines; and it scares the crap out of them. And because of this, they take baby steps towards price reductions, holding on to their one valuable remaining asset for dear life.
So December is up MOM but not YOY….has the trend turned upwards? January will probably be MOM from Dec…which is seasonal, but it will be YOY from Jan 2010? Doubtful.
Being on the financing side of things, here is what I have seen. I am located just outside the city but in 2008 and 2009, I would say my business was split 60%/40% between the city and burbs.
In 2010, I would say 80% of my purchases were in the burbs. Of those purchases, 95% of them were people under the age of 35. A lot of them were obviously young couples.
Point being, the burbs have been annihilated from a value perspective (rightfully so). They took cuts harder and earlier than most parts in the city. This market favors certain buyers, those buyers are people/couples entering a new stage of their career, starting a family, or possibly looking for a cheaper lifestyle than provided in the city.
I think we are going to see the burbs turn before we see many parts of the city turn. If you break the numbers down, I don’t think the popular parts of the city have taken anywhere near the hit they need to before they rebound. Just my opinion.
A coworker put in an offer on a short sale. The seller’s bank acknowledged receiving the offer but since then nobody has heard anything. It’s been 3 months.
I’ve seen a number of places that I would be willing to buy at reasonable prices, but that almost always means a short sale. Why even bother putting in an offer if the bank is going to ignore it?
“Houses bought in dec 2009 have already lost 5.1% of their value.”
That conclusion is based on … what, exactly?
That the median price of homes sold in 2010 is 5% lower than those sold in 2009? Do you not see the problem with drawing that conclusion from those data points?
If something else, please post a linky.
You beat me to it anon.
There are a lot of houses and condos selling for under 50k right now.
Clio, where are you? Put a positive spin on this so that I (and many others) can laugh.
“Clio, where are you? Put a positive spin on this so that I (and many others) can laugh.”
I think he’s sleeping it off, based on a couple of late night posts that Sabrina deleted.
“Clio, where are you? Put a positive spin on this so that I (and many others) can laugh.”
here i may be able to help with that.
the numbers/data dont show a correct picture. how is what is happening in englewood/austin/washington park coherent to the gold coast. there are many many people with money and those people are not spending it in the those areas they are buying in the pamolive/ELD/OakBrook/Keni so those areas will hold up not see any “damage” in pricing.
even if the price is a 15% down NOW all these people with money can hold on for 2 years and the market will pick up again. Its only a unrealized “paper” loss right now.
just buy now why wait, the place you like now will be more expensive later and with rates going up you will be priced out of the market.
wow, we really just dance in circles around here eh?
If you bought a crappy house post 2006, you will loose money. If you bought a decent house at a decent price with the intent to live and not flip for a profit, you are just fine.
PS: those houses and condos selling for ~50k are one step up from a cardboard box and shopping cart on lower wacker.
The median is falling because of the mix of homes that are selling; in many areas outside of the GZ it is primarily lower end foreclosures, distressed multi-units and short sales. Many move-in condition homes priced on the higher end of the market are simply languishing. With sales being so slow for so long now, it sort of makes you wonder if the middle to high end (not ultra high end) will ever come back. Sure some people will pay a higher price for a home that’s move in ready, but, based upon the evidence shown above, it’s not really all that many, at least right now. An $8,000 tax credit boosted things a bit for a while, with a drop off afterward. I’m starting to believe that the middle to high end isn’t just quiet, but has actually disappeared. And home prices will be in a tight range depending on buyer’s incomes, not dependent upon how much money the buyer can bring to teh table from his previous sell. Many buyers who have equity bought pre-boom at point. I’ve seen lots of properties that were listed at or near purchase price from 2003,2002 etc and aren’t moving. So, again, prices will need to be based upon incomes of buyers (which for 75-80% of the buying population in fairly tight range). The $500k house sold for $500k in 2005 because either the buyer had plenty of equity to bring to teh table or the buyer had access to funny money. Both of those have dried up, and, the for most cases, the buyer needs either a saved downpayment or an inheritance. So that $500k home is really worth only $320,000, whereas the buyer can come to the table with $64,000 of savings and a mortgage in the $200’s which is fairly prudent based upon his HH income of $70-$110k.
The median prices are looking good for buyers in the sidelines. At least for me.
I think this just reiterates that sellers need to get very aggressive about their list price. Stop being delusional. If you want to sell in less than a year, you really have to be competitive with the short sales and foreclosures.
“I think this just reiterates that sellers need to get very aggressive about their list price.”
To an extent. And buyers need to realize that this isn’t the 90’s; you are not going to steal the house away from someone and make them come to the table with 20+%.
The cruel irony is that in order for a seller to have significant equity AND be able to compete with the foreclosures/short sales, they need to have bought pre-boom and not done the HELOC thing.
There are so few of those homes on the market and they all sell fast.
________________________________________________________
You can steal the house from teh bank in a foreclosure, because quite simply, the home owner can’t afford to come to the table with the 20%.
“To an extent. And buyers need to realize that this isn’t the 90’s; you are not going to steal the house away from someone and make them come to the table with 20+%.
“you will loose money.”
/facepalm
Link to a great blog, “The Automatic Earth”, that frequently touches on the insanity of leverage and the housing mess:
http://theautomaticearth.blogspot.com/2011/01/january-20-2011-limbo-loans-we-need.html
Hey, TB, Nicole Foss (Stoneleigh on AE) spoke at a United Church in Rogers Park last night. Did you see her?
Groove nice clio style post…….. I would have added something about all the sideline buyers that will flood the market in the spring…….. the stock market is flying…….. also I think now is the time to add to the mix the European Buyer, and the new Chinese Buyer that is waiting in the wings……
“If you bought a crappy house post 2006, you will loose money”
Im going to re-phrase: you will loose money short term, give 10 years and you will be fine ~2020.
There appears to be something up with the announced Chicago median.
“December 2009: 1767 sales- with median price of $210,000
December 2010: 1444 sales- with median price of $199,250”
The MLS shows the following:
December 2009: 1820 sales- with median price of $208,000
December 2010: 1466 sales- with median price of $166,000
Here is a distribution of December sales by price. The categories are sale price or under in first column (in thousands), followed by 2009 closings, 2010 closings, 2009 % of total, 2010 % of total. The 2010 distribution shows that something is up with the IAR’s reported median.
$50 259 256 14.2% 17.5%
$100 427 442 23.5% 30.2%
$150 634 663 34.8% 45.2%
$200 884 843 48.6% 57.5%
$250 1,079 959 59.3% 65.4%
$300 1,238 1,049 68.0% 71.6%
$350 1,365 1,136 75.0% 77.5%
$400 1,475 1,212 81.0% 82.7%
$450 1,552 1,260 85.3% 85.9%
$500 1,614 1,291 88.7% 88.1%
$550 1,654 1,317 90.9% 89.8%
$600 1,675 1,334 92.0% 91.0%
$650 1,692 1,343 93.0% 91.6%
$700 1,709 1,354 93.9% 92.4%
$750 1,721 1,364 94.6% 93.0%
$800 1,731 1,373 95.1% 93.7%
$850 1,745 1,383 95.9% 94.3%
$900 1,754 1,392 96.4% 95.0%
$950 1,763 1,398 96.9% 95.4%
$1,000 1,767 1,403 97.1% 95.7%
$1,100 1,773 1,409 97.4% 96.1%
$1,200 1,784 1,412 98.0% 96.3%
$1,300 1,790 1,415 98.4% 96.5%
$1,400 1,793 1,420 98.5% 96.9%
$1,500 1,798 1,425 98.8% 97.2%
$1,600 1,803 1,429 99.1% 97.5%
$1,700 1,805 1,435 99.2% 97.9%
$1,800 1,806 1,438 99.2% 98.1%
$1,900 1,809 1,439 99.4% 98.2%
$2,000 1,811 1,442 99.5% 98.4%
$2,200 1,812 1,443 99.6% 98.4%
$2,400 1,815 1,444 99.7% 98.5%
$2,600 1,816 1,447 99.8% 98.7%
$2,800 1,818 1,451 99.9% 99.0%
$3,000 1,818 1,454 99.9% 99.2%
$3,500 1,820 1,460 100.0% 99.6%
$4,000 1,820 1,460 100.0% 99.6%
$4,500 1,820 1,461 100.0% 99.7%
$5,000 1,820 1,462 100.0% 99.7%
$5,500 1,820 1,462 100.0% 99.7%
$6,000 1,820 1,462 100.0% 99.7%
$6,500 1,820 1,464 100.0% 99.9%
$7,000 1,820 1,465 100.0% 99.9%
$7,500 1,820 1,465 100.0% 99.9%
$8,000 1,820 1,465 100.0% 99.9%
$8,500 1,820 1,465 100.0% 99.9%
$9,000 1,820 1,466 100.0% 100.0%
Its LOSE dumbass… not LOOSE!
Easy now, sonies, it’s not like “lose” is anything a-fed is concerned with. Same goes for real dollars, apparently.
I was thinking this morning about the CC commenters who love to claim that Chicago is Detroit in the making and that everyone is going to move to the sunbelt. Then I started thinking about all the reasons why I moved from the sunbelt to Chicago: many great universities to work for, great public transit, direct flights to anywhere, amazing architecture, museums, theater, socially liberal neighbors and politicians…all at a cost of living that is way lower than NYC, Boston, DC, California, and possibly the pacific northwest. Why doesn’t anyone here seem to enjoy giving Chicago its due? Its hard for me to imagine Chicago turning into Detroit in the next 50 years because everyone chose to live in Phoenix or Atlanta. Sunshine and ungodly hot summers do not (on their own) a mass exodus make.
“I was thinking this morning about the CC commenters who love to claim that Chicago is Detroit in the making and that everyone is going to move to the sunbelt.”
Could you point them out to us? I think chicagobull is a parody, so who else?
A-fed, you said you were a super lawyer success story – I would think you would spell lose properly if that was the case – sorry. I’m a grammar nazi.
“I would think you would spell lose properly if that was the case – sorry. I’m a grammar nazi.”
Spelling =/= grammar. 30 days in the cooler for you, Riz.
I looked back and saw that the IAR median for Chicago is, ahem, questionable for November, too.
From IAR:
November 2009: 1859 sales- with median price of $215,000
November 2010: 1144 sales- with median price of $206,000
From MLS:
November 2009: 1905 sales- with median price of $215,000
November 2010: 1135 sales- with median price of $180,000
It looks like the “mistake” or “new math” wasn’t in place in October.
From IAR:
October 2009: 2012 sales- with median price of $215,000
October 2010: 1217 sales- with median price of $183,000
From MLS:
October 2009: 2068 sales- with median price of $215,000
October 2010: 1225 sales- with median price of $183,000
Bob said, “Chicago’s oppressive regulations and government intervention will ensure that if we’re headed to Ohio pricing its on it’s way to Detroit pricing. Rest assured.”
i don’t comment often said “IMO, my #3 (or Sabrina’s #4) story should be the neighborhood old-timers putting up their homes for sale and heading off to enjoy their golden years in the Sun Belt (due to increasing taxes, perhaps premature retirement from work, etc), thus adding to the supply overhang.”
homedelete has mentioned before that he’ll be retiring to the sunbelt and I think he’s a fan of the theory that this is going to be such a large trend that it will hurt Chicago real estate in a significant way, but maybe that’s not what he thinks. I could be wrong.
Do I hate Chicago winters? Absolutely. Would I consider moving if the cost of living here reached levels comparable to liberal cities on the coasts? Probably. I’m just trying to point out that some people actually leave warm, sunny places to move here for reasons bigger than weather and low taxes.
Um, none said we are “Detroit in the making.” There have always been many snowbirds, both here and in Detroit. Noting a potential increase due to demographics (and cheaper prices in the sun belt once again) does not mean “Detroit in the making.”
Grammer people (sonies, Riz) – I am an engineer, not a lawyer or some LAS major….I write in bullet points and spell poorly. Glad you have enough time to point out my mistakes instead of worrying about your own situations. F7 is a life safer.
BTW, how old are you and how succesful? Correct grammer and spelling has got you how far in life? jk.
its spelled GRAMMAR dumbass
Whatever sonies, seems like your best quality is the fact that you can spell and correct people. Enjoy that, hope it works out for you.
sorry those are like my two most rage inducing internet spelling peeves
definatly always gets me.
juliana –
I did not know that! Sorry I missed her!
Fuck your internet spelling peeves, how bout them apples?
My biggest pet peeve are assholes who correct better people than them in attempt to bring them down to their level – do u understand that…or is my subject-verb-asstense-agreement off a bit?
“My biggest pet peeve are assholes who correct better people than them in attempt to bring them down to their level – do u understand that…or is my subject-verb-asstense-agreement off a bit?”
Funny!
its spelled YOU, not U
Danny: What I said is that the sunbelt gained congressional seats this census, particularly TX in the sunbelt gained 4. IL is losing one, NY is losing two, etc. The population growth is coming from the sunbelt. I may or may not retire there. But I mentioned that about half of my cousins, roughly a dozen, under the age of 45 moved to sun belt – primarily southern cali, FL, NV and SC. The choose not to stay in WI or IL and of those that left, only one has returned.
Unless we have some sort of fresh water wars or something, I think that the area in general will lose population. I never make the argument that chicago is becoming detroit, that’s just a strawman argument. But I have mentioned that long term the center of gravity is moving.
sonies, it’s spelled “it’s” not its. one of my biggest pet peeves.
“its spelled YOU, not U”
“and the new Chinese Buyer that is waiting in the wings…”
classic, valasko 🙂
““and the new Chinese Buyer that is waiting in the wings…”
classic, valasko”
Wait, Hu isn’t here to scout for a big buy of Chicago condos? I really though this was a house hunting trip.
I find the pricing comments derived from this data relatively entertaining. The median pricing changes based on the IAR are meaningless. You have to look at CS or another index that reviews like-for-like sales not just the overall median when discussing values.
As usual, G’s information is some of the more interesting data posted here. It actually shows that the higher end (+$1mm) homes are performing better now than a year ago at 63 sales vs 53 a year ago (which makes sense b/c mortgage requirements for qualified buyers in that range have loosened meaningfully). Because of this, the average price in 2010 is up meaningfully vs the average price in 2009 (using G’s data and assuming the midpoint as the average price for each of the cohorts, the average price of a sold home is up from $331k to $359k – up 19%). Prices are going through the roof! (this is obvious sarcasm for those too simple to get it but demonstrates why the pricing data here doesn’t make sense and also highlights that things are not a complete disaster in the higher-end market where most people say “there is no way anyone can afford this”.
“are waiting in the wings”
Better be carefull the grammar police will be all over mt azz!
G,
you and IAR pull form the same database is the IAR excluding anomalies and arms-length trans. how does the MLS record multi-property sales? could that be the diff?
“Wait, Hu isn’t here to scout for a big buy of Chicago condos? I really though this was a house hunting trip.”
anon,
its spelled Thought, not though 😉
you mean HU is not here to buy a unit 235 van buren? i swear i heard him whisper i want 40 in Aqua?
“To an extent. And buyers need to realize that this isn’t the 90’s; you are not going to steal the house away from someone and make them come to the table with 20+%.”
The year 2011, but I have seen some home close for 98-99 pricing. Could this be the trend? Should we just write off the last decade as a zero gain for real estate? By zero, I mean a home purchased in 1999 for 200K today can sell for 200K.
“By zero, I mean a home purchased in 1999 for 200K today can sell for 200K.”
That’s really a significant loss, in purely financial terms.
And, yes, there are and will be a number of houses/condos that sell for pre-Y2K nominal prices. Yes, this *will* include non-f/c, non-REO sales. The question is, will that include the majority of desirable properties in the more desirable locations? Possible, but I think not.
The most interesting stats I believe is this:
“$150 634 663 34.8% 45.2%
$200 884 843 48.6% 57.5%”
Roughly a 1/3 of all properties sold were less than $150,000 in 2009 whereas in 2010 it’s nearly half; and then the firm majority of homes were under $200k in 2010 (57.5%) whereas less than half sold for $200k in 2009 (48.6%).
The trend is pretty clear that lower price properties are the market with sub $150k making up about half of that market. $150k barely buys a studio in desirable neighborhoods but we have to remember that most people in the city dont’ live in the GZ or what otherwise be deemed a ‘desirable’ neighborhood by the snobs here.
This is why when I say that the above median end of the property market has been severely reduced. It’s not just that the buyers are sitting on the sidelines to buy the $200k+ properties – they’re coming off the sidelines and they’re buying the $150k+ properties instead. The super high end i.e. jumbo loans and higher is different (obviously) and much much smaller than the conforming market. But you can’t have a healthy functioning real estate market if only the jumbo+ market is healthy.
I live in a $100k + household with good job security, and I regularly do the budgets of households with $100k+ incomes (but surprisingly, none have yet surpassed my HH AGI for 2009) – and after a mortgage payment on a $350,000 or $400,000 home, plus HOA, plus utility bills, plus car payment, plus student loans, nanny or daycare and savings….there isn’t much left. No wonder they say “i don’t even feel middle class”. Reduce the $400k mortgage down to $200 and you give buyers SOOO much more breathing room to pay for the daycare, student loans and take on another car payment when the 2002 Honda Odyssey finally dies.
“By zero, I mean a home purchased in 1999 for 200K today can sell for 200K”
Sure it CAN…but overall, that is not the trend. Show me the data that supports this…
AAAAnd let’s just say this is true….the owners would most likely have plenty of equity in their homes such that they wouldn’t be in financial trouble.
“The year 2011, but I have seen some home close for 98-99 pricing. Could this be the trend? Should we just write off the last decade as a zero gain for real estate? By zero, I mean a home purchased in 1999 for 200K today can sell for 200K.”
Absolutely not just as you have seen homes close at 98-99 pricing, I even got a condo at 93 pricing, there are plenty of homes closing at 2003, 2004, 2005. Sure 2006-2008 is less common, but there are even examples like the one we chatted about earlier this week of something closing over its peak pricing in old town.
Dan: Yes, welcome to the club. My opinion is that nominal real estate values for most properties will be the roughly the same as in 1999. I’ve been saying that since about 2005/2006… However, as with everything in my life, nothing is original. I discovered the idea on the housing bubble blog as people were discussing their various reasonings where prices would end up after the market ‘recovers’ or ‘stabilizes’.
About a year and a half ago a realtor told me that housing prices in Barrington/Palatine/Inverness were already at 2000 prices and cheaper. She said her house was worth the same as when she bought it in the summer of 2000. That put a smile on my face.
I’ve heard even more radical ideas where people say that 95% of 3/2’s nearly anywhere in the country aren’t worth more than $250,000. doesn’t matter if it’s a condo, house, ranch, townhouse, or where it is (except for manhattan, beverly hills, glencoe etc). but in any non descript city or suburb, that’s what it should be worth.
Now I don’t necessarily agree with that, but there’s some validity to it. $250,000 might be the high end for a 50’s ranch in palatine and $100k for the same house in Des Plaines. Put that ranch equiv in Lake view (which is a 3/2) and maybe it’s worth $250k or $300 but not much more than that.
“sonies, it’s spelled “it’s” not its. one of my biggest pet peeves.”
Damn how could I be so stupid!
The tend is down A-Fed. Look at the CS index – we’re closer to 1999 pricing than 2006 peak pricing. the trend is your friend. I’m sure you’ve heard that before.
“Sure it CAN…but overall, that is not the trend. Show me the data that supports this…”
“My opinion is that nominal real estate values for most properties will be the roughly the same as in 1999.”
Are aggregate wages higher or lower than in 1999? I’d guess lower. Are property and other taxes higher or lower than in 1999? Certainly higher. So I think we could easily go lower on real estate values. Very easily.
Yes I could see a scenario where Chicagoland CSI goes below my long-term prediction of 94-95.
On many levels I agree with you Bob but I can’t go too far off the deep end or else I lose credibility; but I have heard a lot of noise saying early 1990’s pricing for a majority of the country. hell, the inland empire, phoenix, NV, areas of florida….many regular homes are selling at early 1990’s pricing, or better. maybe they’re not ‘desirable’ like ELV but people live there and there are real homes there….and they’re priced at early 1990’s pricing. Places with lower economic socio classes will be cheap cheap cheap. Bungaglows on the southside should have never ever sold for $200k or more.
“#Bob on January 20th, 2011 at 1:47 pm
“My opinion is that nominal real estate values for most properties will be the roughly the same as in 1999.”
Are aggregate wages higher or lower than in 1999? I’d guess lower. Are property and other taxes higher or lower than in 1999? Certainly higher. So I think we could easily go lower on real estate values. Very easily.
Yes I could see a scenario where Chicagoland CSI goes below my long-term prediction of 94-95.”
I used to like sonies.
HD – CS is BS and includes distressed properities, short sales, foreclosures…etc….right? Thats skewed data, not accurate.
“I’ve heard even more radical ideas where people say that 95% of 3/2’s nearly anywhere in the country aren’t worth more than $250,000. doesn’t matter if it’s a condo, house, ranch, townhouse, or where it is (except for manhattan, beverly hills, glencoe etc). but in any non descript city or suburb, that’s what it should be worth. ”
Uh, yeah, that’s fundamentally based on replacement cost–in most of the country, a “typical” 3/2 is ~2000 sf, costing ~$200k to duplicate as new construction and the lot, as developed, with utility hookups, grading and shared cost of subdivision, roads, utility mains, etc is ~$50k. When you diverge from that “typical”–whether thru larger lot sizes, unique locations, building up rather than out, regulatory costs, etc, etc, etc–you get out of the 95% (or 90% or 97%, whatever) of “typical” and get higher costs.
Much of Chicago, by land area, a buildable lot isn’t really worth $50k right now, and some parts it’s still worth considerably more. Plus, a ~2000 sf 3/2 SFH is relatively rare as a new construction home in the city, esp. in areas with above-average land prices. It’s 3 or more 2000 sf condos or a 4000+ sf SFH. And, yeah, that 4000 sf SFH, if done to the same cost ratio as the “typical” house (but assuming a higher replacement cost bc with larger comes more expensive materials and finishes) should be something like $750k.
But you don’t (yet?) find buildable lots in neighborhoods that support $750k+ homes for “only” $150k, so that gets tacked on to current pricing, and you get $1mm+ for 4000 sf. And there’s a lot of “newcarsmell” premium still out there at certain points, so that’s tacks on a few shekels to the pricing, too.
Basically, short point very long and then short-ish again, OIP isn’t “typical” now, isn’t likely to be in the near future, but it’s certainly a more-than-plausible argument that typical 2000 sf homes in generic-suburb-X are headed to, and should remain at, a value of ~$250k in 2010 dollars (adjusted by inflation in building costs, rather than broader inflation).
But A-Fed, every home price will eventually be priced liked distressed properties. It’s not like if distressed properties disappeared tomorrow, suddenly buyers are going to have significantly more money to pay for regular resales.
Moreover, there are so many distressed properties ‘in the pipeline’ that its going to take years to work through them all. So resales and distressed are one in the same as far as pricing goes. And its going to be that way for a long, long time.
Which is why when I say that the above median pricing is disappearing because it is. the new median keep moving lower and lower as the higher end resale market just disappears. It’s scary actually, but good for the country and for middle class lifestyles. Bad for bankers who earn less interest.
“#A-Fed on January 20th, 2011 at 1:58 pm
HD – CS is BS and includes distressed properities, short sales, foreclosures…etc….right? Thats skewed data, not accurate.”
Bob: “Are aggregate wages higher or lower than in 1999? I’d guess lower. ”
In real dollars? Yeah, I’m nearly certain you are correct.
In nominal dollars? Not. A. Chance.
HD: “hell, the inland empire, phoenix, NV, areas of florida….many regular homes are selling at early 1990’s pricing, or better. ”
How do they know? In the early 90s, those areas were desert, desert, desert and swamp, respectively. If that anecdote relates to houses in those areas that existed in the early 90s, then, yeah, of course, b/c every one of those areas has *HUGE* inventory of larger, newer houses for not too much more $$. Have you *been* to (eg) Riverside County?
and that was not my argument, but an argument that I’ve heard being argued; and that’s basically what I was repeating, that the typical house in 90 or 95% of the country shouldn’t cost more than $250k. It’s not just OIP but Jupiter FL or Omaha NE or Stockon CA or Hartford CT. Etc. But the equiv of a ‘typical 3/2’ in the North side of the city is a 2/2 condo – and outside of a few select condos, most should be in the $250k range, tops. I somewhat agree with that in theory, but there are plenty of exceptions.
“Basically, short point very long and then short-ish again, OIP isn’t “typical” now, isn’t likely to be in the near future, but it’s certainly a more-than-plausible argument that typical 2000 sf homes in generic-suburb-X are headed to, and should remain at, a value of ~$250k in 2010 dollars (adjusted by inflation in building costs, rather than broader inflation).”
“HD – CS is BS and includes distressed properities, short sales, foreclosures…etc….right? Thats skewed data, not accurate.”
whether you or clio want to admit it, those sales are part of market and people view them as comps. if there is a foreclosure of a unit in a building (and that foreclosure wasnt trashed by the previous “owner”), the sales price of the foreclose is now a comp for any future prospective buyer of another unit in that building.
foreclosures, short sales, etc are so rampant, that they ARE comps.
anon(tfo) again, there are reasons those deserts and swamplands are priced better than 1999 pricing. But many are claiming that they are already there, and getting better every day. Overbuilding, funny money, flat real wages, inflation between 1999-today etc. It all contributes to the depressed home prices in those areas.
I read a story, i wish I could find it, a realtor in the IE sold a house in 1979 for something like $50,000 and now 20 years later he was selling the same house as an REO, with a listing price of $49,000. I can’t remember where it was, maybe Perris CA or whatever Merced maybe, regardless, those stories are there.
“actually shows that the higher end (+$1mm) homes are performing better now than a year ago at 63 sales vs 53 a year ago”
LVSF, check out yesterday’s post on 1722 N North Park for more data and context for that improvement.
“Because of this, the average price in 2010 is up meaningfully vs the average price in 2009 (using G’s data and assuming the midpoint as the average price for each of the cohorts, the average price of a sold home is up from $331k to $359k – up 19%).”
Here are the averages:
December 2009 average sale price = $281,530
December 2010 average sale price = $303,925 (+8%)
“you and IAR pull form the same database is the IAR excluding anomalies and arms-length trans. how does the MLS record multi-property sales? could that be the diff?”
groove, I doubt they are excluding anything but the definition of a median. The difference in total sales is due to when they pull them since late entries and adjustments commonly occur. As you can see above, I don’t have a difference with last year’s Nov and Dec medians. Even if I took the 22 lowest sale prices (all under $9500 btw) off of my Dec 2010 list so that our sales totals are equal, my median still only moves from $166,000 to $170,000.
“I read a story, i wish I could find it, a realtor in the IE sold a house in 1979 for something like $50,000 and now 20 years later he was selling the same house as an REO, with a listing price of $49,000. I can’t remember where it was, maybe Perris CA or whatever Merced maybe, regardless, those stories are there.”
And, unless the owners basically redid the *entire* place, including all the plumbing and electric, I’d maintain that $50k was not a bona fide “deal”, especially in light of the thousands of houses built in similar locations in the past ten years, with many available below replacement cost.
And, I knew it wasn’t *your* theory, but I was agreeing that it’s pretty well-grounded for “typical”, well-maintained 2000 sf SFHs in generic-location-X. Tho, I’m not sure that a 2/2 in LV is the right “equivalent”, unless you mean a #2 unit in a 3-unit, and then you still have the issue of the cost-of-land to build a replacement equal, on which I think the whole theory rests.
G,
so my take from the number you provided is that IAR are “Juking the stats” to make the hurt not look as bad?
“groove, I doubt they are excluding anything but the definition of a median. The difference in total sales is due to when they pull them since late entries and adjustments commonly occur. As you can see above, I don’t have a difference with last year’s Nov and Dec medians”
anon(tfo) the theory might hold true if the cost of land on the northside drops significantly. BUt there are no more tear downs so land prices are based on rehabs or gut rehabs.
“anon(tfo) the theory might hold true if the cost of land on the northside drops significantly. BUt there are no more tear downs so land prices are based on rehabs or gut rehabs.”
It already *has* dropped significantly. But I don’t see “prime” (broadly defined) buildable lots dropping to $50k, largely bc of the near absence of liability-grade structure that you note. Certainly true that the stable level for typical place “should” be right around replacement cost, tho the trough might well dip below that, and any given place (even a well-maintained one) can *easily* fall below replacement for an extended period.
“foreclosures, short sales, etc are so rampant, that they ARE comps.”
jfmiii, And they are increasing, too. 39% in Oct, 40.6% in Nov, and 43% in Dec. The Nov to Dec overall sales increased 29%, yet SS/F sales increased 36.4%.
I have recently posted the number of foreclosure filings relative to current sales volume which showed that the trend will not be ending anytime soon.
Early 90’s pricing seems just too far down. I will admit that is my reaction.
I think wages being stagnant, current unemployment, population growth trends all point to downward pressure. But some folks are insisting on some super substantial drops. That just seems unlikely to me. Oh well, we’ll see.
“Early 90’s pricing seems just too far down. I will admit that is my reaction. ”
How do you feel about early-90s pricing, adjusted to real dollars? I seriously doubt early-90s nominal (hell, seriously doubt lat-90s nominal), but find anything-90s + Inflation to be possible to very likely. We’re almost there, already, per case-shiller.
ps: this *does*not* in any way mean that any given (much less every) property could be had at some point for the 91 or 95 or 99 price + inflation, but there will be a helluva lot of properties that trade below that number, too, so there you go.
Englewood, Roseland, several So. Suburbs, etc, have scores of properties that are back to 1960’s pricing. Yes, 1960’s. They are typically pretty beat, but they are at 1960’s nominal pricing.
People thought it was CRAZY TALK to suggest that prices would ever decline, especially as significantly as they did. Respected people too.
So today when I say early 1990’s prices it gives a gut reaction, just as in 2005, it was craziness, and only loony people would ever suggest that prices would return to pre-bubble levels. In fact, people denied there was even a bubble – and i’m not quoting david learah here either.
* Ron Shuffield, president of Esslinger-Wooten-Maxwell Realtors says that “South Florida is working off of a totally new economic model than any of us have ever experienced in the past.” He predicts that a limited supply of land coupled with demand from baby boomers and foreigners will prolong the boom indefinitely.
* “I just don’t think we have what it takes to prick the bubble,” said Diane C. Swonk, chief economist at Mesirow Financial in Chicago, who was an optimist during the 90’s. “I don’t think prices are going to fall, and I don’t think they’re even going to be flat.”
* Gregory J. Heym, the chief economist at Brown Harris Stevens, is not sold on the inevitability of a downturn. He bases his confidence in the market on things like continuing low mortgage rates, high Wall Street bonuses and the tax benefits of home ownership. “It is a new paradigm” he said.
“#mhw on January 20th, 2011 at 2:49 pm
Early 90’s pricing seems just too far down. I will admit that is my reaction.
I think wages being stagnant, current unemployment, population growth trends all point to downward pressure. But some folks are insisting on some super substantial drops. That just seems unlikely to me. Oh well, we’ll see.”
“but find anything-90s + Inflation to be possible to very likely.”
The longer this employment trough goes on I am more bearish on housing. I think Chicagoland could easily see late 90s nominal pricing. Perhaps even mid-90s nominal pricing–might take us five to ten years to get there though.
“The longer this employment trough goes on I am more bearish on housing.”
just throwing this out there,
but if i was unemployed or under-employed and then finally get a job/or better job i dont think i would really feel safe buying anything big for at least 5 years.
so in my eyes even if we fix unemployment it will still take a while to trickle into RE wouldnt you think
“ps: this *does*not* in any way mean that any given (much less every) property could be had at some point for the 91 or 95 or 99 price + inflation, but there will be a helluva lot of properties that trade below that number, too, so there you go.”
Aha, taking the initiative to remove the straw before the men can be built? Might work, if they only had a brain.
groove, the unemployment churn will do as you say. All of those months of record new unemployment claims add up to many, many, people who aren’t going to be buying anytime soon.
But the black box model claims that new jobs are being created every day and that workers are dropping out of the work force; so the unemployment number keeps dipping lower and lower.
“#G on January 20th, 2011 at 3:14 pm
groove, the unemployment churn will do as you say. All of those months of record new unemployment claims add up to many, many, people who aren’t going to be buying anytime soon.
“
“Aha, taking the initiative to remove the straw before the men can be built? Might work, if they only had a brain.”
Might not, but it makes for a clearer position.
“I used to like sonies.”
aw don’t say that dollface, you might upset bob!
Also, I’m pretty delusional lately due to lack of sleep, and I am really only just kidding around with a-fed I am not the spelling/grammar nazi type at all! I am just ragging on A-fed because he said to buy some of the most god awful stock ideas I have ever heard.
Sonies – and this, not even 30 year old has made close to a half-mil off those stocks
“jfmiii, And they are increasing, too. 39% in Oct, 40.6% in Nov, and 43% in Dec.”
For those who argue that distress sales aren’t the norm- this data pretty much says it all. We will soon be at 50% of all sales as foreclosures/short sales.
If you argue that these sales are mainly all in “non-prime” areas- what does that say about the sales volume in the “prime” areas where there are fewer foreclosures? Sales are falling off a cliff there.
Also- if real estate purchases are purely psychological- then the psychology right now is to buy a distressed property.
Sabrina,
Do you think buyers are looking for the monetary value of a distressed sale (price) or just the fact that it is labeled a foreclosure/shortsale, etc..
My point is that if the latter is true, and the historical sterotype that a distressed sale should be avoided doesn’t hold water anymore, what’s to stop sellers from teaming up with banks, overpricing propertites and labeling them a “distressed property” to lure buyers in???
“Also- if real estate purchases are purely psychological- then the psychology right now is to buy a distressed property.”
Best comment of the day.
_____________________________________________________
I have to admit that idea is creative but not going to work. Often, selling your home comes down to three things: price price price. You can label it distressed but if it’s not priced distressed…it ain’t gonna work.
“what’s to stop sellers from teaming up with banks, overpricing propertites and labeling them a “distressed property” to lure buyers in???”
HD – just tryin to think outside the box. I mean, I know its not going to work but whats the value of a distressed property. I view the value of a dollar differently than you, to me 300k is different than 300k to you. There’s obvi no “correct answer” unfortunately, but bringing in the psycholocical aspect, would you feel better overpaying for a distressed property?
See I think price is secondary to intention. If your intention is to live in the place for 30 years, price is of a lessor concern. If you are looking for a flip, live short term, or dont have much loot, then price jumps to the front line.
What is really going to be interesting is to see the effect (psychological) that all the closings at the Elysian (which took place in the past month) has on people. Multiple units over 3 million closed in the past few weeks and I have to think that it will have a profound effect on the “average sales price”. If the media wants to hype up the spring market, they could make a big deal of it – I can see the headlines now: “Home prices soar in Chicago” and, although we know it is BS – I think it WILL have a profound psychological effect on many sidelined buyers.
Can’t help but wonder how much of that “population increase” in TX consists of border-jumpers and their dreaded “anchor babies” whose presence cause so many Southwesterners to start shaking in their boots…even as they employ the “increasers” off the books and rejoice in their enhanced Congressional representation.
With regard to short sales: I am one of many “once burned twice shy” Realtors who will actively discourage my buyer clients from EVEN THINKING about going this route. I’m representing a CASH BUYER whose contract to purchase a condo in almost “mint” condition on the NW side of Chicago should have closed before Thanksgiving. Now, thanks to all kinds of nonsense on the bank’s part, we’ll be lucky to close by Valentine’s Day. Until/unless the still-vague laws covering these sales become more buyer-friendly, Realtors are going to remain highly skeptical about pushing these “deals.”
Chi-towngal,
I completely agree – I personally think that short sales will fall by the wayside because of the increasingly overwhelming unpopularity of them – very very few buyers will go this route.
“I completely agree – I personally think that short sales will fall by the wayside because of the increasingly overwhelming unpopularity of them – very very few buyers will go this route.”
I actually agree with all of this sentiment. I’ve gotten e-mails from buyers who tell me that they wait 6 months or longer and don’t hear a word from the bank so they walk away. What’s the point if you can’t actually buy the property? Buyers WILL just stop being interested in the short sales.
What that means, however, is that all those short sales will eventually go into foreclosure. And foreclosures are far easier to buy (since the banks actually have incentive to get rid of them.) The result will be downward pressure on pricing for years to come as it all works its way through the system.
I’ve been following one short sale in the south loop that was on the market as a short sale for 2 years before finally being withdrawn without selling. The bank has taken the unit back but it hasn’t reappeared as a bank owned unit yet on the MLS. By the time it finally does- it’ll be 3 or 3 1/2 years since it was originally listed for sale. And THEN it will finally sell- at like 40% off the prior 2005 purchase price.
Sabrina, I also think that foreclosures are not going to be very popular either – simply because most of these properties are going to be in terrible shape. Think about it – it takes about 2 years (or longer) for the foreclosure to go through and probably another 6 months to get the property on the market. In the meantime, the owners are not putting one penny into the house (and may even be stripping it, or destroying it). I have personally seen what 2-3 years of not living in a place can do (my farm). It is unbelievable!!! Even if the foreclosed properties are a bargain, very few “normal buyers” will buy them – most are too busy with their everyday lives to fix up these places. I have a feeling that they will be bought up by investors who will put in a few thousand and flip them for a large profit.
“Sabrina, I also think that foreclosures are not going to be very popular either – simply because most of these properties are going to be in terrible shape.”
Clio- they were 42% of all sales in Chicago in December (foreclosures and short sales.) Doesn’t sound “unpopular” to me!
Short sale lags, delays, trashed foreclosures: continued evidence of the dysfunctionality of the real estate market. This means low sales volume, lower prices and more aggravation.
Clio-
Practically speaking, what does that “profound psychological effect” mean?
“Can’t help but wonder how much of that “population increase” in TX consists of border-jumpers and their dreaded “anchor babies” whose presence cause so many Southwesterners to start shaking in their boots…even as they employ the “increasers” off the books and rejoice in their enhanced Congressional representation.”
http://www.dallasfed.org/research/pubs/fotexas/fotexas_petersen.html
And your sarcasm is a little misplaced. I’m down in Texas all the time and no one ever cares that they have to share their state with Mexicans.
Hey Groove – Chicago mag picked up Edison Park as a best neighborhood.
http://www.chicagomag.com/Chicago-Magazine/April-2010/Edison-Park-20-Best-Towns-and-Neighborhoods-in-Chicago-and-the-Suburbs/
“Hey Groove – Chicago mag picked up Edison Park as a best neighborhood”
best neighborhood to what? to hear airplanes all day? to watch alderman stumble out of emerald isle? to be a republican in chicago? not loose a tire from a pothole on NW HWY? to be laughed at by park ridgeians for being poor?
Short sales and loan mods are just hype intended to keep the debtors paying their hard earned dough to the bankers.
The banks have no incentive to move quickly on a short sale offer if the owner is still paying the mortgage. In the event that the owner has stopped paying, it might still be beneficial to the bank to just proceed with the foreclosure and handle the eventual sale on their own sometime down the road. There is no sense in booking losses too soon in this age of suspended mark to market rules. They can still play pretend, even as the market declines around them. Moral hazard is clearly in play.
I said it before, short sales just ain’t worth it. Either the seller is able to bring cash to closing, or else wait for a foreclosure that is sure to come from them or some other underwater neighbor. I suspect that the UHS will eventually weed out the listings of those without the cash to close. They are dead weight and are contributing to a lack of transaction volume by delaying the correction. The UHS’ babies need new shoes, too.
I can say as an investor I avoid short sales, unless they are already approved by the bank. The idea of having my money locked into a deal for 6 months…. what if something better comes along 1 month down the road. And if the short sale is to good of a deal to begin with the bank likely wont even accept it.
“The idea of having my money locked into a deal for 6 months…. ”
You are never locked in and can always get out unless there is a clause in the contract that states such. Also, you have a statue of limitations right to say that the bank did not act in a timely manner and was negligent with the deal.
You aren’t trapped in a short sale as a buyer. The buyer sets the closing date in the contract so when the bank misses your deadline, you are free to walk.
“you have a statue of limitations right to say that the bank did not act in a timely manner and was negligent with the deal”
Cite, please.
For exact citation I’d have to talk to my RE attorney but when I was putting in bids on short sales, I was told that if they do not act in a timely manner, you MAY be able to state that the bank was negligent based on the statue of limitations and get out of the contract – since it is only a bid, not the final contract.
Additionally, you can change the terms of the agreement too. Let’s say you did not secure financing and was placing bids based on pre-quals (because that is all you need + proof of funds) and then you decided to change banks….
A perfect example is what I did with my foreclosure: property owned though BOA, I put in a 20% down offer financed through BOA (because I thought it would look better) and close in 30 days but then when they accepted, I switched to Wells-Fargo because I got a better rate and lower closing costs as well as close in 45 days. This basically nulified the prior contract to which I had to re-submit a new bid.
“I was told that if they do not act in a timely manner, you MAY be able to state that the bank was negligent based on the statue of limitations and get out of the contract”
I agree with the conclusion (that you can withdraw prior to approval, after a reasonable time), but not the reasoning as stated.
Does the form Short Sale rider actually imply that the purchase contract is effectively a put option for the lender? If so, no buyer should use the standard form.
Anon (tfo) – the basis for this is because they are mulling over your offer, thinking about it, and you aren’t actually in a contract yet. To open escrow, you need a signed contract from both parties too, which would occur after the bank accepted your offer.
Some workarounds are :
a) a contigency clause in the bid
b) the lender to put how many days the seller has to accept
c) HOA documents (recieved in less than 3 days) or if anything you don’t like in the documents can void the bid
“the basis for this is because they are mulling over your offer, thinking about it, and you aren’t actually in a contract yet. ”
I thought we were talking about a short sale, where the seller had accepted your offer, but it was contingent on bank approval?
Much different analysis is you’re talking REO with no contract at all, then you can withdraw at *any* time, for *any* reason, prior to the seller’s acceptance, unless the offer specifically states it is valid until X time.
My trouble is with ascribing the right to revoke the offer to a “statute of limitations”, bank’s “negligence” or both.
I was just citing what happened with my REO…
Regarding the short sale, it was before the bank accepted the offer…kinda like if you went around putting bids on a bunch of properities then bought something, you could pull your bids w/o penalty.
“I thought we were talking about a short sale, where the seller had accepted your offer, but it was contingent on bank approval? ”
This morning, a-fed thought that the bank should spend money on staging the Heritage unit short sale. I don’t think he gets it.
anon(tfo) don’t forget the MAILBOX RULE!
“anon(tfo) don’t forget the MAILBOX RULE!”
If the USPS is negligent in delivering the mail in a timely fashion, can I use the statute of frauds to sue for punitive damages?
Yeah, I’m pretty sure that’s a force majure event in the UCC.
If, and only if, it violates the rule against perpetuities. I’m sure some the gold coast building were a-fed bought his REO has a fertile octogenarian or two.
“Yeah, I’m pretty sure that’s a force majure event in the UCC.”
Wasn’t that Trump’s argument for not paying his construction loan on time?
“This morning, a-fed thought that the bank should spend money on staging the Heritage unit short sale. I don’t think he gets it.”
I thought it was already foreclosed, mis read the post and super hung over from last night.
“If, and only if, it violates the rule against perpetuities. I’m sure some the gold coast building were a-fed bought his REO has a fertile octogenarian or two.”
HD – RN thank you very much.
and if so, two outta eight of em are mine. hehe
that doesn’t give me controlling interest though if someone has three.
“I thought it was already foreclosed, mis read the post and super hung over from last night.”
a-fed, to be clear, I’m not ragging on *you* on this, but if that’s not a mistranslation of what your lawyers are using to explain “why” you can terminate, I think you should get a second opinion for anything with serious risk.
A good attorney, much like a good investor or as in many professions, observes all the various situational scenarios that may arise and evaluates accordingly.
By no means am I stating that this is the correct and the only way out, rather just one of many paths that can be chosen in the event, say, if you are cornered and have tried negotiating with poor results.
(tried to type well for Sonies, coffee in alcohol out)
And rag away if you’d like. Everyone is titled to their opinion.
This is just a blog, and a damn good one if you ask me because it coveres many subjects relevant to Chicago, our country, and much more!
Better yet, this is performed by people of various age, sex, race, religion, finanacial situation, etc… only to be seen by the e n t i r e w o r l d .
“By no means am I stating that this is the correct and the only way out”
And I am telling you that relying on the bank’s “negligence” under the “statute of limitations” is bunk. Not merely not the only way, not a way at all. It’s snake oil, my friend, a tall tale rolled out to impress the ignorant and scare realtors.
well then I thank you for the advice but given the amount of shaddow inventory everyone keeps talking about, I have a feeling you are going to see some interesting situations in the future.
Do you not think that someone who can’t afford a “high class” REO isn’t going to purchase one and realize he/she can’t afford it -during any time in the bid/closing process – and have the contract nulified? OR to somewhat make a joke out of it… foreclose on the foreclosure?
watch what happens when someone put a bid in 1 year ago and the bank accepts it in 2012 after they purchased another place….
“Do you not think that someone who can’t afford a “high class” REO isn’t going to purchase one and realize he/she can’t afford it -during any time in the bid/closing process – and have the contract nulified? OR to somewhat make a joke out of it… foreclose on the foreclosure?”
Sure. All sorts of stuff can happen, and the craziest is probably crazier than anything any of us really expect.
homedelete – your analysis is incomplete without a mention of the Rule in Dumpor’s Case.
“watch what happens when someone put a bid in 1 year ago and the bank accepts it in 2012 after they purchased another place….”
1. Leaving offers hanging out there without formal termination/withdrawal after changing your mind is stupid.
2. Sellers generally can’t get specific performance. And, if there’s no earnest money, it’s hard for them to prove and collect damages. If there is earnest money, see #1, and prepare to have the seller keep it.
“1. Leaving offers hanging out there without formal termination/withdrawal after changing your mind is stupid.”
Please do not think you are above people, everyone makes stupid decisions sometimes, especially when stressed. These are hypothetical situations that just may happen and the arguement that stupidity is an answer is ignorant in itself.
“2. Sellers generally can’t get specific performance. And, if there’s no earnest money, it’s hard for them to prove and collect damages. If there is earnest money, see #1, and prepare to have the seller keep it.”
The first is my point tfo, if there is no earnest money – as there isn’t in many short sales and REO’s – you can get out of the deal. If the bank will not let you out of the deal and it’s many moons down the road, you always have what I mentioned above in your back pocket.
“you always have what I mentioned above in your back pocket.”
“Negligence” and “statute of limitations”? Empty threats and snake oil?
Believe what you want, my friend, just don’t say you weren’t warned.
“Please do not think you are above people, everyone makes stupid decisions sometimes”
When have I ever implied I’ve never done anything stupid–engaging in this particular conversation, for instance, not to mention continuing on with it–but facts is facts and *not* withdrawing outstanding offers is stupid.