Wall Street Journal: Housing Prices Won’t Rise Anytime Soon
April 29th, 2010 categories: Chicago Info/News, Economic Recovery, For Buyers, For Homeowners, For Sellers
If you’re a home seller waiting for the median sales prices of condominiums and single-family homes to rise in Chicago and the rest of the nation, you might be waiting for a while, at least according to a Wall Street Journal study of the country’s residential real estate market.
The Journal’s most recent quarterly survey of housing-market conditions in 28 metropolitan areas found that inventories of homes for sale remain quite high in many big cities, including in Chicago. At the same time, the number of distressed buyers who face potential foreclosures also remains high in many cities.
This combination is a perfect recipe for keeping housing prices at their current affordable levels. When buyers have many homes from which to choose, they don’t have to overpay to land their dream home. When more homes fall into foreclosure, it tends to drag down the asking prices of other residences in the surrounding neighborhood. After all, it’s not easy to ask $300,000 for a condo when the neighbor’s place, in foreclosure, is selling for $220,000.
While this is bad news for sellers, it’s the opposite for buyers. They can still find high-quality homes in Chicago for prices that are more than fair.
The Wall Street Journal forecast specifically mentions Chicago, saying that our city is similar to places like Charlotte, N.C.; Jacksonville, Fla.; Nashville; and Philadelphia: The supply of homes already on the market is far higher than the national average.
Again, this is good news for buyers. It means that they have plenty of good homes to chose from in Chicago.
The local housing market is in a solid recovery. But the number of sales is increasing faster than is the median sales price of homes. This means that sellers have a choice to make: If they don’t have to sell, they might want to wait a year or more in the hope that housing prices will rise. If they do need to sell, they have to commit to working with their REALTORS® to find the right price for their home in this market.
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