I’m specifically talking about the Chicago area north shore burbs. It seems like prices have been rising for the past ten years at a slow rate to the point I’m seeing a lot of flipping again. Any opinions, or especially data supported opinions are appreciated. I’m thinking about upgrading my home, and wondering about when/how much to offer.
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Right now nobody knows.
Thats the only real answer.
Yes its possible real estate could drop 10-30%. Probably not too likely that values will plummet that much too soon since we don’t quite have the same kind of unfunded bubble in real estate from during the last recession. But then really nobody knows whats going to happen to the economy in the next 1-12 months.
Fair response, but with the UE claims, and over drop in most business I just don’t see how the numbers add up to support the current prices. One unique factor I didn’t mention in my area (Cook County, IL) was already high property taxes went up 20-30% in the past year or two.
People could and did say that all the time. Housing is more and more expensive.
We do have the CARES act with mortgage forebeance and such that might help prop things up enough.
I don’t know what that would amount to since I don’t know what you think “already high” is.
Is that a $200 increase a year or a $2000 or $20,000 increase? What are we talking here? $500k houses or $5M houses?
Either way I don’t think it should be make or break as far as home affordability. Its just a marginal change. Certainly not anywhere near enough to push real estate values down substantially.
Yes there is definitely less demand currently. But I don’t see this depressing home prices too much. I don’t know the Chicago market but down here, it’s had little impact on asking prices. People are simply weathering the temporarily lower demand. Now if specific markets have had unsustainable appreciation recently, that’s not a trend, just the usual process of some markets getting hot, then cooling down afterwards.
The range I’m looking at is from $300k (remodel needed) to around 800k (turn key). I do know when I just wanted a pre-approval I got told the jumbo market was frozen, which limited loan amounts to $500k. This was on 3/23, so that might not be the case any longer. There are some properties I’ve look at where the property tax creep has been more gradual. Here are some decent examples:
I’m in Oregon, Portland metro. Our prices are similar.
Though I did a spit take when I saw the tax bills. That first $600k house is $21k for taxes. wow.
Really bottom line… nobody really knows what real estate is going to do in the next 1-12 months.
If you’re looking to buy then I’d personally wait a bit and see how things go. If you’re in no rush then theres no harm in waiting a month or so and see if prices start to drop.
Its a bit easier to time the market on the slower moving real estate market.
Yeah, I was super surprised to the pending status on that one. I’m assuming the buyer has a plan for reducing the taxes, or is oblivious to how painful the taxes are.
Is there a difference in the school or municipal boundaries between those two houses?
They have the same mailing address but that doesn’t mean that they’re necessarily in the same city or school boundary. My house is in the unincorporated county and our taxes are 30-50% lower than 1 mile down the road when you cross the county border into the city.
RE price is amazingly sticky. People would rather hold on to a place than sell at a “loss”. This had held true for all past recessions. Transactions would slow down (actually, it all but completely came to a halt lately)…
In other word, I don’t see any major change in price probably until next year, assuming this event triggers a general recession.
Is it crazy to expect a 10-30% drop … probably, yes. Nobody knows where prices are going to go. Anyone who did and could reliably expect it to happen could use that knowledge to become rich.
It might be, I’m assuming they added that second floor and that caused the taxes to double based on the Zillow history.
Didn’t Cook county have a huge jump in real estate taxes a couple of years ago? Or was it the entire state? Something to do with debt or pensions, or ???
The answer is partially, yes. The state, county, and most cities are going to have pension issues.
The most interesting thing over the past few weeks is how much people involved in the process (outside of mortgage companies) want to use transactions from January and February (or earlier) to support current prices. The entire economy has changed since that time, but yet many cite CMAs as supporting facts. I’m thinking reality will take until mid to late summer to hit. However, it seems like areas with a decent amount of inventory are already being hit with necessary price reductions to make a sale.
March data from Realtor.com …
So far inventories have been dropping and prices are mostly still up YoY. Of course this is pretty early still. But Most places didn’t even see much if any change related to COVID until late March and there was still large drops in inventory in most major cities. I’d expect April to be more of the same and maybe even bigger drops in inventory.
I’m expecting a wave of defaults from weak-hands Airbnb’s where I live in New Orleans, depending on how long it takes for tourism to recover. Many of the newcomers paid well above what would be prudent if you were going to rent it to a long-term tenant.
House on my street is up for sale.
It went up on the market 4 days ago. I saw a steady stream of cars coming and going and people going in and out. (Its fun not having anything to do and looking out the window)
They got multiple offers and settled at 5% above asking. WE didn’ thave that kind of booming sellers market before hand. This has been a strong market in our ZIP but not that strong for a couple years or something.
So, its so far so good for our local real estate market at least. The sudden lack of supply has flipped it into a strong sellers market.
I think part of that inventory constraint is basically zero foreclosures. I’ve altered my plan to assume the 4th quarter of 2020 will be at minimum of how long I wait until I make any offers.