Home is Where the Hurt Is


Inquiring minds are reading the Chicago Sun Times article about the hurt this housing market is causing a particular homeseller where after 2 years, this Evanston owner gave up and cut her price 37%:

Stuck — that’s how Yvonne Smith felt as she tried unsuccessfully for more than two years to sell her Evanston home.

She recently agreed to an offer that’s roughly 37 percent below her initial asking price, joining many other sellers who’ve had to revamp their expectations in what remains an ailing housing market here.

The history of her Napoleonic retreat from her personal Moscow:

Smith first listed her 2,300- square-foot, three-bedroom, three-and-a-half bath town house, which features a deck off the kitchen and a full basement, for $625,000. She said that mirrored what comparable homes in Evanston were selling for a year earlier.

She lowered her price to $525,000 last year. Given that the town house next to hers had sold roughly five years earlier for $509,000 and factoring in that the market was weaker, she felt that was reasonable.

“I didn’t even get an offer at that price,” she said.

So she dropped the price of the home, which she bought for $320,000 in 1994, to $455,000, but still found no takers. She signed a contract earlier this month to sell for under $400,000, with plans to close in October.

“I was firm about how low I was willing to go. I guess I’ve changed my view,” Smith said. In this market, “The buyer really does set the price. If you are firm, that means you’re waiting. You’re not going to sell right now. You’re going to have to wait until the market comes to what you think it should sell for. I was tired of waiting. I’m really ready to go.”

The general stats are stunning to read:

A report from the Illinois Association of Realtors on Tuesday showed the end of federal tax credits and a continuing weak economy pushed home sales in the Chicago metropolitan area down 25.1 percent in July from a year earlier. And major market improvements aren’t forecast soon.

The median price sank 9.6 percent to $193,000 from $213,500, the report showed.

In Chicago, sales fell 19.5 percent to 1,589, and the median price plummeted 19.8 percent to $196,500.

(…)

Major improvements in the market aren’t around the corner, according to Geoffrey Hewings, director of the University of Illinois’ Regional Economics Applications Laboratory. He expects double-digit declines in sales in the Chicago metropolitan area in the months ahead. “We’re looking at somewhere between 13 and 20 percent declines year over year, August through October,” he said.

He expects median prices to fall in the 4 to 8 percent range, reaching around $180,000 in October, down from $190,000 in October 2009.

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