Real
Estate 2008 Recap -
What Happened...
What
didn't, you say! Home prices went down, our economy went south,
short-sales and foreclosures became household words, and mortgages
became harder and harder to come by.
Now,
we definitely want to keep in perspective that the Midwest has
gained equity in homes more slowly than many parts of the country,
so we aren't losing 40% value or more (as some areas have) on
our homes, but we've obviously been affected in some part just
as the entire market has.
How
did Lake County do this year?
Well,
Lake County didn't fare too badly. Statistics show that overall,
Lake County values are down by about 10.3%. Different communities
fared differently…Grayslake home values increased 2.31%,
Vernon Hills was only down by 2.07%, Libertyville was only down
by 6.22% while other areas such as Gurnee and Mundelein were
down by a little over 10%. It's not pretty, but it is not the
worst…especially compared with the rest of the market.
I
think one thing that is most concerning is how banks are dealing
with foreclosures and short sales. It seems that, even though
they both are becoming more and more prevalent, precautions
to keep the home (an asset to the bank) are not yet being realized.
Many
times, a homeowner leaves a home because they are frightened
of foreclosure. The utilities go off, the pipes burst because
the gas was turned off and it was winter, and the home's value
goes down considerably due to water damage, mold, and other
complications. This brings a home's value down even further,
and affects all of our home values.
If
you would like a complete look at how your neighborhood/subdivision
has done this year and last, you'll definitely want to sign
up on this site for MARKET WATCH. Market Watch allows you to
enter your home's address, and receive from me listings of homes
that sell/have sold in your area that will have a bearing on
what your home is worth.
Click
HERE to sign up for this, and please
know your e-mail address is not shared.
Now,
the short-sales and foreclosures have affected us in different
ways than just having them exist. When a buyer can purchase
homes for significantly under market value, it certainly is
tempting to do so, especially if you are just a little bit handy
(or the value is so good, you don't have to worry about being
handy…you can hire someone in to do the work).
When
the buyers in the market are out looking for "the deal,"
a home that is priced at "market value" ultimately
looks overpriced, because these other homes are sometimes priced
quite low. The more of these homes that are available (as a
short-sale or foreclosure), the more inventory a buyer has to
choose from, and the less likely they are to want to buy a home
at a "real price."
Honestly,
there are 4000+ square foot homes available in Lake County communities
that can be purchased for $250,000 as a foreclosure, needing
only cosmetic work. It does make it harder for the "average
seller" to then sell.
What
is the solution for sellers in this market?
Tap
into the second category of buyer that is in the market…the
ones who don't want or can't "afford" a foreclosure.
This buyer doesn't have extra money to spend, doesn't have the
skills or the desire to fix a home and wants a home that is
move-in ready. What that means is this…you want to be the
"shiny penny" of homes in your price range (and you
want to be sure not to overprice).
Your home should show perfectly (not cluttered, painted properly,
upgraded nicely, etc.) and allow the buyer to feel that they
just have to move their furniture in, and that's it! I am always
available, even if you're not thinking of selling at the moment,
to walk through your home and provide advice on how to make
your home into that shiny penny! Please always feel free to
call or e-mail me with questions.
So,
what is in store for 2009?
I'd
love to be able to say that 2009 be the start of the upswing,
but right now, there are too many issues with the economy to
safely say that we can solve these problems short-term. If ever
there was a good look at how trickle down works, it's happening
right now in all situations.
If
loans are harder to get, buyers can't buy, and therefore sellers
cannot sell. In many cases, this leads to foreclosures and short-sales,
because some sellers simply have to sell. Banks lose money on
these sales, and people lose jobs. The more people that lose
their jobs, the more short-sales and foreclosures we see, and
the lower home prices have the potential to go.
The
good news in this is that ALL EYES are focused on the economy
right now. Not a single American isn't concerned about the future
of our economy. The world is focused on us. The government is
focused on fixing it to the best of their ability. There is
talk of lowering the interest rate for first-time buyers and
there is talk of helping people stay in their homes.
Though
I would guess the majority of us aren't enthused about handing
out money (especially to those heads of companies that make
more in a year than many make in a lifetime), other thoughts
of how many thousands of innocent, hard-working people would
lose their jobs helps us reconsider what we might be able to
do to help.
In
short, I believe 2009 will be a turning point, and lead to an
upswing either toward the end of the year, or for next year.
Are
there opportunities in all of this?
Without
a doubt…yes!!
With
foreclosures on the rise, many very good people (some who have
lost jobs and therefore lost their homes) are out there needing
a home to live in. And, with homes that can be purchased for
a lower price, there are great opportunities for the "average
person" to buy investment property, provide a rental home
for a family, and in turn, have a great investment for themselves
by having their mortgage paid by someone else, and having a
great property to sell when the market does turn around.
I
just purchased my 4th investment property this year with a rental
partner, at a cost where the rent easily covers the mortgage,
and found an excellent couple with 800+ credit scores to rent
for almost 2 years. If you have a little equity in your home
and are interested in learning about investment property, please
don't hesitate to contact me.
I
don't mean to sound cliché, but there truly has not ever
been a better time to purchase with low home prices coupled
with low interest rates. I promise you an answer that is all
information, and no sales. I've built my business and clientele
on trust, and promise the same to you!
For
more information on short-sales and foreclosures, please follow
the links below (to understand more about the terms and what
they mean). If you know anyone who may need to sell their home
with either of these circumstances, please know that my brother
and I are extremely experienced, and have a highly experienced
team of lenders and attorneys that provide help every step of
the way.
Click
here for the definition of a Short Sale
Click
here for the definition of a Foreclosure
If
you are interested in information specific to your real estate
needs, please feel free to e-mail me at: Kelly@IWantANiceRealtor.com.
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