No sense kidding ourselves– Parts of the American economy are getting hammered. The auto industry is cutting production and laying off workers. Real estate sales are up from a year ago, but not across the board; some parts of the country are still seeing declining market values. And no one is sure the end is yet in sight.
Chicago is not immune from these market forces. Real estate sales have surely slowed; and some anxious sellers are reducing asking prices. But it’s not really clear that it’s about price. Price reductions alone aren’t bringing back the buyers. What’s needed is a change in the discourse, a redefinition of just what’s going on.
Maybe it’s time to start ‘thinking outside the box’. What’s working in today’s market? (And what is not?). Traditional real estate sales protocols – list a property, put it on the realtor tour, list it on the MLS, have an open house – don’t seem enough to get the job done today. Not when last year’s buyers are now fearfully holding to the sidelines, waiting for some “expert” to confirm the market has indeed “bottomed out”.
But isn’t it interesting– For most prospective buyers, nothing really has changed much. They’re at the same job they’ve held for some time now, and it’s likely not in manufacturing, the sector most threatened today. They’ve got the same FICO credit scores today that did or did not support their interest in home ownership a year ago. And, yes, it is still cheaper to own than to rent.
So, what to do? Best bet is to “follow the opportunity”. In my recent e-book* I suggest that real estate agents jump at this opportunity to invest and deal in this historic glut of foreclosures. Savvy investors have been active now for months, buying as fast as they can. Prospective home owners, too, should hook up with real estate pro’s. qualified to guide them through buying and fixing up a deeply discounted home. (Talk about “instant equity”!) Those who wait will pay “full price” 18 months from now, an opportunity lost.
The American Dream has always been equal parts Opportunity and Vision. That dream is hardly threatened by today’s disruptions, difficult as they are. The dream is simply redefined, repositioned. Those who recognize this new and transient reality will prosper.
– Philip Elmes
*Hitch Hiker’s Guide to Real Estate & Rehab / Entrepreneurship in A Changing Market ©2008.