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April 26, 2013

{Chicago Housing Market & The 5 Day Rule}



For Sale. Open House in 5 Days. Pending. Contracted. Open House Cancelled. Sold. Cry.

Status: So here is the jist. We live in a 2BR/2BA loft-like space in River North, over looking the river. It's charming - odd word choice for a modern apartment, but we've made it cozy and warm, and we love it. I don't think we have necessarily outgrown the space - today. But we are on the brink.

Currently Seeking: We know that must-haves are a 3rd bedroom, because one BR will always be an office. We know we NEED outdoor space, to lounge, work, entertain, eat and live. I am the least 'moody' person, but if there is one thing that affects my moods - it's not having enough sunlight and time outdoors. It's a necessity for me, and approaching the warmer months, slowly, we know that grilling out on the 2x4 covered, shaded terrace will not suffice.

Be Grateful for What You Have: The thing is, friends in NY city would kill for the size of this space, the closets, parking spots, 2 bathrooms, open kitchen, washer/dryer. But it's all relative...the city where you dwell, ultimately determines what 'features' you get and what you 'should' be able to live without. I know this from having shared an 800 sq/ft apartment with a friend in NY (that I loved) but lacked closet space big time. And San Francisco - the most charming bright spaces with architectural detail. But dishwashers and parking are luxuries. What is challenging is - once you are ready to 'upgrade' in Chicago, and know that you have a list of must-haves - Chicago properties are going fast. I mean, 1,2,3, gone. The best thing you can do is be grateful for every little thing you have and hold on until the universe says, here is your next house, and you win the quick battle of fighting off strangers in a bidding war.

The Reality: We would have to sell to be in a position to roll our mortgage over, and then when we sell, we are going to be against the wall to find the place we move into next because of timing. It's definitely an interesting scenario, and from speaking with friends in NY, SF etc, it's a similar trend. Houses are going quickly, the one's worth buying anyway. Most recently I saw a 4th floor, 2800 sq/ft home with open plan, 3 BR/3BA, massive outdoor space, beautiful crown molding, formal living room, in Lincoln Park, and I was sold. We showed up at the open house and there were no balloons, no open doors, nothing. I rechecked the address, and sure enough we were in the right spot. So, I called the relator's number and a recording informed me that the property had gone under contract the night before, hence, open house was cancelled. The apartment was on the market for 3 days. Now, since I am of the mind that 'everything happens for a reason' I have moved on, but we've also learned this from the few places that we have seen, they don't stay on the market and we need to be ready to walk in and make an offer. What an interesting/complex dynamic. It's great to sell, but it's tough to buy or rent. And prices are definitely getting higher. My pipe dreams of moving back to CA someday were realistically halted, because when you do the math, it doesn't make sense, we would need to make $1M a year collectively to be able to afford the Bay Area. And I'm working on it, but far from that point today. So, we dream, we scan Redfin and Zillow every day, and we strategize on how to be ready, how to be liquid, and how to play the tough real estate game right now. If I flipped houses, this would be a fantastic time in the market to make a profit. Did I mention that both of us would do that on the side in a heartbeat.

What's Going On: Well, from reports - March 2013 home sales in Chicago were up 16.4% over last year. March also resulted in the highest sales rates in 5 years, bringing us back to 2001/2002/ What else? There is no inventory. Condos and homes that were staying on the marketing for 18 months just a 4 years ago, are now on the market much less. Inventory is down 42% from this time last year, and prices are up 13%. While mortgage rates are low, there is still typically a requirement to put 20% down.

What to Do: Scratching my head. Worker harder and close more deals, stash cash, buy in the burbs, sell now and pack away items in storage until the dream house comes on the market and give a highball offer the moment it hits the market, scan neighborhoods and drop little notes in mailboxes asking politely - "are you moving soon because we'd like to buy your home, thanks". No. It's a balance of these things, a combination of being hyper-focused on what you want and figuring out how to navigate these competitive buying times. It's probably in our best interest to connect with a number of relators who know when properties are 'going' on sale and find out before they are listed. This is no picnic I tell you. Homes in our parents generation were in line with salaries, cost of living and there was a lot more land to buy. Stay tuned for more trials and tribulations friends. My learning will be your gain.

{image via Chicago Mag}

1 comment:

koenigstrey said...

Thanks for your blog. I just landed up in your blog and I really appreciate your blog.

Chicago Real Estate