Even in a good market, things start to slow down once the school season has begun. Most families with school-age children have already moved into their new homes. There are certainly buyers looking for properties throughout the year, but in Chicago, Illinois and surrounding suburbs as the weather cools off, so does the real estate market. Funny thing is, this “selling season” is similar in warmer weather areas such as Arizona.

Add to that the very slow year 2008 has bestowed on the industry and only the lucky sellers (and those priced below market price) will be able to sell their homes with the high market inventory and lack of ready, willing and able buyers.

Buyers Still Have A Great Choice

Because it is still a buyer’s market with a lot of inventory to choose from, buyers remain in the driver’s seat. Many buyers have multiple homes they’re interested in and can walk away from negotiations with their first choice if they don’t feel the sellers are coming down enough.

Are We at the Bottom?

Unfortunately, I don’t have a crystal ball to answer that question. I read a lot about the real estate industry and I’ve heard anywhere from things will start to level out and recover next year after the election to the speculation that we haven’t seen the bottom yet and prices might continue to plummet for years to come (I’ve read up to 5 years down the road before we recover).

It is difficult to hedge the market to make the decision to wait to buy in case prices continue to drop or to get in a property now (with plans on staying for awhile) and accept whatever happens. My husband and I are planning on buying a condo in Arizona for future retirement and we planned on going out there this winter to buy. Sometimes I think we should wait until next year but we plan on holding on to the condo for many years so the idea that maybe prices will come down a little more is not something we want to take a chance on.

I’d be mad at myself if prices go up next year and I could have purchased for less this year. The election could very well change things for the better and instill a higher degree of confidence. I don’t want to take that chance.

If the condo we purchase isn’t worth next year as much as we paid for it I’ll be less angry since I know by the time we’re ready to sell it this will all be history and in the long-term prices will go back up, especially in Arizona as baby boomers continue purchasing retirement properties in popular areas.

Should Sellers List Now or Wait Until Next Year

That depends on your situation and motivation. If you need to sell because you’re being transferred there isn’t much choice or reason to wait. You simply need to face the facts and price your property correctly. That means it must offer the most in its price range. If you don’t have updates like a similar home at your price then you need to compensate for what is lacking by reducing price.

If you’re not really motivated to sell you can certainly list your home but you still have to price it correctly. If you don’t you’re just letting strangers in your house and will be helping to sell the other homes that are priced correctly. Why would you want to do this for any length of time?

Also, you risk being labeled a stagnant or problem listing. Buyers ask us how long a home has been on the market. When they hear long market times they figure something is wrong with the home. I usually have to explain that the problem is most likely too high of an asking price with many price reductions along the way. But long market times still give a negative impression on buyers.

So if you don’t really have to sell then I suggest you wait it out. However, if you price correctly and are moving up, then you’ll be ahead of the game since the higher priced home will take a larger reduction (dollar wise) than you will ultimately have to selling a lower priced property.

What Are Real Estate Agents Doing in this Slow Market

For those that are still in the business (many agents have left nationwide), a lot are simply planning their strategies for next year. Many don’t want to take yet another listing that will possibly sit on the market over the fall, winter and into next spring. Agents are getting very picky about taking overpriced listings. I have had to walk away from a few.

Personally, I am taking business that comes to me. But I am not doing the marketing for new business that I do during our more robust selling season. I am working on upgrading my websites and getting my marketing materials lined up for next year. And I’m continually marketing my current listings and keeping my sellers informed of today’s slow market and for those listings that have not yet sold, I’m trying to convince these sellers that they need to keep reducing price until we get some offers.

We can market a property to every single advertising source available but if a home isn’t priced correctly for the current market it will not sell.

If you are still thinking of buying and/or selling this year give me a call at 708-536-8200. Check all active listings in the MLS. Buyers - save time by having listings sent directly to your e-mail by using my Automated Home Finder Form. Sellers - Feel free to fill out my Internet Market Analysis form.

2007 was a record year for me.  2008 hasn’t even been close.  I didn’t expect things to be this slow but it’s simply the story of supply and demand.  There is so much inventory available that buyers are overwhelmed.  They want to see everything to be sure they’re not passing by on a property that might be perfect for them.  Some of them are returning to the perfect property only to find out it has been sold. 

For many buyers they have a handful of “perfect” properties to choose from and they must make a decision on which one is truly the best for them.  Bottom line is that there are many homes priced right that are still being bypassed because of the amount of homes available for sale.

Think about it this way; a buyer loves 3 homes.  They each have good floor plans and are priced correctly.  They are updated nicely or they’re simply the cream of the crop in their price range.  If it’s a couple purchasing maybe one likes one home and the other one likes another home better.  They have to sit down and discuss which of the homes fit best with their lifestyle and budget.  They will only buy one of these homes so the others simply become runner-ups.

I have some of these runner-ups.  One of my listings is beautiful and I’d buy it if I were looking.  But would I?  If I were out comparing it to other available homes in the price range would this be my first choice?  In fact, there is a feature which could be an amenity to some and a detriment to others.  It is still beautiful, is in an excellent location, has been reduced around $40,000 and still sits.  In fact, we had offers in the beginning but at the time the sellers would not accept such low offers and their buyers still had to sell their homes and they weren’t even on the market yet.  So there has been interest but the timing and buyer’s situations weren’t right.  Now we’re at the end of our better selling season and no offers are coming in even with price reductions.

I have a Tinley Park property for sale that is also priced under the CMA value that is also sitting.  It is getting showings and most of the feedback is positive and mention that the buyers are still considering it.  But no offers and we’re on our 2nd price reduction.  This home is on a big beautiful lot that will appeal to many but might turn off some people that don’t want the upkeep.  It is very well maintained but has some original fixtures and decor.  We have talked about the sellers redoing at least one of the dated items to see if the investment pays off.

I also have a gorgeous Tinley Park townhouse for sale that is spacious and shows wonderfully but it is located next to a commercial property and the last appointment was cancelled when the buyers arrived and didn’t even want to go in because they didn’t like the location.  These sellers have taken their first price reduction.

I have many more listings and I have sold a lot of them but as the market slows down further it’s going to be even more difficult to sell.  There is still too much inventory for a small group of buyers.

To prove this point, I gave a Comparative Market Analysis for a Berwyn home and the seller was very unhappy to see that she would not get what she needs to sell.  She will most likely reluctantly continue to rent it out and look for a new tenant.  As an example, in a $25,000 price range there were over 100 properties up for sale in Berwyn.  Do you think there are 100 buyers right now looking in that price range?  I don’t think so. 

Let’s say there are 25 buyers looking in that price range right now.  That means even if they each purchased a property this month (which will not happen because that’s not the rate of buyers purchasing in one month in Berwyn) there will still be 75 homes left!  Think about that fact.  That’s a lot of homes still sitting on the market and having 25 buyers purchasing in that price range in one month is fiction.  It isn’t happening.  The true figure is probably 5-10 buyers.  Which means 90-95 homes still remain on the market, and that’s only if no other homes get listed.

The example above should explain the crisis sellers are facing now.  And it really comes down to price.  Your home doesn’t need to be completely updated as long as it’s the best home in its price range.  Buyers will let the seller know if that’s the case by writing up an offer to purchase.  If you’ve been at a certain price with no offers then you need to consider reducing price at intervals until you do receive an offer.  Marketing can only do so much to get your property out there, you have to make sure it is priced correctly with the help of your agent.