Buyers really have it good in today’s market. In some cases, too good. I have found in several circumstances that the extreme number of homes on the market right now is causing an interesting problem. The wide selection of choices available is causing some buyers to get “burnt out” of house hunting.

The problem begins with the buyers trying to see every home available in a certain market range. While this sounds like a pretty good strategy if you’re buying a home, consider that depending on the area and price range, a search of all homes available could yield hundreds of homes in the initial search with between 5 and 10 new homes appearing for sale every day. At first, buyers feel like kids in the candy store, but soon realize that going through hundreds of homes takes a lot of time and energy. Unfortunately this has caused many buyers to just give up on hunting altogether in frustration.

Back when we were at the crest of the housing wave and homes were selling rapidly, seeing every home out there made sense - there was less selection and buyers needed to often make quick choices. This made a “larger to smaller” approach to home searching make sense - there was a much smaller pool. In today’s market where there is an extreme housing glut, a “smaller to larger” approach makes more sense.

Buyers have to shift gears and be more selective in the initial searches. There are many great homes to choose from so chances are, you’ll be able to find exactly the home you’re looking for - it pays to be really picky in the beginning. If you don’t find what you’re looking for at first, then widen the search. Just remember a couple ground rules: the good homes still go fast even in today’s market. If you spend a week going through all your choices, by the end of that week, some of the best ones on your list will be gone. It’s better to start with a smaller list and add to it if you don’t find what you’re looking for. Also, don’t be afraid to go ahead and make an offer if a home you see fits your picture. I’ve worked with buyers that found the perfect home but wanted to continue to look and see “what else is out there” only to find that 3 days later, another buyer bought their perfect home while they were out looking at dogs. DONT LET THIS BE YOU!

Finally, it’s very important that you work closely with your REALTOR and be specific about your search requirements. If you’d only buy a home with a basement, it doesn’t make sense to see homes without one. If you’re thinking of looking for a home to buy this year, I’d love to talk to you about how I can make the search process easier. Just give me a call and I’d be happy to meet with you: 630-346-1041.

I’ve seen a lot of folks predicting a lot of things about the housing market. First, know that real estate is local. Market conditions in other parts of the country will change differently than our area. I feel it’s impossible to “peg” the market in general as far as what’s going to happen. However, in our area, I see a lot of optimism for this year. Let’s take a look at the factors:

There hasn’t been a lot of market activity over the past couple years. Buyers have been waiting for a good deal. Foreclosures are moving briskly but there’s an ever-plentiful supply. This has made it difficult to impossible for existing home owners to move. This pressure has created pent-up demand in the market.

Mortgage rates are extremely low right now. Close to the levels they were back in 2005 before Greenspan messed them all up. Lenders have tightened restrictions but those that can buy will be getting a good deal on loan rates.

There is increasing national attention being put on the housing crisis and the extreme number of foreclosures. The government may be stepping in at some point this year to stem the tide of foreclosures. Once the foreclosures slow, values will begin to rise.

Rentals are now getting harder to find and rent prices are rising. Rent prices are now getting higher than the cost of owning a condo or single-family home. This increases the number of buyers in the market as renters decide it’s better to buy than pay more in rent.

We’re now entering the spring market - a naturally busy time. This should reduce inventory as buyers begin to take up the slack. If the number of foreclosures begins to slow, we’re going to see a further reduction in inventory for the fall. This points to the possibility of an uptick in the market beginning this fall. I predict conditions will remain flat during the spring and summer as the existing inventory begins to be eaten up by buyer demand but this fall we should see a slightly better market.

What does this mean for home buyers? If you haven’t yet entered the housing market, now is the time. You want to buy when the market is at or close to bottom - not after it has started to recover. If you’re looking for the point at where there’s the biggest inventory at the lowest prices, put yourself in the position to purchase this spring and summer.

The foreclosure “crisis” we’re experiencing now (up 57% in some areas from 2007 levels) is affecting everyone - not just the homeowners who’s lives and credit are turned upside down by this unfortunate experience. If everyone knew how much this situation is affecting everyone, there might be more impetous to solve things. Here’s a quick breakdown of how the current situation is affecting YOU:

As homes go under foreclosure and banks take possession of the homes, they are eventually listed on the market at 20-30% under market value. Because of the limited number of buyers right now, this might mean that out of 20 homes in a subdivision currently on the market 3-4 might be foreclosures priced at 20-30% under the others. These mostly aren’t homes that are “torn up” in the traditional foreclosure sense - these are often homes in good condition. For a buyer that sees two homes that are very similar but one is priced 20-30% lower, the choice is obvious. What this means for homeowners trying to sell homes is that they’re forced to compete with the foreclosures and drop prices or not sell. This drops market values in an area as sellers have to constantly compete with a continuous stream of foreclosures. The homeowners pay for this crisis with dropping home values.

For buyers, purchasing a foreclosure at 20-30% under market value sounds like a sure thing. However, many buyers that haven’t contacted a loan officer in a while might be suprised to find that they can no longer qualify for a loan. Due to tightening restrictions on income ratios, credit scores and downpayment requirements, many buyers who want to buy and may be capable of affording a home will not be able to get a loan. Also, for the buyers that can get a loan, banks are borrowing money from the federal government at a greatly reduced rate (everyone’s been hearing about the dropping fed funds rate) and then turning around and lending that money to buyes at higher rates (rates have stayed the same or slightly risen while the fed funds rates has dropped) in order to generate more income on the loans being writted and to offset the losses taken by the increased number of foreclosures. The buyers pay for this crisis with tightened restrictions on loans and higher interest rates.

Of course, the most highly impacted party in a foreclosure is the homeowner being foreclosed upon. Not only do they have to endure a severe lifestyle change, but credit scores will be greatly damaged by a judgement of foreclosure. This means that they will be unable to buy for the foreseeable future (especially with increasingly-tightening lending restrictions). All of the foreclosures and buyers unwilling to commit to a purchase have driven up rental prices and made rentals hard to find. This compounds the problem by forcing families that have been foreclosed upon to pay more for a place to live.

This foreclosure “crisis” we’re currently experiencing has a ripple effect that touches everyone - no matter who you are. If you don’t feel it now, you soon will as your home value drops or rent goes up. It’s time for everyone to take responsibility for this mess and make the right moves to get these homeowners some help or otherwise reduce the rate of foreclosure for everyone’s sake.

With the passing of the first day of spring on March 21st as well as the completion of Easter Weekend, the spring market is officially here. Things are looking promising with a lot of activity in the early weeks of March so there are a lot of things to be optimistic about. Interest rates are again low (5.6% at one point last week), home values are at a low point, pent up demand is there, economic stimulus checks are in the mail, tax returns are comming and the government seems honestly concerned about the foreclosure rate - to the point of taking action to reduce it. All of these factors point positive and if you haven’t started to hear rumblings in the media about a possible recovery in 2008, you soon will.

If you’re entering the market this year - whether to buy or sell - this next couple weeks you have to start thinking about how to prepare. Sellers - get those homes freshened up and get them on the market to take advantage of the early activity. Buyers - start contacting your local real estate professional (630 - 346 - 1041) for advice on how to start the process. 2008 should be a defining year for the real estate market as well as the economy - you need to be aware of what’s going on at all times and your local real estate professional is the key to helping you understand the market and how to come out ahead.

Looking back on the July market, we experienced a further slowdown from 2006 levels of nearly 10%. The lower price ranges continue to sell fairly well and condos and townhomes seem to be fairly active. However, many lenders are reporting much of the sales activity going on right now is in the first-time homebuyer segment of the buying population. Usually a slow month in the industry due to lots of family vacations going on and the increased gas prices of summer, July 2007 was no exception to this. Towards the end of the month we started to see an uptick in activity. Many of us that have been doing open houses have seen some increased numbers of buyers out looking and flyers are starting to evaporate from brochure boxes around the area. This points to a likely resurgence comming in August, September and October.

 The other factor is that we’re seeing an increase of homes comming on the market this fall. This is bad news for sellers who have been waiting, some for months, for a contract. As inventory increases, it will likely absorb some of the upswing in buyer activity we’ll see this fall. The net result will be that we won’t see a significant reduction of inventory likely until the winter months. If you are a seller in this market, my advice to you is to get your home looking sharp and price it well these next few months and plan on pushing forward with a sale before winter hits. For buyers during the next few months, expect to continue to see great prices and exceptional selection.

After a less-than-stellar spring market through May, the real estate community didn’t have a lot of positive expectations for June. The beginning of the month definately didn’t give us anything to cheer about - sales were flat in all price ranges and it seemed that the only buyers out looking were first time homebuyers. The move-up market was absolutely flat in June.

Towards the end of the month, we started seeing some sunlight poking through the clouds and we saw sales start to pick up. Activity seemed to remain strong through the end of June leading into July. This is exactly opposite of what we would expect going into the weeks preceeding 4th of July - many families choose the end of June and beginning of July to travel and sales usually slow up. In a year where nothing has been normal so far, this is just another indication that activity continues to be tough to predict. Inventory remains extremely high due to the lack of activity in June. We’re starting to see some reduction as sales pick up a bit and some of the early spring listings begin to expire and go off of the market.

This past Monday I had the pleasure of attending the regional Century 21 convention out at Navy Pier in the Grand Ballroom. It was a great day and I got to spend some time with some of my fellow real estate agents from our office as well as the other 8 Pro-Team offices. We took the Metra in from Aurora and took a short but nail-biting cab ride down to the pier to get there. We got there just in time to hear the current president of Century 21 do a talk about corporate branding and the company vision for the next few years. Afterwards, the vice president of marketing did a talk about some of our new advertising campaigns and we got to see a few of the new commercials that will be comming out this summer.

Afterwards, we got a fairly spartan box lunch but eating it out at the end of the pier on a nice sunny day made it a great experience. A group of vendors were also open during lunch so I got to talk a bit with the representative from Top Producer (who seemed a little defensive about some of my “suggestions” about the features they offer). I also spoke with a rep offering website design services. I was asking about a custom IDX solution and think I confused him a bit as to what I wanted. Oh well. I also had a nice talk with the folks from Spot Runner.

After lunch, we had the pleasure of hearing a talk by Jim Dross, a former top agent for the Century 21 system worldwide. He had some very insightful things to say about the market and how to generate business, especially in a down market. I’m in the process of incorporating many of his ideas into my own business plan and expect to see some good results.

 All in all, a great day, lots of good informaiton and lots of fun spent with my fellow Century 21 real estate agents.

But are those lookers window-shopping, or are they buyers? Lately, I’ve held several open houses for clients of mine and have had fairly good turn-outs. I consider 5 visitors a good turn-out and I’ve met or exceeded that goal in the past 3 weeks. This is likely due to several factors - the warm, sunny weather, the spring market and the income tax returns that people are just starting to get back. However, I have noticed that many of these open house visitors are, shall we say, rather unmotivated to move. I’ve had lots of window-shopping but not as many serious buyers come through my doors. This leads to the question - are many buyers still holding their collective breaths? As a real estate professional, I don’t quite understand why if that is the case. Interest rates are great and there is still a very wide selection, so why the apparent hesitation? Yes, appreciation has slowed and will remain a bit down over the next few years, but owning a home is still considered a great investment. Hopefully in the weeks to come, as schools get out, more of these window shoppes will leap off of the fence and into buying mode.

Despite the spring season, traditionally a hot time for sellers, it remains a buyers market in the Fox Valley. One of the biggest trends in Aurora real estate and Naperville real estate right now is the large amount of inventory for sale right now. Basically, there are much more homes for sale than buyers. This is perhaps not due to the fact that there are significantly less buyers now than in previous years (excepting 2006) but we also have a lot of long-term inventory on the market. These are the homes that were originally put on the market in 2006 and are either continuing to be listed or have been put back on the market after being removed over the winter season. The end result is that there are more homes to go around, more selection for buyers and the end doesn’t look like it’s in sight. This is great news for buyers - the selection continues to be great along with falling prices and interest rates are actually going down this summer from levels that are already considered good. If you are a buyer in this market, you can expect to get a good deal on a home. However, it’s important to also be realistic. There are a lot of buyers out there that have dreams of getting a great home at 20% under market values. While getting a great deal on a home is a definate possibility, buyers have to remain reasonable and understand that except in extreme cases, most sellers are not going to give a home away. However, if the buyers remain savvy and get good advice from their REALTOR, getting a great deal is almost assured.