Buyers: Where You Can Find a (Relative) Deal
In keeping with yesterday’s post on buyer’s markets, today we’re going to dive a little deeper into some pockets of the country where a good deal is still possible. Well, a relative good deal.
In a recent report, Chicago, Milwaukee, Cleveland, and New York topped the list of national markets that still might be considered in the buyer’s favor. If you’re a buyer, don’t be too glum. Even if there is less opportunity to score a home at a steal of a price, markets shifting in the sellers’ favor means that home values are rising and likely to stay that way. If you’re a serious home buyer, you may soon find yourself among the ranks of homeowners who want values to go up, so take heart!
Best Bets for Buyers
Looking at our May numbers for percentage of listings purchased below the asking price (less than it was listed for), the top buyers’ markets (that we have data for) are these:
· Long Island, NY – 89.8 percent
· Westchester, NY – 83.4 percent
· Boston (south and the Cape), MA – 81 percent
· Chicago, IL – 76.6 percent
· San Diego, CA – 50.9 percent
But it’s just not enough to look at each of these areas with a sweeping glance. We all know that places like New York have their super-expensive areas and their not-so-great neighborhoods.
To get a little more insight into where the deals are, I took a look at a neighborhood in Boston and one in Chicago.
Cohasset is a charming and very affluent town bordering the Massachusetts Bay. Like any area, there is a mix of home types and prices, but you’ll see many in the million or multi-million dollar range. In the first quarter of 2012, 100 percent of homes for sale sold for below asking!
Over the last year, the lowest quarterly percentage was 87.5, so it’s been a long-standing buyer’s market. Then again, what kind of buyer? Since the average home price is very high, it’s not really that surprising that homes are being sold for below asking.
According to this interactive map, home values are headed up, so those millionaires can relax. So yes, you can get a “deal” if what you’re looking for is an estate perched on the Atlantic.
South Chicago, IL
We now turn to a totally different kind of community where buyers can also get a deal. South Chicago, part of the 60617 area code, has seen a decrease in home values in an area where home prices are already very low.
The average home prices in this urban area hover around $100,000, but a quick survey of homes for sale on ZipRealty.com will show you that plenty are clocking in even under $50,000.
During the first quarter of last year, about half the homes were sold for below asking. From there, the percentage went up until reaching 86.96 percent in the first quarter of this year. Yikes. And if homes prices continue to slide, either sellers are going to have to take the hit, or even more listings will sell for below asking. Then again if you’re looking for a really good deal near Chicago, you may be able to find one in South Chicago.
What’s going on?
As you can see, the price activity for a given metro is highly localized, which is why you need an agent who is plugged in and aware of the local market trends to guide your expectations and decisions.
But what’s going on? Are the high and low-ends of the housing market the least desirable and attainable, so values are not recovering? Are sellers unrealistic about what their homes are worth? All good questions that we’ll continue to probe next week!
Sarah Louise Green lives in the San Francisco Bay Area and writes about national real estate trends, home financing, advice for buyers, and DIY projects for the home and garden. Follow Sarah on Twitter:@slouisegreen