Brown Earth Cow

2009 on the Chinese calendar is the year of the Brown Earth Cow (AKA Ox). On the calendar of real estate, I call it the year for first time homebuyers. In addition to the $7500 first time homebuyer tax credit, there are so many reasons why this year is a great time to jump into the world of homeownership! Home prices have fallen...and fallen...and fallen. Many homeowners in dire need of moving or selling their home have gone to short sale and sold their homes for less than they owe on the property. There comes a point when people decide that the benefit of moving/selling does not surpass the downfall of selling for a lower price, and they take their home off the market. When that moment hits, supply drops - and when it drops enough, that's when prices stop falling. It's just the law of supply and demand, we learned this in high school people!

Well, here's the pertinent info (based on 3rd quarter 2008 data from the Chicago Association of Realtors) - Seriously, READ IT, even if you don't like numbers -

Of 75 Chicago neighborhoods we have data for, 50 of them now have median home prices LOWER than the same quarter in 2004. Only 25 neighborhoods have a higher median price than they did in 2004.

28 (over one third) of the neighborhoods currently have median home prices lower than the same quarter in 2003.

Only going back to 2001 do we see that all neighborhood's prices are higher now than in that year. 2008's median home price is higher than 2001's prices for all 75 of the neighborhoods.

So this is telling me that we're back down to prices from around 2002...

Looking back at historical interest rates, current 30 year fixed mortgages are about the same level they were in 2002. So that means it is no more or less expensive to buy a home for a certain dollar amount.

So I could actually buy a home for the same price at the same interest rate that I could have 6 years ago? And I don't even need Doc Brown's Delorean for it?

If that doesn't give you a reason to save up 3.5% for a downpayment, what will??

Get more info on this Tuesday Jan 27 at 6pm at the Coldwell Banker office located at 1840 N Clark Street in Lincoln Park. It'll be a really good info session, don't miss!!

(This blog post was edited on 1/10 to reflect an error I found in data pull)