The Great Recession is not a good time to be selling a house.
When we purchased our home in Wilmette, Ill., in July 2002 we thought we’d have no problems reselling it because of the desirable neighborhood and great schools. But that was before the credit crisis, Wall Street’s meltdown and the resulting recession – the worst economic climate since the Great Depression.
Because of our planned move to Connecticut, we put the house on the market on Feb. 9.
We priced the house aggressively – or so we thought – but ended up cutting our asking price four times.
We had 44 scheduled showings to possible buyers and held five open houses over five months.
We were willing to sell our house at a loss based on what we had originally paid and the improvements we put into it. But there were no bidders.
Eventually we decided that we couldn’t wait any longer. We put the home up for lease and, snap, we had a renter just like that. We’re leasing the home for two years and hope the housing market will have recovered by then.
Ours is a common story.
Our real estate agent has done 17 home rentals this year on Chicago’s North Shore and just two sales.
The housing market is bad. Lots of lookie-loos but few willing or able to pull the trigger on a sale. One young couple with small children came to look at our four-bedroom, 2.5-bathroom house four or five times, but just couldn’t make a decision whether to buy.
A recent survey by Realtor.com found that more than half of potential homebuyers are staying on the sidelines, according to the Chicago Sun-Times.
The No. 1 reason for the reluctance to buy homes is job insecurity. The poll showed that 31% of potential buyers were worried about losing their jobs, followed by 16% who cited the inability to sell their current home, 15% who cited lack of available financing, and 8% who said they fear home prices will keep dropping.
The good news for the housing market is that the house rentals are taking a lot of homes off the market. As the supply of homes for sale dries up that should stabilize home prices.
Hopefully the housing market will be much improved in two years when we try again to put our home up for sale.
Update: We sold the house in August 2011. The sales price was roughly break even for us, considering the capital improvements we made to the property.