Call it a wave of price cuts or a market adjustment, but there is no way to mask the fact that people selling residential real estate locally have been dropping their asking prices in droves. Deal Estate combed through data from the Multiple Listing Service of Northern Illinois and found that one out of three single-family homes sold in the Chicago area so far this month were bought only after the initial asking price dropped at least once.
Solid data for comparisons to past years is not available, but several real-estate agents who have made sales this month agree that price cuts are unusually common right now. “What’s happening is that people who priced their homes in early spring are coming down now anywhere from 5 to 10 percent,” says Mary Duncan, the sales manager at Prudential Elite Realtors in Naperville. Last week, the sale closed on a Naperville house that Duncan had initially listed in early spring for $470,000, then cut to $450,000 and again to $445,000, before selling it for $432,000.
Duncan says that those higher springtime asking prices-hers and others-were predicated on estimates that the market would perk up as the weather warmed. That hasn’t happened, and so sellers keep revising their prices downward. “You have to get the fluff out of the price, and then it sells,” says Carol McGregor, a Barrington Realty Company agent who cut the asking price on a 13-room home in Barrington Hills from $1,374,900 to $1,250,000 before sellling it this month for $1,070,0000.
After a sluggish 2006 and a (thus far) slow-moving 2007, how much fluff is there? “We’re back at 2005 prices again,” says Arlene Fields, a Baird & Warner agent in Lake Zurich. In the past few weeks, Fields has recommended that the sellers of two different properties ask approximately the same as the homes were likely worth two years ago. One home belongs to a couple that transferred here two years ago; now, having been transferred once again, they are essentially asking what they paid for the place back then. The second residence is a newly constructed house that has a twin next door, which sold, in 2005, for $299,900. After listing the newer house last fall at $334,900, Fields has dropped the asking price-to $299,900.