I have a suburban client contemplating a cr0ss-country move, and like everyone else who bought 2-5 years ago, he’ll be taking a loss on his home. In negotiating his relocation package, he contemplated how this loss would compare to what he’ll gain by buying in his new city.
Did home prices decline as much there as they had here? (And, of course my mind jumped to — did suburban home prices decline as much as in the city of Chicago?)
The conversation started with “median sales price” but quickly moved to “what kind of home would you buy?” It means little to him (or to you, I trust) to discuss anybody’s or any-old-place’s median price. The decline of median price 2007 to median price 2009 is somewhat interesting, but isn’t it more appropriate to discuss numbers based on the home you actually bought or would buy?
What kind of home would you live in? For purposes of this study, I looked at
- Four to Five Bedroom homes
- 3-4 Baths
- 10- years or newer
- Move-in Condition
When placed in that context…
… a 4 bedroom Naperville home has declined from $ 670,000 to $ 540,000 (2007-2009) – a 19.1% decline in home values.
… a 4 bedroom Wilmette home declined from $ 933,200 to $ 767,000 (2007-2009) – a 17.8% decline.
So how much have Lakeview home prices declined between 2007 and 2009?
A 4-5 Bedroom, 3-5 bath, 2 car garage home sold in 2007 for $ 1,248,750… and it sold for $ 1,150,000 in 2009 — only a 7.9% decline.
While no one wants to see home values decline, it’s heartening to know that city home values are relatively stable.
By the way — this client is looking to buy in a city where 4 bedroom home prices are down 40.3% — he’ll actually be doing fine.
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