real estate: they’re not making any more of it

Dad always told me

Son, you can always buy real estate and rest easy that it will hold its value. After all, they’re not making any more of it.

Solid advice. Then again, dear old dad probably wasn’t counting on the economy becoming lousy with foreign money that fueled a housing boom and projected housing valuations used to support 115% LTV loans. So it’s no wonder that:

  • contracts for condos and townhomes in downtown Chicago plunged 50% since last year according to the Chicago Business reports – the 7th straight quarter of declining sales, and the biggest quarterly plunge to date
  • sales of downtown condos and townhomes in Chicago fell 29% last year and could drop even further this year
  • according to the Chicago Tribune developers are now looking to real estate auctions as an alternative to a long, slow death on the market – a boon for auction houses (but still few buyers)
  • the property that is moving is selling about about 15% or more below asking price
  • according to the Courier News and the National Association of Realtors, home prices in Illinois held steady in Q1 2007 but sales plummeted more than 14%
  • even prices in sprawling Kane County are down 16.7%, with median selling prices down 3% from last year

So is real estate still the solid investment that dad once supported? In times like this it’s more like a train crash in slow motion. Then again, they’re not making any more of it …

:: Bankruptcy Attorney in Illinois :: M. Hedayat & Associates, P.C. ::

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