Excellent advice, if you can get your bank to write a financing letter without an accepted P+S

Depends completely upon where you are. Some haven't bottomed out yet, others have, and still others never experienced a bubble or a burst at all.

The reason I do not believe that the housing market has bottomed is that the tax credits have been distorting the market.

I would take the 1999-2000 value and add about 25%. I think that will be bottom. I am more looking at the California market than the market in IL. I'd need to look at those charts. This is assuming that the correction is similar to those in the past 2 or 3 cycles. It should undershoot the inflation rate a bit then come back up, after stagnating for a while.

I'm an agent in Illinois and I don't feel we've hit bottom yet. But I know nothing about Kendall County. I believe we're headed into deep trouble. I house near me just went under contract for $81K. It was a dump but that's 1980's prices not 90's or 2000's. Another example here in 60016 is a 4000sq ft McMansion, brand new but 75% finished for $210K. That one's been sitting on the market. When we do finally hit bottom, I doubt prices will rise at anything better than 2.5% per year if that.

+1

hows that go? ... "My Realtor tells me that now is a GREAT time to Buy." :D

One simple truth remains - housing can NOT cost more than people can afford. (at least not for long) In the past, money was Sooo easy to rent (home loans) that no-doc loans to lettuce-pickers would be no problem.

The recent (massive) run-up in price was at, not only full employment, but at a self-propagating inflationary time. Now we have deflationary times and high unemployment.

Many people want to sell but hold off until "the market returns'... and as soon a bit of the current inventory moves, people think "the market has returned' . . .and the market gets re-flooded again.

The short of it is, you have to know the true supply and demand for your area.

I have similar experiences in western TN. Once strong, growing suburban areas are wilting. The expiration of the homebuyer credit, restrictive but safe lending requirements, high unemployment, and fear have taken a toll on home sales this summer. How those factors would lead to one believing we are at the bottom is beyond my feeble mind.

That's why I ask that Soukus think about this one long and hard. Forget what it once was worth or what it might be worth in the near future.

The fact you are looking at this for the long-term helps, but I'd be more apt to underbid than bid near asking. Also, figure out what you need to do to build another house on the acreage. Do you need to subdivide the lot? Can you build an in-law wing? What will your septic system support?

Souk, if you feel confident negotiating an offer, go to the listing agent. However, a competent, intelligent realtor may help you get a better deal. Trick is finding a competent RE agent.

I wouldn't give a second thought to making an offer while the sellers have another offer. If you're really smooth, you'll ignore the other offer. Do what's best for you. If it happens, it happens.

BTW, I hope you don't have a lot of grass to cut. I thought a big house on 7 acres would be awesome, but cutting 6 acres of grass gets old really quick. If you can turn some land into pasture, more or less, you could cut down on your work tremendously.
jurgen

most importantly
So do ya think there is room for a MX/ SX track buddy o'l pal ?

My 2 cents .If you are going to sell your existing house .Remember it is way down as well. The delta may not be much for the move on paper. Be prepared to dump your existing house or own 2 houses.

The wife and I have been looking at our options and trying to determine the best course of action. I spoke with an appraiser and got some good information. I also spoke with a Frat buddy who id a lending manager at a large bank who financed our current home and he too gave me some good information and advice. The comments here have also been very helpful and I appreciate it. It's like multiple heads making arguments toward a good decision!

We are also looking at other property in the area that have 2+'acres. The market here has been hit pretty hard because it's the most western developments (far west of Chicago). There are multiple developments that have been abandon and all that's left are unused streets and survey stakes.

There are also plenty of foreclosed homes that are listed 50-100K+ less than the last selling price from a few years ago. A house that would have sold for 500k can be had for had for 300K+.

I think if thing get worst it will be another 5-10%. Then the pickings start to get slim. Maybe. There are a lot of factors. I'm comparing my price points to foreclosed properties and bank owned properties which I think are near bottom, such that it becomes what a reasonable buyer will pay.

Anyhow, the large property in question is an estate sale and fully owned by the estate so it hasn't changed hands in probably 20 years. The agent agent thinks the current contract will play out, but I have my doubts. We're going to see it tomorrow and I'll feel out the situ. Then we'll see, but we're not set on it.

We're also looking at another property that is in a secluded location with dense trees around it, but plenty of room for a shop and guest house on 2 acres. It has been on the market for 6 months and the price has dropped 60K. I think it can probably be had for less than 350K which when compared to buying another home near our current home will put us ahead of the game.

It seems the feeling is mixed and the feed back from across the country is that some are just about bottomed out, but some have a little ways to go. I think I'm very near the bottom.

The opportunity cost of our situation is also a factor in pricing. Although it won't push us into making an offer, I think were at a point where we don't stand to lose a lot while still having some options that meet our requirements.

So the question I have to answer for myself is, "do I gamble on losing 20-50K in the short term, or risk not finding the ideal place to grow our family for the next 20 yrs and maybe retire in the same place."'

I figure the market will stall or dip slightly in the next 6 months here, so I have time. Yet if the ideal place is available and the price is acceptable to us, we may make an offer.

Lockhart - there is already a trail for dirt bikes on the large property and our boys are eager to get muddy, but were not getting their hopes up. :)

We have considered this an are willing to own two while renting out on or letting my parents live in the current house until we can sell it or until we have the other property situated.

I don't think we will lose money here as we bought right before the boom and have the means to sit on the property.

Wow, a lot of good comments here. Here's my take, FWIW:

The comments regarding the land quantity, zoning, etc. are dead-on-the-money. More land is not necessarily always better. As one of my investment friends likes to say, what will kill you is not the up-front stuff, but the recurring, down-the-road stuff. You need to think long-term - same logic applies here. Yeah it's nice bragging rights to say "I have 15 acres" but are you really going to maintain all that - or pay someone to? If not, what good is it other than maybe a buffer against some development that will likely never occur next door? Something to think about.

Also, the comments regarding local zoning are spot-on. Local governments are bizarre to put it nicely and in my experiences "small town" planners can be the absolute worst of the worst (and this is coming from a licensed architect who has dealt with a number of them). Some are great, but I've dealt with some who had real high-and-mighty attitudes and clearly were in it for the power trip. Use caution and assume nothing.

The comment about the market being at the bottom - that was funny. I needed a good laugh, thanks for that.

While I believe that we're certainly a lot closer to the bottom than we were one or two years ago that isn't really saying too much and as someone else above said, it really depends on your market. Generally speaking though, prices and rates aren't going anywhere anytime soon. What's the hurry? This is an "L" bottom, not a "U" or "V". Prices generally are going to drop/slide a bit more and then bob along the bottom for the foreseeable future (15-20 year time horizon) with no appreciable movement.

One of the biggest mistakes manufacturers/producers can potentially make in a situation like this - and I definitely am seeing it happen with respect to construction (particularly residential) - is to overcompensate for the classic mistake of pulling back too hard when things go south. In other words, the conventional pattern is for people to freak out when things get bad, slam on the brakes, lay off a ton of staff and leave themselves unable to match resurgent demand because supply capacity is so diminished when things start turning around. This time around it really seems like too many folks are aware of this potential pitfall and are trying to out-think it by saying "I'm going to stay the course so that when come back I'll be properly positioned and able to take advantage while all my competitors aren't". Of course the million-dollar question that's related to this phenomenon is whether a sufficient critical mass of supply producers are adopting this approach when it comes to construction that they're really not pulling back on supply capacity at all, which in turn will only suppress any blips in demand and even worse, potentially not reduce supply at all, resulting in pricing remaining way out of whack due to oversupply for a long time.

My own opinion (and again this is coming from a professional in the field) is that in a lot of areas, it absolutely is happening. I see it significantly more in residential than commercial (perhaps because the carrying costs and barriers to entry are lower than specialized commercial and institutional type construction) but regardless, it's very real and there are a lot of guys out there refusing to adequately pull back, which is only making them hemorrhage more and (probably) hasten their own demise.

A lot of contractors and builders (particularly in residential) are so unwilling to accept reality and are still clinging to fanciful delusions that things are poised for an imminent "bounce-back" that they're hanging onto their equipment, licenses, certifications, etc (which represent a significant carrying cost) and even personnel in the hope of a turnaround because they don't want to "get caught" unable to provide services if/when it happens. Because of this, they've got all the supply-producing infrastructure in place to produce many times what the current demand levels are justifying and the reality is it just ain't there - and how many of them can really stomach having all that stuff (and people) sitting idle? Very few. So some are building anyway just to keep occupied (even though there's no demand) and adding to the supply-side mess. Of course this kind of works to your advantage if you're in a builder-targeted market, since the excess supply will only help depress prices further...

Add to this the fact that these guys are taking a bigger loss than they'd be by cutting their equipment and personnel overhead and walking away. This "strategy of denial" will ultimately only make their pain worse - unless by some stroke of magic the 1% scenario happens, there's a resurgence in construction demand and they're poised to make that killing (in which case they'll look like absolute geniuses) but I just don't see it happening. There's over a 12-month inventory for residential construction right now and that's based on historical demand levels. Real demand levels are far lower, meaning in reality there's a backlog of probably 18-24 months of unsold stuff on the market right now, and that's not even factoring in shadow inventory that's being held back by banks.

For every one that gets lucky with this strategy (because of isolated market or niche dynamics or whatever), there will be a thousand that get creamed. They're not good odds to play. Nobody likes to see people closing up shop, laying people off, etc. but in construction it's the smart play right now. If you're an unlucky builder but have brains, you've done this already or are doing it. If you're an unlucky builder with no brains and/or a big ego, you're one of the ones I'm describing - and there are a surprising number of them. The reality is this is a HUGE downturn we're witnessing (the biggest in history) and demand isn't meaningfully going to come back for a very, very long time except in very isolated niche areas. Sell the pickup, hang up the miter saw and put away the hard hat and call it quits and go do something else - seriously - unless you're one of the lucky ones that actually has work (not promises of work, but actual work - with cash backing it up) in the pipeline.

That's where I think we are.

Finally (my $0.02) - do not EVER, EVER, EVER get into one of those "dual agency" relationships. They are inherently unethical and it's mind-boggling to me that some states even still allow it due to the obvious and irreconcilable conflict of interests. Get your own buyer's agent if you feel you even need an agent at all. The reality is in a lot of cases you don't and can act as your own, and cut the seller's agent's commission in half and put it in your pocket. That's your closing costs right in your pocket, right off the top, simply by not allowing yourself to buy into stupid convention that ultimately will net you nothing. Ask the question - if this person is representing the seller, is it really worth "X" thousand dollars for them to do NOTHING else other than say "oh sure, I'll represent you too and fill out some boiler plate forms for ya'"? Answer: NO. There is absolutely no change in the dynamic whatsoever when an agent flips from a "sellers agent" to a "dual agent". None. They still only get paid if the deal closes and in this market it's a hell of a lot better deal for them to put 3% in their pocket than 0%. There's an old saying in the markets - bulls make money, bears make money and pigs get slaughtered. An agent holding out for 6% right now for doing nothing is frankly being a pig - and you shouldn't pay it.

Best of luck.

The one thing that blows my mind about the economy right now is how cheap long term money is. If you are going to look at it from a simple 'net worth' standpoint, you may take a hit. If you are getting 30 year money in the low 4's it makes a huge difference from a cash-flow perspective.

I know what you mean.

Is there any timber on the property?

Ag zone so if you lived around here the maint. issue for the land is solved - you'd call up rent-a-goat every2-3 years and they would take care of the land

I also would compare it to a 911 -- might be hard to sell as the market is small, but the real idea is to enjoy the ownership (i.e. living there)

you really want the property? you really want the area?

then get it

the indoor pool could be turned into a wine cellar; rumpus room, etc.

Souk, I live on 9 acres in rural farm country with a pond, a 40 year old house, a 50 x 100 building and a 2500' grass runway. I drive 37 miles to work in the city and the nearest decent sized town w/ fast food and an Autozone is 15 miles away. My wife and I would never consider moving. Life is good when you don't have neighbors or city ordinances to keep you from enjoying your home any d@mn way you want to.

Let me see....... interest rates @ 4.3% for 30 years ........ houses selling for 25% + under asking or at buyer offer.... no you more knowledgeable (obviously some sort of uber-economists) are right ..... still more room for housing to drop..........

Best info/advise of the thread thus far IMO. The worst info/advise comes from the MSM IMO. They would have you believe the sky is falling everywhere.

When determining your course of action (buy/hold/sell) what info/trends are you going by? Current inventory? Average DOM? Average sales price? Average $/sf? Percentage of distressed inventory (short-sales, NODs & REOs)? Number of units sold? List price vs. sales price?

And at what time-frame? The last 3 months/6 months/ 1 year+? Are you using stats for your State? Your County? Your City? Your target subdivision? What about all of those same stats @ different price points?

The "bottom" of any RE market is a moving target in more than one dimension.

T'sM - no timber that can be sold.

Ideally I'd want the natural growth to act as a buffer and provide privacy. There are homes on 3 sides of the property with an upscale development behind it.

My parents are gardeners and they pretty much garden 50% of their current yard. The are from the old country and I would not be surprised if we end up gardening and raising chckens if we were to buy this property. A lot if it is currently trees and natural growth with trails. There's even a small orchard. The wife has always wanted her own cherry and apple orchard. So the extra acres wouldn't be so bad and if we decide to just let it grow it would be fine with me. There are areas around the house and barn that are grass the wouldn't consume my afternoon to mow.

Anyhow, we saw the house and barn today and the place is better than expected. The previous owner was a car guy. They still have a Model T or sometime like it in there. A BMW Isatteta (?doesn't come to mine right now the model exactly). A bunch of motorcycles and a Cosmopolitan modped or something that's still in the shipping crate from 40 or so years ago!

We've involved our friend and real estate agent and we're looking at other properties in the area that may be comparable. Because the place is under contract anything can happen. We're going to see a 10 acre place that also has a barn (but not as big or nice), and the property is more "developed." It's a little further away, but priced 100K less.

Because we intend to retire at such a place the rules of the game is a little different then if we were just buying a bigger house. With 6 kids we would love the bigger space and 5 of the 6 are boys. I think we'll get plenty of use from such a place. I'll have plenty of help to care for a place, and if the kids want to live in the area when they have a family we'll parcel off some land for them to build a house on.

But while the kids are growing up, I see a large property as a potential outdoors playland for them with dirt bikes and ATV's. Of course having a large barn for all my vehicles... A car guy's dream. Even with a second garage on our current property I am wishing for more space.

Even if I were to pay extra or lose a 100K for such a place, that would be fine for my situation 10-30 years from now. How much does one place upon the luxury of space and privacy for our kids to have a place to roam around on during their childhood? We would be just fine living where we are now, but if you'll recall my "boat versus a vacation home"'thread, I think a large place with acres to roam on would be like being on vacation year round with dirtbikes, snow mobiles and other outdoor activities.

I've always been one to put a lot of emphasis on opportunity cost since my Economic class with Dr. Gottlieb my freshman year in college. Growing up my parents never really vacationed, and I never got to do things that I think my kids will enjoy doing on such a property, so the opportunity to provide those experiences for them holds a lot of value for me. The idea off walking down the hill to our own .5-1.0 acre fishing pond with my young kids has a lot of appeal to which I can't put price upon. It's things like that which makes we willing to gamble on the place holding value in the near future. I can play it safe for the next 30 years and retire with plenty of money to travel the world many times over, but the kids will be busy with their lives and more times then not it'll just be my wife and me. Sure it'd still be enjoyable, but the opportunity to play with the kids on our own little outdoors playground will have passed.

As posted above, money is cheap now, and property prices cheaper than it will be in 10, 20 or 30 years.

When you can think of several generations living there over many, many years it all averages out. And it sounds like a beautiful place for kids to grow up and learn some rural farmer type common sense.

(We have had a place for more than 100yrs and expect many more generations to do the same.)