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Realtor sees no gloom and doom
By Deborah Donovan | Daily Herald Staff

Andy Starck, chief executive officer of Starck Realty, says buyers can find good value in the housing market.

 

Daniel White | Staff Photographer

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Published: 12/14/2007 12:29 AM

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Andy Starck thinks it's time to bust some real estate myths.

Starck is chief executive officer of Palatine-based Starck Realtors and has been in the industry in the suburbs almost 40 years. Here's the way he sees things.

• Home prices might have dropped a little, but not precipitously.

• Anyone who buys a home now has little chance of suffering a loss.

• Sellers are becoming realistic and are dropping their asking prices.

• Buyers are not going to "steal" homes.

• Mortgages are available.

While trying to sell a house for a quick profit in a year or so would be a real gamble in this market, anyone who thinks they will be in a home for a few years should go ahead and buy, Starck said.

"There are values out there," he said. "Be smart, find them. Let your Realtor help you find them. Be smart about basics like location."

In the Chicago area, home prices have generally enjoyed steady appreciation of between 3 percent to 5 percent a year over the last 30 years, he said.

The wide price swings experienced on the East and West coasts have not been felt here.

Starck offers all the usual reasons: The economy is broad based and expanding, Chicago is a transportation hub and there isn't enough housing for the continuing demand.

"It is not that Chicago is bulletproof, but we do have an overall lack of housing stock over time, and our economy is diverse and pretty healthy overall," Starck said.

Interest rates on 30-year fixed-rate mortgages are just under 6 percent, according to Freddie Mac, an organization in the secondary market that buys mortgages from lending institutions.

A report that Starck leans on is from the Office of Federal Housing Enterprise Oversight.

The agency said its indexes show home prices have dropped nationally for the first time in 13 years.

Prices decreased almost a half-percent from the third to the fourth quarter.

In the Chicago area, Starck said prices took a very small dip when the third quarter is compared with the second.

However, Illinois' home prices have continued to appreciate slightly.

Home prices in the state have increased almost four times their 1980 rates without a negative quarter, according to the agency.

This index uses homes that have been sold or refinanced and considers only so-called conforming loans, which means that high-priced houses are not included. A conforming mortgage is currently limited to $417,000.

Buyers should look at a home as shelter that is a good investment, not as a pure investment, Starck said.

It is impossible to say a real estate crash will never occur in Chicago, but the historical record is good, he said.

In fact, from 1979 to 1982, there were some price reversals in the Chicago area, with brief decreases of 3 percent to 5 percent, Starck said.

He hopes that sales have bottomed out and said buyers showed more interest in October than September. The market traditionally slows during the winter holidays.

Sellers are not going to take crazy offers, he said.

Starck has seen offers $250,000 below the asking price on a $500,000 home.

"It's just not going to happen," he said. "Sellers are not desperate. They are reasonable and want to sell their homes and move on to the next ones."

Starck said it is important to realize that what people say about the real estate market could be true in one area like Florida, but might not apply to Chicago.

"It's a great time to get a good value," he said. "And there are plenty of them and you can get the house you want. Three years ago, you had to take what was available and had to move real fast."

And Starck's last bit of advice:

Don't follow the crowd. It's better to buy when prices are lower and not everyone else is in the market.