Why Housing Hasn’t Hit a Bottom: Investors Still Betting

I’ve written several times about a foreclosed house in suburban Downers Grove, Illinois (a western suburb of Chicago.)

Here are the facts:

1710 Maple Avenue, Downers Grove:

Originally listed for $979,000 in 2005
Was foreclosed and then bank-owned
Reduced to $712,900 by August 2007
Reduced again to $682,900 in September 2007
Down to $644,000 in November 2007

In February 2008 it was listed at $618,900 with no buyer in sight.

Well- it FINALLY found a buyer in March 2008.

But, lo and behold, it is back on the market! An investor is apparently trying to make a quick buck.

Thanks to reader JDW who just wrote in with an update:

I just had to post an update because this is too hysterical!

This house finally sold in March, 2008 for $540K. Quite a drop from the original price, huh? Well, if that’s not classic enough, we watched the house getting a “freshening” and thought a family was making it their own. Well, to my surprise the house came back on the market today for $769K!! Wow… For an increase of $230K in 7 months they must have built an addition or something, right? HAH. Nope… The listing lets us know exactly what they did:

“Beautiful Remodeled Kitchen With Granite Tops, Stainless Appliances And Huge Butcherblock Island. Freshly Painted.”

Yeppers, it’s a “put in granite and stainless” and make 200K flipper. If that isn’t flippin’ ridiculous in this market, I don’t know what is! Let’s see how long it takes to sell it this time!

There are no pictures (yet) with the listing but I’ll post them when they come on-line to see what the “remodel” really looks like.

Housing Hasn’t Hit a Bottom Yet
This is yet another indication that we are far from a bottom in housing. There is no fear as clearly someone thinks they can make some quick money here. And maybe they will. We’ll have to see (though listing it with only 2 weeks until November in the Chicago area is never a good idea.)

At the bottom of a crash, people are terrified to buy a declining asset. I don’t see much terror in housing. I see some people fearful but I know plenty of people buying real estate and many more who would buy if only the banks weren’t being so tight and requiring a downpayment.

I hear about more people who want to buy real estate than want to buy stocks right now.

That tells you all you need to know.

No one is scared enough. The housing downturn will continue until the fear outweighs the greed.

But right now, there’s plenty of greed.

Thanks for the update JDW. I appreciate it. The story of this house continues to be interesting.