Seven Years and a Century Ago in Real Estate

Spring is traditionally the busiest time of the year in real estate.

The most recent report from Standard & Poor’s Case-Shiller home price index indicates Chicago home prices fell another 2.2 percent in February, down 7.6 percent from just a year ago. That’s a stabbing pain for home sellers, but a boon to first-time buyers who have a veritable smorgasbord of choices as they set out on their search.

It wasn’t always like this.

There was a time when you couldn’t buy a house for the price of a BetaMax, when equity wasn’t disappearing faster than a hammer into a lake. A time when sellers had to hire parking attendants to handle the overflow crowds driving in for your open house, and buying new construction meant taking a number and getting in line behind a line of cars 40 deep.

Slap a coat of primer right over the seepage, hang a sheet of drywall right over the hole in the ceiling, set out a few air fresheners and—voila! Sit back and wait for the offers to roll in—and they did. You didn’t need a 401k to retire, all you needed was a mortgage in 60515 or a 60126; heck, pick a number because as long as you own, your home would never decrease in value, ever, ever.

Ladies and gentlemen, I’m setting the way back machine (bonus to you if you know that reference) all the way back to 2004.

Shrek 2 hit the theaters, Martha Stewart went to jail, Janet Jackson had an wardrobe malfunction and Founders Hill Brewing Company was in its last incarnation as a pseudo dance club (awful, didn’t last), and the housing market went absolutely, ridiculously, rocket-out-of-the-crypt ballistic.

The web is flooded with stories about the housing collapse, who knew and who didn’t, who was at fault (Mortgage companies? Lenders? You? Me? Bigfoot?) and who went to jail. But you rarely hear stories about what it was like trying to buy your first home amid the swirling chaos. How no matter how much you stretched your budget, you always seemed 20k short of where you thought you were and two towns over from where you wanted to be. I know, I was there.

It sucked. New construction was sprouting like weeds in towns you’d never heard of  (Montgomery? Oswego? Rohan? Gondor?) and real estate agents were giving dire warnings that if you didn’t stuff 400k in a suitcase and hump the developer's leg and beg—please, please, take my money!—you’d be stewing in that apartment for ever. And you believed them, or at least I did.

Choices? Heck, you were lucky if they threw in a functioning toilet in the asking price. Oh, and about that price: think of it more as a "conversation starter." Don’t even think about wasting anyone’s time with offering the asking price. In fact, if you weren’t prepared for the gut-wrenching drama of engaging in a bidding war with some nameless, faceless "other couple" you were never sure weren’t just a phantom created by the real estate agent, then you just weren’t ready to buy. Move back home with Mom and Dad and leave the house shopping to the grown ups.

Shockingly, our first choice was not Downers Grove, but Elmhurst. Nothing personal, but my wife was working there at the time and the town boasted great schools and an abundance of old, Tudor-style homes—a style we loved.

In fact, we fell in love with the very first house we ever looked at. It was small, and the ceiling heights in the basement were so low the seller removed all the light bulbs so prospective buyers wouldn’t smash their heads. But it oozed charm (arched doorways, original woodwork, a ghost story or two), and it was walking distance from a local pub. Perfect.

We made a fair offer, 90 percent of asking price, top end of our budget, but heck, we were young, foolish, impulsive. So what if it needed major updating? That’s what dads are for. Let’s go for it!

The agent never even returned our call.

The house sold in two days for 5 percent more than asking. We were stunned. Who would be crazy enough to pay more than the price tag on anything? You don’t go into the dealership and haggle up from the sticker price, you don’t pay four bucks a gallon when the sign at the pump says $3.50. Why would you pay more for a house than you had too?

Because you had to. This was 2004. Sanity didn’t apply.

We spent 18 months in a depressive stupor, walking in and out of more open houses than I can recall, trying our best not to notice the half-assed do-it-yourself basement remodels, "professional" landscaping that consisted of a potted magnolia tossed on a patch of yellow grass, or the spongy floorboards on the second floor that suggested impending structural collapse. Didn’t matter. You had 15 minutes to make up your mind and make an offer or this place was going to be snatched up and you can look forward to another weekend spent driving around town and bickering with your wife about the true cost of  "charm."

It was nuts, and it wore you down.

This is a cautionary tale from someone who lived through it—yes, it was that insane. Almost everyone who bought a house between 2004 and 2006 paid too much for it, and you have to live with that every day. Every time the furnace belches smoke, the windows sag and crack, or the poorly installed tiles buckle and pop, you have that moment where you remind yourself: I paid for this, I did this to myself. Me.

Ouch.

Eventually, at a point when we were at our lowest and we had finally arrived at the conclusion that we couldn’t give our money away, we had dinner with some friends who had been living in Downers Grove for several years. We ate at Pizza Capri during Heritage Fest on a beautiful summer night. Walking out onto Main street afterwards, seeing all the neighbors greeting one another by first name, was the first time we asked each other, "screw Elmhurst, what about Downers Grove?"

As it happened, the company my wife worked for transferred to Michigan, and on Mothers Day weekend our agent showed us a home just north of downtown that had just come onto the market. It needed work, but we were defeated.

I was tired of the showings, the snarky sellers, do-it-yourself carpentry, and space pack air conditioners that made the floorboards shake. As we were discussing our offer with the agent, her cell phone rang. We looked out the window and saw a woman in a car stopped in front of the house, calling the listing agent on her cell phone, asking if the property was still available. It had been on the market two days.

Enough. We signed on the dotted line and the house that Messer’s built became our own.

I guess some things happen for a reason. I still live walking distance to a pub.