It may seem like all the rules of finance have changed, but when it comes to buying a home, experts are advising people to go back to the basics.
"People looking at a home purchase can't look at it so much as an investment as a place to live," said Dean Schwanke, director of the Urban Land Institute's Center for Capital Markets and Finance. "They should be expecting to live in that house quite awhile."
That's because the double-digit annual price appreciations of a decade ago are over for the foreseeable future, according to experts such as Schwanke and local real estate agents.
And, for sellers as well, it's time to get back to basics.
"The problem people have is coming into the reality of what the price should be," said Zeke Morris, operating principal at Keller Williams Realty in Chicago. "If you price it right, people will come. And that's where your Realtor has to do a great job."
A final offer might come in 3 percent or 6 percent less than even a realistic asking price, but that is not much different than what was the case before the housing crisis, Morris said. But some people are getting deeper discounts.
Adam Branham, 35, of Valparaiso, said he had been told it was a buyers market when he went shopping last year for a larger home for his family of five.
"We found it a little lower than what we anticipated for the size home we were looking to move into," he said about asking prices on the more than two dozen homes they were shown. "And that was nice."
When they found the home they wanted and all the dickering was done, about 13 percent was knocked off what had been the original asking price of the four-bedroom, 2 1/2-bathroom home on the north side of Valparaiso.
In areas with a high number of foreclosures, discounts can be even deeper.
On a recent sunny morning, Morris stood in the living room of a three-bedroom home on a pleasant, tree-shaded street in South Holland.
When the home was put on the market in 2008, the family estate owning it set a price of $170,000. But things have changed in ways no one ever imagined. Morris said the owners were coming round to setting a more realistic price of about $60,000.
"They don't want to wait any longer," Morris said. "They want to be out."
The first couple of weeks a home is on the market are the most important, said Herm Hoge, owner and broker at RE/MAX Realty Associates in Munster.
The sellers and their agents should know then whether the price is right.
Hoge's agency is just starting to see the signs of a turnaround, with a home put on the market at $200,000 a few weeks ago getting multiple offers within eight days.
"Here's why," Hoge said. "The Realtor and the seller worked together to price it right, and the home was in good shape."
Hoge and others point out if the asking price is set too high there is a risk the home will remain on the market for months and months with multiple drops in the asking price. Both of those can "taint" a home, and it will get harder, not easier, to sell.
Or homeowners may not want to set a price at all and just sit out the current downturn.
"For most folks, if they owned it for less than 10 years, the best option is to try and hold on until there is some recovery," Morris said.
Buyers should do just the opposite.
Low interest rates, generous supply and falling prices have combined to create fantastic deals for those who have money, a good credit score and the desire to own.
"We are just telling people you will never get these kind of interest rates and prices again," said Minakshi Ghuman, a Realtor with Century 21 Pace Estates in Valparaiso.
Jaime Steinkamp, 29, said low interest rates were a big reason she and Bryan Cogdell, 30, took the plunge into the housing market. Before home shopping in St. John recently, they locked in a rate of 3.79 percent on a fixed-rate loan.
People such as her parents, who can remember double-digit percentage interest rates, just can't believe the rates today. They recently refinanced. She and Cogdell made an offer on a three-bedroom, two-bath home in St. John last week.
"They were telling me jump on it," she said of her parents' advice. "Now is the right time."
More and more people are getting wind of the great deals offered by low prices combined with super low interest rates, said Cynthia Powers, owner and broker at Century 21 Powers Realty in Gary.
People automatically conclude the high proportion of cash sales today are investors buying up properties, sometimes in bulk. But that's no longer the case, Powers said.
"Now it is more and more families assisting their children, brothers, sisters, relations and friends all to take advantage of a market that allows them to buy a home less expensively," she said. "They are pooling the money they have and paying cash."