We’ve been hearing for so long now that it’s a hot seller’s market, but if you’re in the industry, you likely felt the change around mid-May or at least the end of the month. I spoke with an appraiser the other day, and they felt the change too. If your home wasn’t on the market by May, you may have missed the peak, but that doesn’t mean it’s all over;it just means the intensity is slowing down some. Buyers are getting a bit more time to think, they aren’t having to make split-second decisions, and they aren’t competing with as many other buyers as they were.
Nationally, our median price is currently $350,000, but in the Chicagoland area and a little south of that, it’s $262,500. A lot is going on in our market; it’s still a wonderful time to jump into it. We likely have another month before the market changes again because we’re moving toward having the more typical market that we saw before the pandemic.
If you have questions about our market or would like to know the median price in your area or town, I’d be glad to help you....
Back in April 2019, there were over 47,000 properties for sale on our MLS. In April 2020, we still had over 40,000 properties for sale. At the end of April 2021, however, there were under 20,000 properties for sale on the MLS. Inventory is down over 50% in just one year.
This market is being driven by this lack of inventory. Prices continue to rise as demand for homes remains high. When is this going to change?
"Take advantage of this extreme demand by selling now."
If I had a crystal ball, I’d tell you. However, we’re keeping a very close eye on things as we head toward the end of the foreclosure and eviction moratorium. I predict that we’ll see some more inventory hit the market at this point and things will get a little better for buyers. As inventory expands, the market will change.
If you’re a seller, this means that now is probably the best time for you to sell. Don't expect...
If you’ve been keeping an eye on the real estate market, you’re probably aware that interest rates have gone up by 1% since last month. What does that mean for you? To keep it simple, if you were pre-approved to buy a house a month ago at $300,000, today you would only be approved for $270,000.
The general rule of thumb is that a 1% increase in the interest rate decreases your buying power by about 10%. This affects home sellers, too. Their pool of buyers shrinks as rates go up, and housing values will go down as well.
We could absolutely see a change in this market due to an increase in rates, so we’ll make sure to keep an eye on it for you moving forward.
If you have any questions for us about interest rates or real estate in general, don’t hesitate to reach out via phone or email today. I look forward to hearing from you soon.
Posted by Dan Bennett on Wednesday, July 24, 2019 at 7:00 AMBy Dan Bennett / July 24, 2019Comment
Shifting trends and industry-leading research are pointing toward some valuable projections about the status of the housing market for the rest of the year.
If you’re thinking of buying or selling, or if you just want to know what experts are saying is on the horizon, here are the top three things to put on your radar as we head into the coming months:
Home prices are appreciating at a more normal rate: Home prices have been appreciating for about ten years now. Experts at the Home Price Expectation Survey, Mortgage Bankers Association, Freddie Mac, and Fannie Mae are forecasting continued growth throughout the next year, although it should be leveling-off to normal appreciation (3.6%), as we move into 2020.
Interest rates are low: Over the past 30 years, the average mortgage rate in the United States has been 8.27%, and rates even peaked as high as 18% in the 1980s. Today, at 3.81%, the rate is considerably lower than the...
Posted by Dan Bennett on Wednesday, June 12, 2019 at 7:00 AMBy Dan Bennett / June 12, 2019Comment
A lot is happening in the world, and it’s having a direct impact on the housing market. The reality is this: some of it is positive and some of it may be negative. Some we just don’t know yet.
The following three areas of the housing market are critical to understand: interest rates, building materials, and the outlook for an economic slowdown.
1. Interest Rates
One of the most important things to consider when buying a home is the interest rate you will be charged to borrow the money. In our recent post we posed the question, “Are Low Interest Rates Here To Stay?” The latest information from Freddie Mac makes it appear they are. We are currently at a 21-month low in interest rates....
Posted by Dan Bennett on Monday, May 13, 2019 at 7:00 AMBy Dan Bennett / May 13, 2019Comment
The housing crisis is finally in the rear-view mirror as the real estate market moves down the road to a complete recovery. Home values are up and distressed sales (foreclosures and short sales) have fallen to their lowest point in years. The market will continue to strengthen in 2019.
However, there is one thing that may cause the industry to tap the brakes: a lack of housing inventory! Buyer demand naturally increases during the summer months, but supply has not kept up.
Here are the thoughts of a few industry experts on the subject:
Posted by Dan Bennett on Thursday, May 9, 2019 at 7:00 AMBy Dan Bennett / May 9, 2019Comment
Recently, we reported that many believe a recession could happen within the next two years. We explained that 70% of economists and market analysts surveyed last year believe that a recession will occur in 2019 or 2020 and that 42% of consumers currently looking to purchase a home also agree that a recession will occur this year or next.
However, the U.S. economy has performed well in the first quarter of 2019 and that has caused some experts to change their thinking on an impending economic slowdown.
Posted by Dan Bennett on Thursday, April 11, 2019 at 7:00 AMBy Dan Bennett / April 11, 2019Comment
The percentage of home price appreciation on a year-over-year basis has decreased each month for over a year. The question was how far annual appreciation would fall. It seems we may now have the answer.
In a recent post on the National Association of Realtors’Economists’ Outlook Blog, it was revealed that Realtors are starting to sense that home values are beginning to stabilize and that we may see appreciation beginning to accelerate again:
“About 3,000 REALTORS® who responded to NAR’s February 2019 REALTORS Confidence Index Survey had more optimistic— although modest— home price growth expectations over the next 12 months. Respondents expect home prices to typically increase by 1.9 percent nationally, up from 1.4 percent in the January survey.”
The thinking that home appreciation has bottomed-out was also confirmed in two additional housing reports recently released:
Posted by Dan Bennett on Thursday, April 4, 2019 at 7:00 AMBy Dan Bennett / April 4, 2019Comment
The Housing Market has been a hot-topic in the news lately. Depending on which media outlet you watch, it can start to be a bit confusing to understand what’s really going on with interest rates and home prices!
The best way to show what’s really going on in today’s real estate market is to go straight to the data! We put together the following three graphs along with a quote from Chief Economists that have their finger on the pulse of what each graph illustrates.
“The real estate market is thawing in response to the sustained decline in mortgage rates and rebound in consumer confidence – two of the most important drivers of home sales. Rising sales demand coupled with more inventory than previous spring seasons suggests that the housing market is in the early stages of regaining momentum.” - Sam Khater, Chief Economist at Freddie Mac
The news recently has been all over the place. Some are talking about a market shift, and others are suggesting the markets are moving, so let me explain to you what’s actually going on in the Chicagoland area.
Ultimately, it depends on the price range of the property: Homes in the lower price range typically still operate within a seller’s market. The higher the price range, the more likely they are to operate in a buyer’s market.
In fact, in the last week, I have been inside properties in an area where they have 1.5 years' worth of inventory—that is a lot. I’ve also been in areas where they have only two months' worth of inventory.
Posted by Dan Bennett on Thursday, January 24, 2019 at 7:00 AMBy Dan Bennett / January 24, 2019Comment
Whether you are thinking of selling your house or buying a home, today’s real estate headlines can be confusing – perhaps even concerning. What is actually happening with mortgage rates? Are home values dropping or are they just rising at a slower pace? What impact will the economy have on the housing market?
If you are either a buyer or seller (or both), you need to know what it will mean to your family if you go ahead with the move. You need to understand three things:
1. What is happening in the housing market right now?
Consumers must get past those fear-mongering headlines and gain a deep understanding of what is truly happening. How strong is buyer demand right now? How much competition do listings have today compared to what they will have in the spring? People want to make an educated decision on what is probably their family’s greatest financial asset.
2. Why is it happening?
Understanding the individual pieces that impact the sale or purchase of real estate is important. Understanding how those pieces impact each other is critical. How does the amount of a down payment impact the mortgage rate a buyer will be offered? Can you still price your house a ‘little ahead’ of the market and still be sure it will sell?
We must be getting near the end of the year now that the first big snow of the year has hit. I just wanted to give you a quick market update to let you know what’s going on in real estate around this time of year.
Many people think that the market is pretty dormant during this time of year, but we actually have seen 152 properties go under contract in the Chicagoland area in the past seven days. At the same time, a little over 2,500 homes have come off the market and only 1,472 new homes have come on the market.
With these numbers, you can see why this time of year is actually a great opportunity to sell your home. There is a decrease in inventory, which can help you find a buyer. Once we see that first snowfall, and with the holidays around the corner, many people decide to take their homes off the market. This means that it’s a great time for you to prepare to get your home on the market.
New listings jumped 8% year-over-year nationally, the largest increase since 2013
Total listings in the 45 largest markets are now up 6% on average over last year
This increase in housing inventory has sparked two different reactions. Some are saying this is the first sign of a potential collapse while others are saying it is a welcomed reprieve from the lack of inventory that has stalled the market recently. As Zelman & Associates reported in a recent ‘Z Report’:
“With the rate of home price appreciation starting to decelerate alongside the uptick in inventory, we expect significant debate whether this is a bullish or bearish sign.”
Is this a sign the market might crash?
There are those who look at the increase in inventory as a sign that we are returning to the market we saw last decade. However, a closer look shows that we are nowhere near the levels of inventory we reached before the crash in 2008.
After several years of continuous price gains, the real estate market seems to be reaching its price cap.
In June, the last month for which we have complete numbers, 14% of all listings saw a price cut. That's up from a low of 11.7% at the end of 2016.
Several other statistics support the idea of an emerging buyer’s market.
In the same month, housing demand fell 9.6%, the largest decline in over two years.
Unsurprisingly, the number of people requesting home tours has fallen by 6.1%. Mortgage applications to purchase a home has decreased as well.
A few things are at play here. One is rising mortgage rates, which have been steadily climbing for much of this year. Another is an overall decrease in affordability, resulting from a combination of the growth in home prices and mortgage rates.
There’s another important thing I should point out: If this is the start of a buyer's market, it's unlikely to be just a momentary blip.
One sign of this is that homebuilder sentiment has recently fallen to the lowest point in almost a year. In other words, homebuilders are losing...