<<September 2013>> Newsletter
What Does the Real Estate Market Have in Store?
The real estate market has seen a fantastic year so far - home prices are going up and mortgage rates reached historic lows. In June, both Illinois and the Chicagoland market experienced double-digit gains in sales of 20.8 percent, the largest year-over-year increase in median prices since 2008.
This rapid change has been essential in the recovery of the real estate market, but it has also sparked worry over whether or not this will lead to another housing bubble.
According to Jed Kolko, Trulia's chief economist, rising mortgage rates and the expected increase in inventory will slow price gains and keep the market out of bubble territory. The boost in prices we are seeing now is an overcorrection to bring the market back to historic norms. Home prices are predicted to level out in 2014, with an average appreciation in the Chicago area market of 4.2 percent.
Inventory continues to be an issue for potential homebuyers, hitting a 12-year low at the beginning of 2013. As of June, the local market had enough housing inventory to last 3.5 months. (That means if there were no new listings coming to the market, we would run out of homes in 3.5 months.) There are several factors that are contributing to the lack of inventory, but one of the most prominent is the number of housing starts.
Housing starts is the number of new residential construction projects during a particular period, including multi-family and single-family residences. The 50-year national average is 1.5 million housing starts a year, but in 2009 this number plummeted to less than 500,000 units nationally. New construction is recovering, but it has a long way to go before it catches up to demand. It's when supply begins to meet that demand that we'll see home prices level out.
The local market has seen so much change this year, and there is more on the way. Kolko predicts that prices will continue to rise, helping homeowners get back above water and prompting sellers to decide to take advantage of price appreciation. This will start to boost inventory beginning this fall.
If you're considering buying or selling, it's essential to have your own expert on hand to help you decide what is best for you in your local market. Please feel free to contact me if you'd like to discuss your options.
Mobilize Your Home Search
BairdWarner.com lets you take your property explorations with you to your favorite neighborhoods and towns. The website is completely mobile-ready, offering a multi-dimensional opportunity to find homes for sale, open houses and new listings exactly where you want to live. There is no app to download as it works through your mobile phone's GPS. Please contact me to find out how to utilize this unique tool.
Visit My Website
Experience. Innovation. Integrity.
© 2013 Baird & Warner Real Estate, South Suburban | 3236 Vollmer Olympia Fields, IL 60461
If you no longer wish to receive these emails, please reply to this message with "Unsubscribe" in the subject line or simply click on the following link:
Baird & Warner 120 S. LaSalle St., 20th Floor Chicago, IL 60603 USA