The fall market in Chicago this year has been much stronger than in past years. Prices are continuing to rise, with third quarter home prices posting double digit increases, which is a first since the height of the housing bubble. While this is great news for most sellers, these rising prices, along with strong demand from institutional investors and other cash buyers, is causing short sales to become less favorable to lenders. Look to see less short sales available and a harder time getting approved for a short sale if you’re a seller. On the foreclosure front, foreclosures remain well below year ago levels.
The great news for current homeowners is that over 38,000 (yep, you read that right: 38,000) homes in the city of Chicago which were previously under water are, thanks to rising home values, going to be at or above market value by this spring. That means that many people who couldn’t sell in the past few years are now going to be able to sell their homes. This is great news for buyers as it means more inventory to choose from this spring and, hopefully, less multiple offer situations in the future. For sellers, it’s good and bad. If your home value has already regained any losses it incurred during the housing bubble burst and you’re thinking of selling it in 2014, I’d encourage you to put your home on the market in early 2014 (Jan – March) before the spring selling season hits as by that time, the market might be inundated with homes. While it’s true that there are less buyers in the winter, there will also be a lot less competition for you in terms of selling your home. For home buyers whose home values decreased significantly during the bubble bursting, give me a call and I can do a free analysis to see if your home will now be at or above market value so you can finally sell it this spring.
For the fellow geeks out there like me who like seeing the stats, here are the stats as of the end of October:
City of Chicago Market Snapshot
- Overall Oct 2013 sales year-over-year rose to 2,231 units, a 7.5 percent gain compared to the 2,076 home sales in October 2012. Single-family sales were up 6.8 percent and condo sales rose 7.9 percent.
- The average median price of a home in October 2013 was $218,500, up 24.9 percent compared to October 2012. The median price for condos rose 23.8 percent to $260,000.
- There were 8,654 homes on the market in October, down 26.3 percent from a year ago as inventory remains tight.
- On average, it took 52 days to sell a house this October, versus 71 days a year ago which is great news for sellers.
- There are still some under-performing areas in Chicago, meaning that the recovery we are seeing is uneven citywide. That’s why it’s crucial to work with a Realtor who understands which areas are appreciating and can steer you away from areas which are still depreciating in value.
Chicago Suburb Market Snapshot
- In the nine-county Chicago metro region, October 2013 home sales totaled 9,303, up 9.6 percent from October 2012.
- The median home price in the Chicago metro area in October 2013 was $175,000, up 14.4 percent year-over-year.
- Inventory was down to 37,944 units, a 29 percent drop compared to a year ago.
- Time on the market dropped substantially, with metro area listings averaging 62 days until sale, compared to 84 days in October 2012.
- The average commitment for a 30-year, fixed-rate mortgage in Illinois was 4.20 percent in October 2013, up from 3.36 percent a year ago.
Shay’s Summary
- Economists project a strong three-month period of growth both in sales and median prices. The sales forecast for November and December 2013, and January 2014 suggests an increase of between 22.7% to 30.7 percent for the Chicago area on a year-over-year basis. The median price is forecast to rise by 14.2 percent in November, 14.5 percent in December and 17.5 percent in January, on a year-over-year basis.
- Mortgage rates are starting to inch up but remain attractive enough to maintain the market’s momentum. However, for buyers, it’s better to buy soon rather than wait as I predict interest rates will continue to rise in 2014.
For more detailed information on the Chicago Real Estate market for October 2013 click here.
Have questions about the market? Interested in renting, buying or selling? Want to know what your home is currently worth? Email us or call!
