I’ve made the comparison before between the real estate market and the stock market–while we think of the latter and being able to turn on a dime, the real estate market can certainly do the same. Buyers in Chicago (and throughout the country) seem to be shocked that the market has so quickly turned in seller’s favor, with inventory in Chicago decreasing at an accelerating rate.
If you’ve been on the fence about making a Chicago real estate purchase, I absolutely believe that the time is now. Low inventory is one step–but what we can expect next is for the economy to begin to accelerate as well and interest rates start to increase, making it a much less ideal market for a buyer.
Fortunately for now, the interest rates are still low. But with prices beginning to creep up due to a shrinking inventory. I am seeing past clients who are starting to realize that real estate in Chicago is no longer on a downward spiral, and the market is beginning to move quickly.
In fact, in the luxury market, buyers are finding multiple offers for single-family homes in the $1+ million range, especially in areas that have excellent public school districts. Access to good schools is more and more important to each client I meet, and the connection isn’t surprising given that the cost of sending a child to private school in Chicago is typically $20,000 or more.
Chicago Real Estate Saw Quick Turnaround in March
Despite mixed real estate reports across the country in March, Chicago saw a surge of activity, thanks to that low inventory and low market times for for-sale properties. The city saw a double-digit increase in home sales compared to 2012, according to a report from the Illinois Association of Realtors.
For the first time in a long time, the Chicago market wasn’t trending opposite of the national numbers, but rather better than the U.S. market as a whole. Nationally, the number of homes sold in March was down 0.6 percent month/month, while Chicago saw an uptick of 33 percent month/month.
Another report said that 12 percent of Chicago homes for sale went under contract within 14 days of being listed, compared to 35 percent of homes on the national market.
The median sale price was also up 8.9 percent in Chicago from where it was one year ago. The Wall St. Journal attributed the spike in home prices overall to simple supply and demand–but suggested price gains are expected to continue.
Some additional notable highlights from March real estate in Chicago:
Lower proportion of distressed sales: While the number of foreclosures or short sales grew from February, so did traditional sales, shrinking the market share of those distressed sales.
Asking prices on the rise: Sellers’ asking prices are rising at a much higher rate than selling prices. This could be a sign of sellers’ growing confidence.
Homes are moving quicker: Chicago homes for sale were selling 38 percent faster than they were in the month before.
So what does it all mean? Well, these are certainly promising signs for the Chicago real estate market. It’s also an indicator of how quickly the market can begin to change–buyers considering a purchase need to take action while they’re still able to take advantage of lower rates before the economy is no longer working in buyers’ favor.
If you’re ready to see what’s on the market or considering a Chicago real estate purchase, give me a call at (312) 498-5080 or email me at [email protected]ubloff.com.