Here are the three main trends we are seeing as Chicago opens back up
While the broad effects of coronavirus on our society and economy continue, we are seeing a major uptick in real estate activity here in Chicago. Adjusting to the “new normal” seems to mean adjusting to a competitive market where everyone has an advantage.
Interest rates are at historically low levels which presents an advantage for buyers. Programs for first time home buyers including grants and low down payments are available.
Prices have remained strong and we are seeing properties go under contract very quickly and
with multiple offers when priced well for the current market conditions.
A combination of market conditions is creating a “perfect storm” for increased strong market
activity. This is both a buyer's and a seller's market.
Buyers be aware, of incredible rates
Right now, we are seeing historically low mortgage interest rates for buyers. This presents a unique advantage to lock in a low rate and borrow money more inexpensively, which can have a surprisingly large effect on your monthly mortgage payment.
There are also many special programs and grants available to first time home buyers. But does that mean you should buy right now?
In our opinion the answer to that question comes back to a bigger series of questions: What is your plan? Where is life taking you right now, and for how long? What are the big next steps in your life?
Having a clear answer to these will help make an easier decision on whether or not now is the right time to buy for you.
If you are planning to stay put for the next 3-4 years, and you and your broker find places that will fit your personal needs for at least the next several years, then now is an excellent time to buy. If, however you are considering one move now before a then larger move, like out into the suburbs, then consider continuing to rent. Essentially if there is any uncertainty in your life plan, then it’s always safe to rent.
Interest rates may be low, but as you’ll see in the next section prices are not. So, while interest rates make things seem like a good deal in a sense, those higher prices keep it from being a “buy no matter what” situation. Essentially, if you are looking for the deal of the century, it’s probably not out there in terms of price. That being said the rates are so low it’s still a great time to buy.
Ultimately if it’s the right time for you to buy in your own life plan, then it is definitely a great time to buy with the current market conditions.
Sellers, the time may be now to maximize market value if you have been considering selling.
Looking at last month’s market data for attached properties New Listings were down, Under Contract was also down but not as significantly, and Average Sales Price remained flat.
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New Listings
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Under Contract
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Average Sales Price
*May 2020 vs May 2019 data for attached properties (condos)
While the market supply is down by nearly a third, the numbers of units under contract are only down one fifth, meaning more is under contract proportionally than the year prior. At the same time prices have essentially stayed the same year over year.
This is consistent with what we are seeing now: the prices sellers are getting have remained strong and demand seems to be continuing to out-pace supply. For sellers who have been thinking about making the decision to sell between now or in the near future, we think the time is now!
Why?
1. Demand is strong, and buyers have been waiting for months to get into the market.
2. You can sell your place fast right now; we are seeing homes go under contract quickly and with multiple offers when priced well.
3. We have had years and years of growth in pricing and haven’t seen anything drop significantly.
4. Supply is low, so good places stand out quickly.
The “perfect storm” of market conditions where everyone wins
The combination of low interest rates for buyers, strong demand from buyers, low supply of good inventory, and significant uptick in traffic all point to a perfect alignment of market conditions for strong market activity. Whether you are a buyer, seller, or investor, be ready because it is a strong and a competitive market right now.
As a buyer you will need a broker who can get you into places quickly so that you have time to review and put in an offer potentially before others.
As a seller you will need a broker who can help you run strong comps and help you price your home to maximize value in this current market, and to help you navigate the potential of multiple offers.
For investors, investment properties are even harder to find than residential properties, as everyone is ready to take advantage of low interest rates. A broker can help you find off market deals, which can be critical in a competitive market. They should also be able to help you run financials to ensure it’s a good deal, based on CMA and strong understanding of comparable nearby rental properties.
Something that we are noticing perhaps due to market conditions and maybe the effects of coronavirus more generally are that people’s timelines seem to be more accelerated. Someone who is currently living downtown who was considering a move to the neighborhoods in the future seem to be ready for that change now. Someone who has been in the neighborhoods for a while and may have been thinking about moving to the suburbs similarly now seem to be ready for that change. We aren’t seeing people change their plans entirely, but maybe take that step more quickly.
As we cautiously emerge from this health crisis the market seems to be ready. Normally we ask: Is this a buyer’s market or a seller’s market? And right now, its everyone’s market who is ready to participate!
Get in touch with us if you have any questions, comments, or would like to discuss with a broker today.