In January, an unbelievable 70% of homes received multiple offers! In this video, we review the current state of the market, including year-over-year appreciation, 2023 forecasts, median sale price, how today’s market compares with the market in 2008, and the impact of the pandemic, interest rates, and demographics on today’s market.
Link to Fortune article: https://fortune.com/2022/03/07/what-home-prices-will-look-like-2023-fannie-mae/
Link to 7602 Brookbank Rd, Willowbrook: https://www.ericandersenhomes.com/homes-for-sale-details/7602-BROOKBANK-ROAD-WILLOWBROOK-IL-60527/11338749/34/
Link to 1502 Eagle Vista Dr, New Lenox: https://www.ericandersenhomes.com/homes-for-sale-details/1502-EAGLE-VISTA-DRIVE-NEW-LENOX-IL-60451/11332910/34/
Link to 2908 Prairie Ave, Brookfield: https://www.ericandersenhomes.com/homes-for-sale-sold-details/2908-PRAIRIE-AVENUE-BROOKFIELD-IL-60513/11308010/34/
Eric Andersen, B.A., M.Div.
Owner/Designated Managing Broker, Eric Andersen Homes
📲 Text/Call: 708.674.6725
📩 Email: eric@eandersenhomes.com
🌎 www.ericandersenhomes.com
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My name is Eric, and I own an independent real estate brokerage in Chicago, Illinois. I specialize in those looking to relocate from the city or out-of-state to Burr Ridge and the western suburbs. When I’m not selling homes, I love spending time with my wife and 6 children, serving my congregations (I’m an ordained Lutheran pastor and serve Zion, Summit & Immanuel, Hodgkins), exercising, and making Neapolitan pizza from scratch and baking it in my Ooni wood-fired oven. Despite being a Chicago native, I’m a St. Louis Blues & Nashville Predators fan. I’m (still) reading the biography of John Adams by David McCullough (it’s long!). I recently finished “How to Be Perfect” by Michael Schur.
I have a number of awards and designations, including:
⭐️ Platinum 2021 Top 1% Sales Award (Mainstreet Organization of REALTORS®)
⭐️ Top 3 REALTOR® in Brookfield, IL (2021)
⭐️ 20 under 40, class of 2021 (Mainstreet Organization of REALTORS®)
⭐️ Gold 2020 Top 3% Sales Award (Mainstreet Organization of REALTORS®)
⭐️ Endorsed Local Provider (RamseyTrusted)
⭐️ Best of Zillow
⭐️ Pricing Strategy Advisor (National Association of REALTORS®)
⭐️ Certified Staging Consultant (Mainstreet Organization of REALTORS®)
Transcript:
As the weather warms up, the real estate market is only getting hotter. I’m Eric with Eric Andersen Homes, and Fortune reported that in January, an unbelievable seventy percent of homes received multiple offers and ended up in a bidding war. That’s an all-time high, and it’s an indication of the ultra-competitive market we’ve been in since the COVID began. Traditionally, the winter market is a little slower and things pick up in the spring, but that has not been the case this year, or even last year, for that matter. Buyers (and exhausted agents!) have been praying for relief, but 2022 hasn’t given us any. What’s interesting is that after the craziness of the 2021 market, most experts thought things would slow down in 2022. Zillow had originally forecast only eleven percent growth this year, but then they increased their prediction to seventeen point three percent. Fannie Mae was originally expecting a modest seven point nine percent growth in home prices this year, but now even they are revising their projection upward and expect an eleven point two percent increase from last year. That would increase the median sale price from $355,000 to $384,000. If that eleven point two percent figure is correct, that would reflect a slight cooling from last year’s eighteen point eight percent. But even an eleven point two percent is still well above the historical appreciation amount for real estate, which has averaged three point two percent since 1891. In other words, the current market isn’t offering much relief for buyers. Looking ahead to 2023, Fannie Mae is projecting a four point two percent increase, so they’re definitely expecting the market to cool down from where the market is today, but it’s still above the historical average. If correct, that would put the median sale price at $395,000. But things are very different today than they were before the market crash. Unlike in 2007 and 2008, lenders would give credit to anybody with a pulse (and maybe even to dead people!). Plus, back then, the amount of equity homeowners had was much lower than it is today. Today, credit is much more difficult to come by, and homeowners have substantial equity in their homes. As you can see in this chart, equity is at an all-time high, with an average increase of thirty one percent year-over-year, which comes to a national average of $3.2 trillion dollars. As you would expect, then, foreclosures are down. In fact, they are at an all-time low, with just one hundred fifty one thousand in 2021. Foreclosures were at their peak in 2010, when almost three million homes went into foreclosure. That’s a decrease from 2010 to today of ninety five percent. The fast pace of the market today has some worried about a market collapse, but the higher equity and difficulty of obtaining credit makes today’s market very different from that of 2008. Today, the reason for price appreciation isn’t abusive lending practices and over-leveraged homeowners, but basic supply and demand. The pandemic drove interest rates lower, and a wave of first-time homebuyers, largely consisting of millennials, have created the perfect storm. Low rates and low inventory combined with a new generation of homebuyers entering the market has only driven prices up. If you’re interested in buying, we can start looking at homes together and come up with a strategy to put together a winning offer. I was quite pleased, just last weekend I managed to get two offers accepted for my clients despite ultra-competitive conditions. Those two homes are 7602 Brookbank Road in Willowbrook and 1502 Eagle Vista Drive in New Lenox. You can check those homes out in the links in the comments, below. Eagle Vista is one of those rare foreclosures, and it’s probably been about 2 or 3 years since I’ve shown any. If you’re thinking of selling, let me put my marketing expertise to work for you so that you not only capitalize on a strong market but create the most demand possible for your home. My listing 2908 Prairie in Brookfield had multiple offers, and our contract was for $20,000 over asking price. I helped my clients purchase that home back in 2017, and they signed a contract for over $65,000 more than what they paid for it less than give years ago. That was almost a twenty five percent profit in less than five years, and the home was already renovated when they bought it, so no significant updating took place when they lived there. You can also check that listing out and find details on it in the links, below. I’m Eric with Eric Andersen Homes, here to remove the headache from real estate and provide expert guidance for your next purchase or sale.