Can a Groundhog Predict the Spring Market? | Real Estate Market Update: February, 2022
Punxsutawney Phil may have just predicted 6 more weeks of winter, but the spring real estate market is in full swing! In this video, we will discuss inventory, demand, and home values, and consider what the real estate market might look like come summer.
Eric Andersen, B.A., M.Div.
Owner/Designated Managing Broker, Eric Andersen Homes
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My name is Eric and I own an independent real estate brokerage in Chicago, Illinois. I specialize in helping out-of-state newcomers find the perfect home here in 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 currently reading the biography of Benjamin Franklin by Walter Isaacson.
I have a number of awards and designations, including:
⭐️ 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:
That groundhog in Pennsylvania may have just predicted 6 more weeks of winter, but the spring real estate market is already in full swing. I’m Eric with Eric Andersen Homes, and this is your February, 2022 real estate market update. If you bought a home last spring, or even tried to buy one, you know how competitive the market was. I had clients writing offers for 5% or more over asking price, waiving inspections and offering to purchase as-is, covering appraisal gaps if needed, and still not getting their offer accepted. This spring is shaping up to be no less competitive. My own listings have been selling before the ink has even dried on the listing agreement, and experts are likewise predicting a very competitive market as we the spring market continues to ramp up. Buyers continue to experience frustration with the lack of inventory, and while new listings are always coming up, they seem to go under contract just as soon as they’re listed. At the end of December, the US housing market only had an inventory of about 900,000 unsold homes, which is lower than a 2 months’ supply. For context, about 5-6 months’ supply is considered a balanced market, with anything below 5 being a sellers’ market and above 6 being a buyers’ market. This low inventory, combined with the large number of pending home sales, makes for ideal selling conditions but a competitive market for buyers. In December, Zillow had fewer than 1 million homes listed for sale, which is seventeen point five percent fewer than were available in December, twenty-twenty and thirty-seven point eight percent fewer than in December, twenty-nineteen. Economist Taylor Marr has commented on how this has affected prices and how things might look come summer. Marr said, “This ongoing supply and demand imbalance is pushing home prices even higher as demand is strong enough to rapidly absorb nearly every home that hits the market. By this summer, higher prices and rates will likely cause buyers to pull back from the market.” It’s interesting, the winter is usually a slower time for real estate, but the low inventory and high demand caused home values to increase in December. In other words, Punxsutawney Phil was wrong, at least when it comes to the real estate market. We may have just gotten all kinds of snow here in Chicago, but the spring market is in full swing. On the bright side for buyers, homes are staying on the market for just a little bit longer than they were this past summer. Average market time now is about two weeks, compared to just one week a few months ago. Whether you’re looking to buy or sell a home, or just starting to think about it, I’d be happy to help. 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.