Highlights:
💵 Strong appreciation in national values in 2019 (5.41% in our region)
📈 Forecasts project a national increase of 5.6% going forward
🏦 Low rates & low inventory translate to high demand and rising home values
﹪ Interest rates are at 3-year lows, which is great news for both sellers and buyers
📉 In the Chicagoland area, supply has decreased by about 8,000 homes over the past 3 years
🌟 During that same time, prices have increased about $35,000
🏙 Market time has also decreased and is sitting just below 80 days
🌟As always, contact us for a smarter approach to real estate! 👍
Video Transcript:
Are you thinking of selling or buying a home in the Chicagoland area this summer? Or, are you just curious as to how the market is doing? Hi, I’m Eric with Eric Andersen Homes, and this is your July, 2019 market update. First, let’s look at some big-picture national stats so we can get some broader context and anticipate where the market’s going.
- So first of all, we can see that there’s been strong appreciation in national home values from last year. The historic average is only 3.6%. We’re at 5.41% for 2019 in the East North Central region, and each region in the country is above historic averages for 2019.
- So that’s obviously good news. And while market remains strong, this does represent a slowing down in appreciation. You can see appreciation has decreased over 2019, especially when we break it out month by month. We hit a low of 3% in February, with an uptick back to 3.5% this spring.
- Now, check out Corelogic’s forecast. They’re telling us we’ve already hit rock bottom, and they’re projecting an increase to 5.6% nationally going forward. What we’re seeing overall is more optimism from the experts in the latest reports.
- Why is this? What we’re seeing is increased demand due to low interest rates and lower inventory. And that, of course, translates to higher home values.
- Check out this interest rate chart. 30-year fixed mortgages are at their 3-year low, at 3.73%. This is great news for both buyers and sellers. If you’re buying, you can either get more for your money or a lower payment. If you’re selling, your home is an option for more buyers when rates are low.
- Now, moving on to the Home Price Expectation Survey, we can see what both the optimistic and pessimistic experts are projecting with regard to home values over the next five years. What’s particularly noteworthy here is that even the most negative experts are still seeing appreciation, at the rate of 6.7%.
- Here, you can see some projected appreciation stats from other organizations. Some are more or less optimistic, but again, note that all are positive.
- One final point on national trends. Based on this data, the Housing & Mortgage Market Review are suggesting that the probability of home values being lower in 2 years than they are now is minimal. None of the experts are predicting a return to 2007.
Most economists are predicting the 2nd half of 2019 to be stronger than the first half. Here are two quotes. The first is from Danielle Hale, who is the chief economist at Realtor.com. She says, “Lower mortgage rates, higher wages, and more homes for sale have helped counteract rising home prices, and ultimately, made it so that buyers are able to afford more than last year.”
Sam Khater, the Chief Economist at Freddie Mac, agrees. He says, “The drop in mortgage rates over the last two months is already being felt in the housing market. In the near term, we expect the housing market to continue to improve from both a sales and price perspective.”
Looking more locally, here are three key stats for the Chicagoland market:
- We can see that inventory has gone down. Over the past three years, supply has decreased by about 8,000 homes. That means more competition for what is out there.
- This provides us with a nice illustration of supply and demand. As inventory decreases, what happens to price? It increases. And that is exactly what has happened, as you can see. Over the past three years, we’ve seen home values rise, on average, about $35,000 in the Chicagoland area.
- And, with there being more competition for homes, market time has also decreased. As you can see, average market time right now is sitting just below 80 days, down from a high of almost 95 days three years ago.
So buyers, if you’re looking to get the best deal, check out homes that have been on the market over 77 days, which is the current average. Sometimes my buyers will show me a home that’s been on the market for like 42 days and ask what’s wrong with it, why can’t it sell, obviously they must be desperate and can’t give the thing away. And while every seller’s circumstance will vary, the fact is, 42 days on the market is not long at all. It’s less than a whole month below average market time. Some homes are selling very quickly, but that’s not the norm for the greater Chicagoland area. So if you are looking to get a deal, your best bet is to find something that’s been on the market for 3 months or longer. And who knows? If the seller is motivated enough, they may take a lower, reasonable offer if it meets their needs, regardless of market time.
Sellers, what does this mean for you? Make sure you price your home appropriately. If you’re overpriced, you’re limiting the number of buyers who can afford your home. As the cost goes up, the number of qualified buyers goes down. More expensive homes tend to sit longer because not as many people can afford the larger mortgage.
The other thing you want to do is make sure your home has extensive marketing. Not only do you need many high-quality photos, also be sure you have many videos and an extensive online presence. The homes that look the best get the most views. Exposure is the name of the game. You can’t sell your home if nobody knows it’s for sale. So the first thing you need to do is show up. And the second thing is to look good. Only one chance to make a great first impression. And if your home isn’t marketed properly, many buyers will never even see it because they keep coming across the ones that look the best online.
And remember, just putting the house on the MLS and doing an open house isn’t enough. Buyers do extensive research online when purchasing a home—I’ve seen it firsthand; Zillow fever is a real thing—so it’s essential that your house has a massive, on-line digital marketing strategy.
Finally, make sure your home is in show-ready condition and is available for buyers to see as much as possible. When a buyer is ready, you and your home need to be ready, too. I know it can be frustrating letting a buyer in on a moment’s notice, but if you want to maximize your profit, it’s important not to lose out on potential buyers.
Well, I hope this Housing Market Update was helpful. I’m Eric with Eric Andersen Homes, and, as always, please reach out to me anytime so we can discuss the latest, cutting-edge technologies and how I will use those to save you time and put more money in your pocket. As always, my goal is to provide you with a smarter approach to real estate.
Eric Andersen (708) 674-6725 call/text
eric@eandersenhomes.com
www.ericandersenhomes.com