The real estate market remains scary competitive, with low inventory and high demand defining much of 2024. However, signs of optimism are emerging as we head into 2025, with mortgage rates expected to decline and home sales projected to increase.
📉 Mortgage Rates: Expected to drop to the mid-to-high 5% range in 2025, improving affordability for buyers.
🏠 Home Sales: Projected to increase from 4.7 million in 2024 to 5.4 million in 2025, offering more opportunities for buyers and sellers.
📈 Home Prices: Nationally expected to rise by 2.5% to 4%, with healthier and more sustainable growth compared to recent years.
📊 Burr Ridge: Months supply at 3.47 with a median sale price of $803,000. Homes sell in about 17 days, close to asking price.
⏳ Downers Grove: Intense competition with 1.7 months of inventory, median price of $487,500, and homes selling in just 11 days, often above asking price.
🏡 Naperville: Tight market with 1.67 months of supply, median price of $603,500, and homes selling in 12 days, typically near asking price.
Eric Andersen, B.A., M.Div.
Owner/Designated Managing Broker, Andersen Realty Group
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📩 Email: eric@eandersenhomes.com
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Transcript:
Welcome to our October 2024 real estate market update! I’m Eric with Andersen Realty Group, and in this video we will look at both national and local trends. We’ll consider what’s happening with mortgage rates and inventory across the country, and then we’ll look specifically at Burr Ridge, Downers Grove, and Naperville. With the market in a constant state of flux, it’s important to stay up-to-date with these trends if you’re considering buying or selling a home. We’ll start with the national outlook for context before we look at the western suburbs in detail.
The U.S. housing market in 2024 has been defined by low inventory and high demand, but there are signs of optimism moving forward. The most important of these may be interest rates, which have been a massive hurdle for buyers over the past few years. Finally, they are starting to show signs of easing. Current mortgage rates have been hovering around six point two five percent. Projections for 2025 suggest a further decline into the mid to high five percent range. It’s important to note that any reduction will take place gradually, and it remains dependent on broader economic factors, which have been volatile and are subject to change, as we’ve seen lately. These current predictions are based on current economic data. Overall, lower rates are expected, which will improve affordability, especially for buyers who have been priced out of the market by these interest rates, and by sellers who have been reluctant to make a move due to being locked into lower rates on their current mortgage.
Total home sales in 2024 are projected to close at around four point seven million. This is below what we saw during the pandemic, but this is expected to increase to around five point four million homes in 2025. The projected increase in transactions is based on a combination of lower mortgage rates and slightly higher inventory, which will provide some relief from the current market, which remains brutally competitive for buyers.
Home prices are expected to continue rising, though at a more moderate pace. Remember, the Fed’s goal is to reduce inflation to 2%, not to create deflation. The gains we’ve seen in home values are here to stay, and they are expected to continue increasing to a range of anything between two and a half and four percent. This is a much healthier and more sustainable rate than what we’ve seen since 2020. But, as we’ll see, local conditions can vary greatly, so it’s important also to keep track of your local market. And on that note, let’s turn our attention to Burr Ridge.
The real estate market in Burr Ridge remains competitive, though not quite as fierce as some other nearby markets. The current months supply of inventory is just below three point five months. Anything below six months is considered a seller’s market, and Burr Ridge still has very low inventory, definitely giving the advantage to sellers in most negotiations. The exception to this is when market time gets very high, which gives more leverage to buyers. Both Downers Grove and Naperville have even stronger conditions for selling, and more competition amongst buyers. Over the past year, inventory in Burr Ridge has decreased by almost eleven percent, which is why inventory is still low and why there’s an imbalance between supply and demand. Buyers have less options than they would in a balanced market, and they need to be prepared to compete for the good homes. Market time in Burr Ridge is currently at a median of seventeen days. This indicates a pretty quick turnover for homes. Though again, market times in both Downers and Naperville are lower. Burr Ridge homes are selling around ninety nine point one percent of asking price, again reflecting strong buyer demand. Median sale price in Burr Ridge is just over eight hundred thousand dollars, reflecting the affluent nature of this market. Burr Ridge buyers tend to look for larger, luxury homes, and sometimes the competition for these upscale properties can be fierce.
Turning our attention to Downers Grove, we see even more intense competition here than we did in Burr Ridge. Inventory here is below a two months’ supply, compared to three and a half in Burr Ridge, and inventory has declined by almost fifteen percent in Downers Grove. It’s a pretty significant reduction in available inventory, which has led to homes selling very quickly and often well above asking price. Median market time in Downers is only eleven days, meaning buyers don’t have a whole lot of time to think about making an offer. And remember, many homes will sell during the first weekend on market, or even after a day or two. Sellers are actually getting a slight amount above asking price, reflecting the fact that many homes will go to multiple offers and get competitive. If you’re looking in Downers and see a new listing, there’s a good chance that home will end up in a bidding war. The relief Downers offers versus Burr Ridge is the price tag, where homes are selling for a median of four hundred eighty seven thousand five hundred dollars. This lower median price, coupled with tight inventory, makes Downers Grove an attractive but highly competitive option for buyers looking for a nice community that offers a lot of value for the price.
Turning to Naperville, this market reflects a similar level of competition to what we saw in Downers, with a months supply of one point six seven, which is just a hair below one point seven in Downers. Naperville’s very limited supply indicates the strongest sellers’ market of the three. Over the past year, inventory in Naperville has dropped by over two percent, which is the smallest drop of our three western suburbs. And yet, it is still indicative of tightening market conditions. It should come as no surprise, then, that homes in Naperville are selling very quickly, with a median market time of twelve days. Sellers are getting ninety nine point four percent of asking price, which is almost the same in Burr Ridge but less than in Downers Grove. In all of these markets, buyers are generally paying right around asking price. Some homes will go over, and others will go under. The best advice I can give you is to look at market time, as the listings that are new to market are much more likely to get competitive, particularly if they are nice and priced reasonably. In terms of cost, Naperville’s homes sell for a median of six hundred three thousand five hundred dollars, putting it in between Downers Grove’s more affordable homes and Burr Ridge’s higher-end luxury homes. This middle ground makes Naperville attractive to buyers looking for the right balance of affordability, community, and location.
As you can see, the national and local markets are presenting a mix of challenges and opportunities as we look ahead to 2025. The prospect of easing mortgage rates is probably the most encouraging sign for buyers, but market conditions in the western suburbs remain quite competitive. This is great news for sellers and mean buyers need to be ready to act quickly and possibly to face competition. If you’re thinking of buying or selling a home in Burr Ridge, Downers Grove, Naperville, or the western suburbs of Chicago, reach out to me anytime. Please also like this video, subscribe to my channel, and turn on notifications to stay up-to-date with real estate in Burr Ridge and the western suburbs. I’m Eric with Andersen Realty Group, a family-owned brokerage where we treat our clients like family.