News

At last, we have turned the corner in the Chicago area housing market. After a burst of activity in spring 2013, we saw sustained moderate growth in the last two quarters. For the year, unit sales have increased nearly 18% and total sales volume has increased more than 24% throughout the region. More significant than any increase in numbers, is the increased confidence that our clients and agents are feeling. And there are many reasons to feel very good about where we are going in the next year.

*    We expect to see stable, solid growth of about 4-5% in both home values and unit sales. Prices and volume will not rise as quickly as in 2013, but will approach a more “normal” market trend line.

*    First-time buyers will continue to drive sales, as affordability remains high. Nationwide, it is 35% cheaper to buy than to rent, and it’s 42% less expensive in the Chicago area. However, first-time buyers will play a smaller role, as move-up/move-down buyers return to the market.. As prices climb, homeowners have greater equity, and selling is possible, which will provide a greater supply of inventory. Some might call this an upward spiral effect.

*    Distressed properties and foreclosures will continue to decline, but will remain a part of the inventory mix. The number of Chicago area homes in foreclosure is 4%, compared to 5.7% last year. Nationally, the number of new homes starting the foreclosure process reached its lowest point in November since 2005. New construction activity is increasing nationwide, and 1.15 million housing units will be started next year. We are now seeing the highest levels of activity since 2008.

*    Mortgage rates will increase modestly. Freddie MAC economists predict that rates be around 5% at the end of 2014 and they predict that next year will see more purchase mortgages than refinance loans.  As rates climb, refinance activity slows and banks pay more attention to new purchase business, making the process easier and less frenzied for new buyers. Rising rates also put some pressure on buyers to act now, rather than delay.

*    New mortgage rules go into effect in 2014 offering greater lending guidance to banks which will lower risk for lending.

If you are looking to buy or sell a home, working with an agent that keeps up with the market trends is important. I take pride in making your real estate experience both informative and pleasant. Contact me, Marina Jacobson for all of your real estate needs.