Permalink | Subscribe to this feed The real estate market has always made news headlines, especially recently: “Two thirds of Americans expect the housing market to crash in the next three years” (MarketWatch). Now, more than ever, it’s important to work with a real estate professional who has her finger on the pulse of the market and can provide accurate information. While my crystal ball is still broken, I can shed some light as to what is actually happening in the market. BUYERS~ “Rates are high; maybe I should wait to purchase a home when they come down.” The Federal Reserve made moves in 2022 to help battle inflation, which in turn, caused interest rates to more than double from the previous year. Experts are predicting rates to stabilize this year between 5.5% and 6.5%, which is lower than the historical average interest rate for a 30 year mortgage of 8%. Your budget may be cut from $450,000 to $400,000, but you are no longer paying a premium with 20 other competing offers. Risky negotiation tactics of appraisal gaps and waiving inspections are now rarely needed. If rates do continue to decrease, buyer demand will increase. This will lessen the negotiation power of buyers. The best time to buy a home is whenever you can find the right home, at a price you are comfortable paying. Instead, consider this: Marry the house, but date the rate - many lenders are offering incentives for refinancing within the first year, if rates do come down. “I’m waiting for home prices to drop before making a purchase.” The month’s supply inventory in the Chicagoland area is sitting at 1.7, at the time of writing this blog. This means that in less than two months, the inventory of homes for sale would be completely depleted if no new homes came on the market. That number is still staggeringly low; the five year average is 4 month’s supply of inventory in a normal market. We are still in a seller’s market. The inventory (ie. supply) is much lower than the number of buyers (ie. demand). SELLERS~ “My home is going to sit on the market too long if I list it for sale now.” During the height of the market, homes were sitting on the market for a median of 8 days but, at the time of writing this blog, homes have a market median time of 27 days. When you look over the past 10 years, market time averages around 65 days during this time of year. While the market seems to be stabilizing, homes are still selling abnormally quickly. “I will no longer get top dollar if I sell.” It is still a seller’s market! On average homes are selling at 95-97% of list price. When you consider that list prices are now reflective of market value during the height of the market, your home is still going to sell at top dollar. It is VERY important to list at the right price, though. If you list too high, you risk sitting on the market too long and then having a stigma attached to the home with constantly having to make price reductions. If you list too low, you leave money sitting on the table. The right real estate agent will help ensure you price right and get top dollar. PREDICTIONS~ Market experts predict the mortgage interest rate to settle over this year, and even decrease from the rates we are seeing today. Inventory will likely remain low over this next year, keeping us in a seller’s market. Your uncle Dave and cousin Sharon have the best intentions, but they are likely going to continue giving you misinformation about what’s going on in the housing market. Thankfully, we are only a phone call away to help! Call/text The DeVries Team: 815-916-9374 " />

January 2023 Market Update

by Jessica DeVries, SSF, SRS, CSS, PSA Posted on Tuesday, February 7, 2023 12:43 PM

Permalink | Subscribe to this feed

The real estate market has always made news headlines, especially recently: “Two thirds of Americans expect the housing market to crash in the next three years” (MarketWatch). Now, more than ever, it’s important to work with a real estate professional who has her finger on the pulse of the market and can provide accurate information. While my crystal ball is still broken, I can shed some light as to what is actually happening in the market.

BUYERS~

“Rates are high; maybe I should wait to purchase a home when they come down.”

The Federal Reserve made moves in 2022 to help battle inflation, which in turn, caused interest rates to more than double from the previous year. Experts are predicting rates to stabilize this year between 5.5% and 6.5%, which is lower than the historical average interest rate for a 30 year mortgage of 8%. Your budget may be cut from $450,000 to $400,000, but you are no longer paying a premium with 20 other competing offers. Risky negotiation tactics of appraisal gaps and waiving inspections are now rarely needed.

If rates do continue to decrease, buyer demand will increase. This will lessen the negotiation power of buyers. The best time to buy a home is whenever you can find the right home, at a price you are comfortable paying. Instead, consider this: Marry the house, but date the rate - many lenders are offering incentives for refinancing within the first year, if rates do come down.

“I’m waiting for home prices to drop before making a purchase.”

The month’s supply inventory in the Chicagoland area is sitting at 1.7, at the time of writing this blog. This means that in less than two months, the inventory of homes for sale would be completely depleted if no new homes came on the market. That number is still staggeringly low; the five year average is 4 month’s supply of inventory in a normal market. We are still in a seller’s market. The inventory (ie. supply) is much lower than the number of buyers (ie. demand).

SELLERS~

“My home is going to sit on the market too long if I list it for sale now.”

During the height of the market, homes were sitting on the market for a median of 8 days but, at the time of writing this blog, homes have a market median time of 27 days. When you look over the past 10 years, market time averages around 65 days during this time of year. While the market seems to be stabilizing, homes are still selling abnormally quickly.

“I will no longer get top dollar if I sell.”

It is still a seller’s market! On average homes are selling at 95-97% of list price. When you consider that list prices are now reflective of market value during the height of the market, your home is still going to sell at top dollar. It is VERY important to list at the right price, though. If you list too high, you risk sitting on the market too long and then having a stigma attached to the home with constantly having to make price reductions. If you list too low, you leave money sitting on the table. The right real estate agent will help ensure you price right and get top dollar.

PREDICTIONS~

Market experts predict the mortgage interest rate to settle over this year, and even decrease from the rates we are seeing today. Inventory will likely remain low over this next year, keeping us in a seller’s market. Your uncle Dave and cousin Sharon have the best intentions, but they are likely going to continue giving you misinformation about what’s going on in the housing market. Thankfully, we are only a phone call away to help! Call/text The DeVries Team: 815-916-9374