If you've been waiting on the sidelines to buy a home, you'll want to read this email.
That's because right now is a unique moment for the real estate market.
And here is why:
First off, the supply of homes is finally growing by a sizeable amount.
In January, the number of homes listed for sale rose by 4.4% from the previous year.
This is the largest supply increase since May 2015.
This is important because, while the previous lack of supply created a longstanding seller's market, with supply of homes exceeding demand, the January / February numbers indicate a change is likely coming.
The price growth that started in 2012 seems to be coming to an end - and prices are leveling off - Just a year ago, more than 20% of homes sold above their listing price. That has since decreased to 16.7%.
Similarly, 18.9% of homes underwent a price drop a year ago. That's now up to 23.2% - Prices are coming down from last year as more homes come on the market.
Overall, home sale prices moved forward only 2.9% last year compared to double-digit growth in previous years. This means home price growth is finally on par with wage growth for the first time in years.
The leveling off in price may be encouraging buyers to wait to get a 'sweet deal', as some buyers expect prices to drop further still -- and so they are waiting to buy.
Should you do the same?
My personal opinion is no — and here's why:
Right now, we're also seeing a significant dip in mortgage rates.
Mortgage rates increased for 18 months, all the way thru last November.
Since then, they've dropped due to a few reasons, including stock market volatility, and they're now over a half percent lower than at their peak in November.
However, the current dip in rates won't last forever.
Mortgage rates will likely start to increase again over the next few months, and this can easily overwhelm any drop in home prices that might happen in the future. Rising interests rates will decrease buying power and also decrease the size of a mortgage buyers will qualify buyers for.
In other words, if you're looking to buy a great house at a fair price, now might be a unique moment in time.
That's why I encourage you to at least start looking now - Get familiar with the market and see what is out there.
First of all knowledge is power, and each home is unique. You just might see something that meets your goals and fits your budget. Since homes have seen an increase in prices over the last few years you will likely also be able to sell your current home at a good price and feel good about the transaction.
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If you have questions about the Chicagoland and NorthShore real estate market, or you're ready to go out and see some homes, give me a call at 312-278-3473.
I'm here to help.