You Never Know It Is The Bottom Until You Are On Your Way Back Up

June 23, 2009

Residential

As prospective buyers are sitting back, waiting, and speculating about when to take advantage of the bottom, it appears we have hit a plateau. One of the most effective ways for pricing to stabilize and then see appreciation is depleting inventory.

Signs Home Prices in Chicago Are Stabilizing

Sun Rise Over Belmont Ave...Maybe Over the Chicago Real Estate Market Too?

Sun Rise Over Belmont Ave...Maybe Over the Chicago Real Estate Market Too?

According to the Illinois Association of Realtors, May marked the fourth consecutive month-to-month increase in home sales for the Illinois housing market and the third monthly increase in the statewide median home sale price. Locally, IAR reports home sales were up 18.7 percent to 5,634 homes sold in May 2009 compared to 4,747 home sales in April 2009. The Chicago median price increased 2.3 percent to $225,000 in May compared to $220,000 in April 2009.

Properties Not Hitting the Market

With the average time people who are remaining in their homes on the rise, the number of market-rate units coming into the marketplace is decreasing. Although the banks are carrying a large inventory of REO (bank owned) properties, some are using other vehicles besides putting them on the open market working with local and state agencies to help stabilize communities hardest hit by foreclosures. Many new developments originally marketed as condominiums are being converted to rentals.

Where are the Buyers Coming From?

Traditionally, we have been able to identify which parts of the market where strongest for potential purchasers. Over the last year or so it has been a roller coaster. One of the largest segments that have always driven the market is first-time home buyers. They fell out of the market when it became almost impossible to buy with less than 10% down. However, they are now back. Lenders have now found options for these home buyers such as FHA. The $8,000 first-time home buyer tax credit seems to have stimulated this segment of the market as well.

This is also one of the greatest opportunities for current homeowners to buy up. Although the seller might be seeing the downside on what they get on the sell-side, they are able to take advantage of the pricing on the buy-side, which keeps the scale tipped toward the good.

For the last year, I have seen so many buyers trying to find that dream home, only focusing on short sales and foreclosures. After losing out on a variety of properties for one reason or another, real home buyers are now looking for a home that works for their needs and negotiating to get a good value for the marketplace.

Although the numbers are not what they once were, we still are seeing a significant number of people relocating and buying homes. Chicago is also still a strong market for second homes. There are some investors in the market taking advantage of pricing as well.

The Key to Getting to the Closing Table

Although many contracts had been written over the last year, many did not come together. It now seems that real estate agents, attorneys, and lenders are working at finding solutions to getting properties under contract and the mortgage brokers and bankers are problem solving the ever changing lending guidelines. Professionals who have faced the challenges of the market and educated themselves through seminars and out there working are taking their newly learned skills to achieve the goal: getting the property closed.

We would like to thank John Picken for generously sharing today’s photo via the Creative Commons License.

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About Andrea Geller

Andrea Geller, Realtor® with Sudler Sotheby?s International Realty, specializes in residential real estate sales and marketing of resale properties and new construction homes. Acknowledged as an expert in the real estate industry, Andrea has been interviewed for industry related articles for print and online media including the Chicago Tribune, Crain's Chicago Business, Reuters, Bankrate.com, and Illinois Realtor Magazine. Andrea's commitment extends to the community as an active member of several professional associations. Her appointments include the Board of Directors of the Chicago, Illinois, and National Association of Realtors® and the Lakeview Chamber of Commerce. She markets herself under HOT PROPERTY®, an innovation in the real estate industry led by Chaz Walters that has been marketed since the 1990s. This unique real estate concept is always a step ahead of the industry providing marketing from cutting edge interactive exposure to targeted innovative advertising opportunities. Visit her at www.hotpropertychicago.com or 773.868.3090.

View all posts by Andrea Geller

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