Before you begin shopping for houses for sale in Edison Park, it’s helpful to set aside some time to study the market and learn about current trends and happenings. The past few years have been unique, and 2023 is already presenting a new set of challenges for both buyers and sellers. There are a number of factors that have contributed to the current state of the market, and it remains to be seen how certain problems will be addressed and when things could start to move in a different direction. This article will bring you up to speed on where things currently stand and how the overall outlook might change or evolve as 2023 continues.
1. What contributes most to the state of housing market?
Rising interest rates and rampant inflation are the two primary factors contributing to the current state of the housing market. It would have been hard to imagine that interest rates could become such an issue when they were at historically low levels only two years ago. Rates dropped in the days and weeks after the onset of the COVID-19 pandemic to the point where buyers were coming out of the woodwork to shop for homes. The staggering demand enabled sellers to charge higher prices for their homes while still fielding multiple offers above the asking price with various waived contingencies.
Things have changed, and demand is nowhere near as high as it was when interest rates were low. In fact, interest rates recently climbed above seven percent when they were closer to two percent in 2020. Combine that with an inflation rate that is higher than it’s been in over 40 years, and it’s understandable where the shift is coming from for the current housing market and the economy.
2. Okay, so that’s the national market. What about the Chicago housing market?
Home prices in Chicago are coming down as well. Less homes are going under contract than what is typical based on past averages, and homes are spending longer periods of time on the market. Most homes will spend at least two weeks on the market and sell for a final price below the listing price. There are scenarios where homes receive multiple offers and sell for a price above asking, but these situations are uncommon in the current market.
3. How much longer will things be like this?
There is optimism that interest rates could come down at some point during 2023. The Federal Reserve has expressed that a rate drop could be around the corner. They recognize that a lower rate creates a more favorable housing market for both buyers and sellers. Unfortunately, it’s hard to predict with any sort of accuracy when this change might happen. It’s likely that inflation would need to get under control before the reserve could justify a lower interest rate. The good news is that both inflation and interest rates have always come down to past averages in recent history, even after seasons when they were higher than they usually are.
4. Is a market crash on the horizon?
Few industry leaders think this is going to happen. In fact, the general consensus is that the market remains in a strong position and is well-equipped to rebound. One important number that most people don’t know about is the mortgage delinquency rate. The mortgage delinquency rate can say a lot about the current health and stability of the housing market. A higher mortgage delinquency rate would suggest that the market is in a volatile position and there may be trouble lurking around the corner. Right now, mortgage delinquency rates are as low as they have been in over 25 years. This is good news for anyone with a stake in the real estate game.
5. Does the market usually rise and fall throughout the year?
This is a common occurrence during most years. Nobody should be surprised to see home prices rise during the late spring and early summer. This is usually the time period when buyer activity is the strongest. There are several reasons why this is the case, including the return of tax refunds and the end of the school year. The market usually stays hot through August and begins to cool off during September and October. People become busy with other tasks during this time and don’t have much margin to think about shopping for homes. The market doesn’t shut down completely, but it’s not uncommon to notice a drop in average prices as the holidays approach.
6. How can I figure out what my home is worth?
Ask your realtor if they can run a Comparative Market Analysis for you. This report will provide you with information about what similar homes have sold for in recent months. You can use this information to think about where you might price your home if you choose to list your home for sale in the next few months. It’s important to use this report as a starting point when pricing your home because you will likely need your home to appraise in order for a buyer to receive the necessary financing to purchase your home.
7. Who can help me if I decide to buy or sell a home in 2023?
You can trust Jack Guest and The House Guests real estate group to help you with your upcoming real estate transaction. They study the market on a daily basis so that they can have an expert understanding of what is happening on the local and national levels. They will ensure that you are well prepared for what lies ahead, and they will take steps to anticipate and address problems before they happen. Reach out to Jack if you have further questions about the current state of the market or if you’re ready to begin the process of shopping for Edison Park homes for sale.
