2014 has started off to be a really good year, and experts predict that on a national level we are headed back to a more normal (3-5%) appreciation year over year through 2018. This is stable, predictable growth and back on track.
The Home Price Expectation Survey done first quarter this year breaks down what the experts are saying. In green: look at the pre-bubble trend which predicted appreciation up by 19.4% which is very close to the blue column which is is an average of what all the experts said. The bulls in the market are very optimistic, forecasting over 28% appreciation. The most exciting news is that even the bears in the market predict over 10%. Remember these projections are on a national level, and our Near North Chicago neighborhoods are trending very well too. Watch for my next Market Profile coming out soon as we just closed on the end of first quarter sales data.
In recent months I’ve had a fair number of client relocating from other parts of the country with job transfers which is a good sign for our local Chicago economy. Some of these transferees are moving directly into a rental, and some have opted for a short-term or one year lease. The median rent prices in Chicago has gone up 10% since 2009. Jed Kolko, Chief Economist at Trulia reported in February that in all 100 of the major metros, it is cheaper to buy than to rent. On average, it’s 38 percent cheaper. It’s hard to find a 2 bedroom rental on Chicago’s Near North Side for less than $3000.
Another reason to consider buying instead of renting is that financial experts are saying that interest rates are going to be close to, if not greater, than five percent by this time next year. The FED Chairman, Janet Yellen recently announced that instead of prolonging the stimulus, she will continue tapering, pulling back on the stimulus throughout the year. As soon as she made that announcement, interest rates began to tick up.
If you are debating which way to go, please give me a call 312-953-7811!
Happy Birthday Chicago – 177 years old today!
“It is hopeless for the occasional visitor to try to keep up with Chicago. She outgrows his prophecies faster than he can make them.” – Mark Twain, 1883
A vibrant city with a friendly hometown feel, and one of the most iconic metropolitan flags in the country.
There is meaning to each aspect of our flag. The white stripes represent the north, south and west sides of the city. The top blue stripe represents Lake Michigan and the North Branch of the Chicago River. The bottom blue stripe represents the South Branch of the river and the Great Canal, and the Chicago Portage. The four six-pointed red stars represent major historical events: Fort Dearborn, the Great Chicago Fire of 1871, the World’s Columbian Exposition of 1893, and the Century of Progress Exposition of 1933–34. Each of the 6 points represent a concept. Click here to learn more.
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A lot of effort goes into preparing a home to go to market and setting the stage for showings. Many sellers to want feedback from the buyers and their brokers who come through. There are two categories for feedback: from buyers and from their brokers; and there are also two schools of thought.
Honest buyer feedback can be valuable, but there can be concerns about the validity for two reasons. The home search for a buyer is a dynamic process, often with their expectations adjusting as they learn the market. Priority that a buyer gives their criteria may shift. The seasoned buyer who has seen all the listings on the market, will have the valuable feedback. Sometimes replacing a light bulb with a higher watt bulb or moving furniture can make a big difference. If a seasoned buyers expectations around: location, room size or count or finish level are consistently not met, it could be an indication of price position. Broker feedback can be helpful too. Buyer Brokers have the opportunity to tour similar properties with all of their buyers in the neighborhood and surrounding areas, and they can offer a barometer for buyer expectations.
One school of thought is that feedback is helpful in understanding the market position. Factoring market data points along with feedback help determine if a price adjustment is necessary to take advantage of the buyer pool.
The other school of thought is that paper talks. If you get an offer, you are likely in the ballpark. If you don’t, you aren’t. This route calls for adjustments over time. Real estate rule of thumb is if you don’t have an offer in 30 days or after 30 showings, it’s time to re-evaluate.
In most areas Buyer Brokers take their customers through and the Seller’s Broker is not present. Chicago’s market is unique to many markets in that the custom is that Seller’s Brokers show the homes they have listed for sale. Home sellers here can get real time feedback, and make adjustments if necessary.