It may be winter in Chicago, but real estate in the Windy City is hot. In the city of Chicago, the market continued its upward trend posting double-digit year-end gains in median home prices. For the year ending 2014, median prices soared to $245,000, an increase of 11.3% from last year!
Median prices in the suburbs echoed a similar story, topping out at $194,000 in the nine-county Chicago metropolitan area, a year-over-year increase of 9.3%. Many Chicago real estate agents and brokers are anticipating home prices will continue its upward trajectory in 2015. “Significant employment gains, declines in the unemployment rate and gas prices have all contributed to enhancing consumer expectations that hopefully will turn into more housing sales,” said Geoffrey J.D. Hewings, director, Regional Economics Applications Laboratory.
Although the total number of sales was down an average 6.7% throughout Chicago, inventory is still tight and it is very much a seller’s market in many neighborhoods. Also, tough mortgage restrictions kept many potential first-time home buyers out of the market. “The average homeowner is selling in less than two months, and benefiting from higher median prices,” said Hugh Rider, president, Chicago Association of Realtors®.
Real estate agents and brokers are optimistic that sales will increase as qualified home buyers take advantage of significantly reduced mortgage insurance rates and low down payment requirements along with historically low interest rates when revised mortgage rules kick in later this year. However, there are some first-time buyers who fear being priced out of the market by the time it goes into effect. “With interest rates at lows not seen since early 2013, the strength in existing-sales in upcoming months will largely depend on the willingness of current homeowners to realize their equity gains from the past couple years and trade up,” noted Lawrence Yun, chief economist, National Association of Realtors®.
With a healthy market recovery poised to continue and more first-time home buyers seeking their share of the American dream, Chicago real estate agents and brokers should stay very busy helping buyers and sellers negotiate the market.