In a sign that the housing market is continuing to recover existing home sales prices in the Midwest increased by 9.4% in the second quarter of 2014. Although, they are still about 6.1% lower compared to the previous year, according to the National Association of Realtors®, the gains in the Midwest outperformed other markets around the country. The average existing single family home sales price for the same period was $167,600, a 4.4% increase over last year.
The overall slower pace of rising home sales prices can be attributed to a cooling in the market due to increasing mortgage rates. While current mortgage rates are still relatively low hovering at 4.25% it is more than 20% higher than in May 2013, when they were at their lowest.
Chicago in particular, is one of the hottest, if not the hottest real estate market in the country right now. There were a total number of 2,838 home sales in July 2014, a year-over-year increase of 31.1%, according to figures published by HousingWire. Also, the median sold price in Chicago is $289,100, compared to the national average of $217,800, per Zillow. This illustrates that home buyers are gaining confidence in the market resulting in more sellers listing their homes for sale. In fact, multiple offers and cash purchases are common which can be somewhat disconcerting to first time buyers. However, savvy real estate agents and brokers in Chicago are working hard negotiating the best offers for their clients.
Condos, once among the hardest hit during the recession, have made a comeback and pending sale offers are on the rise. On the other hand, many fear this to be a temporary surge due to limited inventory. When inventory decreases buyers begin to look into other real estate options.
With rents continuing to go up and mortgage rates still considered favorable despite recent increases, buyers are emerging from the sidelines to take advantage of current housing prices before they get priced out of the market. This is keeping real estate agents and brokers in Chicago and other markets around the Midwest very busy with both buyers and sellers.