We’re starting to see a shift in the real estate market. Here’s what you need to know.
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We’re here today with your late summer/early fall 2018 market update. Here in Downtown Chicago, the real estate market has a lot of good news.
Although we’re currently experiencing a shift in the market, prices are still strong and the median price has continued to grow. At the same time, we have been seeing more inventory come on the market.
The number of homes for sale has risen by about 12% over the past year. That’s bringing us to an inventory level of five months. We’re bordering on a buyer’s market, but we’re not quite there yet. If you’re considering selling at some point in the next few years, keep in mind that postponing your sale might not be the best idea. Listing right now offers you the chance to capture the maximum equity in your home before inventory rises even further. We haven’t seen five months of inventory in the downtown market since September of 2012.
There’s no need to panic with the increased inventory. To give you some context, we were seeing upwards of 22 months of inventory in the market during the recession from 2007 to 2009.
Inventory is rising and buyer demand is falling.
Our current shift from a seller’s market to a buyer’s market will result in a constraint on price growth and may result in a bit of price erosion. We have no reason to believe that the long-term price growth in the market will be affected, however. If you plan on staying in your home for the next five or 10 years, it would be wise to wait it out.
The pace of contracts is a great indication of buyer demand. We’ve seen the number of contracts drop by 4.6% over the last year. This shows that with inventory rising, there are fewer buyers taking action in the market. As a result, days on market have risen as well. A home is taking an average of about 79 days to sell in the current market.
If you’re not buying or selling in the downtown market, I encourage you to get a 360 pricing analysis that’s specific to your neighborhood, your house, and your price range to really get a sense of how the market may be shifting in your area. The downtown market is often indicative of what will happen in other markets around Chicago.
If you do have any questions about the Downtown Chicago real estate market or about anything else related to real estate, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.