Is Real Estate Still Crazy and Chaotic?
Will prices go down?
In Lake County, Illinois we have seen a dramatic increase in pricing over the past 24 months. No one expects these price increases to continue. The value of the home must be in line with the features of the home, the community and what a buyer is willing to pay. While the price escalation will begin to slow down, we don't have evidence the prices will drop.
Very Low Housing Supply
National headlines indicate that more homes came for sale in May, 2022 than in recent years, prompting headlines to claim that prices will be dropping. This may be true nationally, but it is not true in Lake County. We have half the number of homes for sale now as we did 12 months ago.
What about demand for houses?
In the simplest terms, we talk about how long it would take to "run out of houses" if all the houses on the market sold based on current buyer demand. Ten years ago, it would have taken more than one year to empty the supply the homes on the market. Today, we would have no homes to sell in just 5 weeks.
The lower the supply, the greater the demand, the higher the pricing. The good news for buyers is that the frenetic bidding has started to calm down. For sellers, that means you may have less offers, but we only need one good buyer to buy your home.
What about interest rates?
Rates have increased from this spring. While I am not a lender, I can put you in touch with one of our great lenders who can walk you through the best loan option for your situation. You will be paying a higher interest rate than someone who locked in a mortgage this spring. But, you don't have to be locked into that rate forever. Savvy homeonwers will continue to monitor interest rates and re-finance when it makes sense to do so. Most lenders don't think the rates will go down much more, and current rates are still in line with traditionally lower rates. So, don't sit on the sidelines hoping rates will go back down, since that may not happen anytime soon.
The market has favored sellers over the last couple of years. While shifts in the market are occurring, the market still resides in favor of sellers for now. However, the good news is that there are more active listings in the market today than last year. So, whether you're a seller or a buyer, the best way to navigate and stay on top of these market shifts is to work with a local real estate agent who you can trust.