CHICAGO—An unusual confluence of trends in the northern IL housing market presents an interesting mix of challenges and opportunities to buyers and sellers during the final months of 2018, according to an analysis by the RE/MAX Northern Illinois regional network.
“We’re seeing sales activity and price levels comparable to what we experienced a year ago, but with some important differences,” says Jeff La Grange, vice president of the regional network.
One significant change has been a turnaround in the inventory of homes for sale. The supply of listings in the Chicago area shrank for two years until May of this year but has slowly expanded since then, notes LaGrange. However, most of that growth involved attached homes and luxury homes. Listings of moderately priced single-family homes remain in short supply in most submarkets.
Another noteworthy change emerging in 2018 has been a slowdown in overall appreciation, with prices still rising but at a slower pace.
“The metro-Chicago median sales price for the first eight months of 2018, as an example, was 2.1% higher than the same period in 2017, but last year the comparable result was a gain of 5.7%,” LaGrange says.
Home values are rising most quickly for entry-level and moderately priced homes, reports Amy Pecoraro of RE/MAX Achievers in suburban Lombard.
According to Dave Shalabi of RE/MAX Synergy in Orland Park, homes priced from $250,000 to $500,000 continue to sell briskly.
“There are a lot of first-time buyers in that segment, so it’s very competitive with short market times and multiple offers, a situation that clearly favors sellers,” Shalabi says. “These young buyers are more interested in quality of life than the size of the home, and they are willing to pay top dollar for the right home in top condition. At the same time, buyers are more fiscally conservative now than I’ve seen at any earlier time in my career, and I’m delighted with that, “because we don’t want clients to end up in financial trouble.”
But that strong demand is absent when it comes to the luxury market, says Basel Tarabein, of RE/MAX At Home in Rolling Meadows. “Pricing is definitely under pressure for homes listed at $800,000 or more, and that is creating some excellent buying opportunities. Rising property taxes are dampening the potential price appreciation for those homes, and rising mortgage interest rates may be having a similar impact.”