Realtors and those of us in affiliated businesses are always glad to see Super Bowl Sunday for multiple reasons. The first, of course, is the game. It’s a great reason to get together, small or large, and have a party. Like everyone else. However, unlike everyone else, it’s a last hurrah to the frenzy that is the opening of the “Spring Market” in the real estate business.
You might think, “we are nowhere near spring”! Of course you are right, meteorologically. However, that is not the case on the real estate front. You see, in the business, we have all sort of agreed on two things. First is that people want to take time off over the holidays. For some folks, that means shutting it down and not working much after Thanksgiving. For others, that means December 15 or so. It’s dead quiet during the holidays until January 8 or so and the kids return to school. After that January can be brutally cold (POLAR VORTEX). So most Realtors advise the clients they are talking too late in the year that if they don’t have a deadline that the market will be better after the Super Bowl.
This means three things for the home buyers, improved Inventory, realistic pricing and better interest rates. This may be the single best spring market in a few years to get a great deal as a home buyer.
Improved inventory happens every spring market. This is because of a few factors. First is the fact that many Chicago leases expire May 1. Because of that, first time buyers who are moving from renting to buying are active in February and March so that they can close before their current lease is up. Sellers know this and bring inventory to market to find the largest pool of buyers. Additionally, if you are selling a home and are moving to the suburbs for schools, etc., you want to close by end of May, early June. Coming to market in February gives you maximum time to find a buyer at the right price. The pool of quality, available houses, in every price range, will grow dramatically this month.
Realistic pricing is a bit of an anecdotal observation but one that is based on a few facts. First, is that the market has been rising over the last several years but slowed down a bit in 2018. This slowdown was caused by both rising prices and rising interest rates for mortgages. This combination made the average payment for a $300,000 home jump $400 per month between late 2016 and mid 2018. As the market slowed in 2018, the most motivated sellers dropped their prices and sold. They became the new comparables in establishing market price for the next sale. Basically, prices have stopped rising and are down a bit.
Finally, the interest rate scare we saw last year has moderated. A buyer in November may have closed at 5.25% and today could get 4.25%. That difference in rate is approximately $150 per month. That savings, run out the average amount of time someone owns a home (8 years) is $15K. Yes, $15,000. It’s pretty big.
So if you have been “keeping an eye” on the market, this is your wake up call. Nobody is going to put “prices and rates are down” on any of the real estate signs in the area you want to live in. Things will look the same on the surface, but better homes are available at better deals than we have seen in a couple of years!
