Chicago Real Estate News

 

Jan. 22, 2020

For the First-Time Home Buyer: FAQs Answered

 

Image result for first time home buyer

 

 

After saving up diligently for years, it’s finally time to purchase your very first home. A first-time home purchase is a big milestone, and one to truly celebrate and cherish. But it’s also a decision that requires careful research.

 

While there may be a litany of advice and resources online about purchasing a home, take it from the local experts who know Chicago’s real estate market best. As the Chicago area’s largest brokerage firm, @properties has over 2,800 agents throughout the region and beyond. Don’t hesitate to reach out to a local agent to learn more about the homebuying process.

Meanwhile, here are answers to some frequently asked questions about buying your first home. You can also click here for a glossary of some common terms you’re likely to encounter as a first-time buyer.

What kind of home do I want?

It’s important for any first-time homebuyer in the Chicago area to understand exactly what type of property they want to search for. Within the city – and throughout many suburbs – there are many housing types: condos, multi-family flats, row homes, single family homes, and more. Each presents a unique lifestyle, as well as varying degrees of responsibility that come with being an owner. For example, owning a multi-unit building will require you to manage maintenance, rent collection, and tenant needs, whereas living in a large condominium building is relatively turnkey.

Other important considerations include location and the features and amenities that come with the home and surrounding neighborhood. Try to picture what’s best for your lifestyle and make a list of the pros and cons of the types of homes you’re considering. This will save you a lot of time in your search.

How do I apply for a mortgage?

There are a variety of options for obtaining a loan to buy your first home. Most consumer banks and credit unions offer a menu of standard mortgage products. An independent mortgage broker, on the other hand, will help you shop for the best interest rates and loan products among a variety of sources.

Some mortgage brokers handle the entire process online. Others work face-to-face while using technology to streamline the process. If this is your first home purchase, it’s always nice to have a human being you can talk to. There are also a number of programs out there designed to help buyers purchase their first home. These programs might offer lower down payments, more lenient qualifying guidelines, and even cash grants. Ask your loan officer.

How much will I need for a down payment?

Again, there are a lot of different ways to look at down payments. Federal Housing Administration (FHA) loan programs require as little as 3.5% down. On the other hand, the prevailing wisdom for many years was that buyers should put down 20%. And the reality is, homebuyers do everything in between.

Lower down payments will translate to higher monthly costs and vice versa. Get the picture? It’s all about you, your financial situation, your comfort level with monthly payments, your timeline for when you want to buy, and other factors. And, not to complicate things, but it’s also worthwhile to consider the cost of money. Interest rates are incredibly low right now. More sophisticated buyers might want to think about whether extra cash they could use to increase their down payment would earn a higher return in other investment vehicles like the stock market.

The bottom line is talk to your @properties agent, talk to your mortgage broker, talk to your accountant, financial advisor or other confidants, and come up with the strategy that’s right for you. If you’re ready to buy a home, there’s almost always a down payment amount and a loan program that will meet your needs.

What about the condition of the home?

When researching properties, and especially when viewing homes, it’s important to get a holistic look at a home. This means looking past the new stainless-steel finishes and quartz countertops and getting an idea of the condition of important structural features and mechanical systems. When was the last time the roof was replaced? How old are the water heaters and furnace? What kind of wiring does the home have? What’s the condition of the plumbing? And, if you’re buying a condominium, what’s the financial condition of the association? Is there a looming special assessment?

It’s necessary to go beyond the surface to make sure that you’re getting a good value and a home without unnecessary or unforeseen headaches. That’s why buyers are advised to request a home inspection prior to closing. Your real estate agent can provide recommendations for a licensed home inspector, who will thoroughly examine the structure and systems of the home. Learn more about the inspection process here.

What happens if my offer is rejected?

Your @properties agent will help you make the most appealing and thorough offer on a property. Most transactions involve at least some negotiation.

If your offer is rejected, your agent will continue to seek information from the seller’s agent to determine the best course of action. If there’s more room in the budget and you’ve found the home of your dreams, it’s usually best to make your best and final offer upfront. However, if the sellers have decided on a different offer or simply aren’t interested in countering, it’s a sign to move on and continue the search. And while losing a home to a better offer can be discouraging, take it from us – things usually have a funny way of working out for the best. The home you ultimately buy will be better than the one you missed out on.

What happens at closing?

Making it to closing day is like getting to the last couple of miles in a marathon. The end may be in sight, but it’s crucial to stay focused on your goal until all documents are signed and the keys are in your hands. Your @properties agent will work with you, your lender, your attorney, and the seller’s agent to ensure a smooth and efficient closing.

At the closing, you will be responsible for bringing the balance of your down payment and the closing costs, such as any loan origination fees, attorney fees, an appraisal fee, transfer tax fees, and title insurance, to name a few. Closing costs vary but typically range from 2% to 5% of the purchase price. Your attorney will guide you through all the documents that need to be signed, and before you know it, you’ll be preparing for that big housewarming party.

Written by @properties

 

Jan. 15, 2020

Housing Market Predictions 2020 – City Breakdown

 

 

Housing Market Sales Growth Price Growth          
United States -1.8% 0.8%          
Akron, Ohio 2.6% 0.0%          
Albany-Schenectady-Troy, N.Y. -0.5% 2.3%          
Albuquerque, N.M. -0.2% 0.9%          
Allentown-Bethlehem-Easton, Pa.-N.J. 2.3% 0.4%          
Atlanta-Sandy Springs-Roswell, Ga. -3.5% 4.5%          
Augusta-Richmond County, Ga.-S.C. -4.2% 2.1%          
Austin-Round Rock, Texas -2.8% -0.2%          
Bakersfield, Calif. -0.3% -1.4%          
Baltimore-Columbia-Towson, Md. -0.1% -0.3%          
Baton Rouge, La. -1.6% 0.4%          
Birmingham-Hoover, Ala. -1.3% -1.1%          
Boise City, Idaho 0.3% 8.1%          
Boston-Cambridge-Newton, Mass.-N.H. -2.1% 1.2%          
Bridgeport-Stamford-Norwalk, Conn. -4.1% 4.8%          
Buffalo-Cheektowaga-Niagara Falls, N.Y. 2.6% -2.2%          
Cape Coral-Fort Myers, Fla. 0.0% 2.6%          
Charleston-North Charleston, S.C. 1.2% 1.9%          
Charlotte-Concord-Gastonia, N.C.-S.C. 0.4% 0.1%          
Chattanooga, Tenn.-Ga. 2.0% 3.6%          
Chicago-Naperville-Elgin, Ill.-Ind.-Wis. -0.9% -0.3%          
Cincinnati, Ohio-Ky.-Ind. 1.3% 0.3%          
Cleveland-Elyria, Ohio 2.6% 0.4%          
Colorado Springs, Colo. -1.4% 6.3%          
Columbia, S.C. 5.5% -0.2%          
Columbus, Ohio -2.0% 1.7%          
Dallas-Fort Worth-Arlington, Texas -4.9% -0.5%          
Dayton, Ohio 0.6% -0.2%          
Deltona-Daytona Beach-Ormond Beach, Fla. 1.1% 0.2%          
Denver-Aurora-Lakewood, Colo. -2.3% 1.7%          
Des Moines-West Des Moines, Iowa -10.5% 0.4%          
Detroit-Warren-Dearborn, Mich -4.1% -1.0%          
Durham-Chapel Hill, N.C. -0.9% 1.2%          
El Paso, Texas 0.9% 0.6%          
Fresno, Calif. -0.7% -0.9%          
Grand Rapids-Wyoming, Mich -4.2% 0.2%          
Greensboro-High Point, N.C. 0.8% -2.9%          
Greenville-Anderson-Mauldin, S.C. -2.5% 0.1%          
Harrisburg-Carlisle, Pa. 0.3% 0.5%          
Hartford-West Hartford-East Hartford, Conn. -3.0% 2.7%          
Houston-The Woodlands-Sugar Land, Texas 0.3% 0.2%          
Indianapolis-Carmel-Anderson, Ind. 0.0% 1.1%          
Jackson, Miss. -2.1% -0.1%          
Jacksonville, Fla. -2.3% 0.7%          
Kansas City, Mo.-Kan. 3.4% -4.0%          
Knoxville, Tenn. 1.6% 1.3%          
Lakeland-Winter Haven, Fla. -0.9% 0.2%          
Las Vegas-Henderson-Paradise, Nev. -9.5% -1.1%          
Little Rock-North Little Rock-Conway, Ark. -2.6% 1.0%          
Los Angeles-Long Beach-Anaheim, Calif. -6.0% 0.7%          
Louisville/Jefferson County, Ky.-Ind. -0.8% 0.9%          
Madison, Wis. -1.3% 1.9%          
McAllen-Edinburg-Mission, Texas 4.4% 4.0%          
Memphis, Tenn.-Miss.-Ark. 0.1% 3.0%          
Miami-Fort Lauderdale-West Palm Beach, Fla. -1.1% -1.2%          
Milwaukee-Waukesha-West Allis, Wis. -3.6% 2.1%          
Minneapolis-St. Paul-Bloomington, Minn.-Wis. -2.4% 2.8%          
Nashville-Davidson–Murfreesboro–Franklin, Tenn. -1.2% 0.4%          
New Haven-Milford, Conn. 5.0% -2.4%          
New Orleans-Metairie, La. -2.3% -0.7%          
New York-Newark-Jersey City, N.Y.-N.J.-Pa. -4.1% 0.7%          
North Port-Sarasota-Bradenton, Fla. 1.6% 0.5%          
Oklahoma City, Okla. -1.4% -0.8%          
Omaha-Council Bluffs, Neb.-Iowa -3.0% 0.7%          
Orlando-Kissimmee-Sanford, Fla. 0.9% 1.8%          
Oxnard-Thousand Oaks-Ventura, Calif. -6.0% 0.1%          
Palm Bay-Melbourne-Titusville, Fla. -9.8% 0.2%          
Philadelphia-Camden-Wilmington, Pa.-N.J.-Del.-Md. -3.9% 0.8%          
Phoenix-Mesa-Scottsdale, Ariz. -0.4% 3.4%          
Pittsburgh, Pa. -0.6% 1.3%          
Portland-South Portland, Maine 1.4% 1.2%          
Portland-Vancouver-Hillsboro, Ore.-Wash. -3.0% 0.5%          
Providence-Warwick, R.I.-Mass. -2.1% 0.2%          
Raleigh, N.C. 0.2% 2.2%          
Richmond, Va. -7.7% 0.6%          
Riverside-San Bernardino-Ontario, Calif. -7.6% 1.5%          
Rochester, N.Y. 4.7% 0.4%          
Sacramento–Roseville–Arden-Arcade, Calif. -6.1% 0.8%          
Salt Lake City, Utah -0.5% 3.5%          
San Antonio-New Braunfels, Texas -1.9% 0.8%          
San Diego-Carlsbad, Calif. -3.2% 0.2%          
San Francisco-Oakland-Hayward, Calif. -4.5% -0.4%          
San Jose-Sunnyvale-Santa Clara, Calif. -3.0% 2.1%          
Scranton–Wilkes-Barre–Hazleton, Pa. -2.7% -3.2%          
Seattle-Tacoma-Bellevue, Wash. -0.8% 3.1%          
Spokane-Spokane Valley, Wash. 1.5% 1.3%          
Springfield, Mass. 0.3% 1.1%          
St. Louis, Mo.-Ill. -1.2% -0.6%          
Stockton-Lodi, Calif. 0.7% -0.5%          
Syracuse, N.Y. -1.4% 0.6%          
Tampa-St. Petersburg-Clearwater, Fla. 0.6% 1.6%          
Toledo, Ohio 0.5% -0.1%          
Tucson, Ariz. 3.4% 3.3%          
Tulsa, Okla. 1.0% -2.3%          
Urban Honolulu, Hawaii 3.6% -0.9%          
Virginia Beach-Norfolk-Newport News, Va.-N.C. -3.8% 1.1%          
Washington-Arlington-Alexandria, DC-Va.-Md.-W. Va. -1.5% 2.6%          
Wichita, Kan. -0.5% 1.1%          
Winston-Salem, N.C. 3.6% 0.5%          
Worcester, Mass.-Conn. -0.4% -0.6%          
Youngstown-Warren-Boardman, Ohio-Pa. -0.4% 2.1%          
Jan. 15, 2020

Chicago 2020 Forecast

 

2020 housing market predictions - realtor.com

 

2020 Housing Market Predictions

National Forecast 2020: Search for balance

– Home price growth will flatten, with a forecasted increase of 0.8 percent
– Inventory will remain constrained, especially at the entry-level price segment
– Mortgage rates are likely to bump up to 3.88 percent by the end of the year
– Tight inventory and rising mortgage rates will lead to dropping sales
– Buyers will continue to move to affordability, benefiting mid-sized markets


 

Realtor.com Forecast for Key Housing Indicators

Housing Indicator Realtor.com 2020 Forecast      
Mortgage Rates Average 3.85% throughout the year, 3.88% by end of year      
Existing Home Median Sales Price Appreciation Up 0.8%      
Existing Home Sales Down 1.8%      
Single-Family Home Housing Starts Up 6%      
Homeownership Rate 64.6%      

Summary - 2020 housing market predictions - Realtor.com

Download full resolution images: [Summary] [Full Infographic (15mb)]

Economic Perspectives

Gross Domestic Product

Economic activity in the United States started 2019 on an upbeat note, fueled by consumer optimism and business confidence. Riding the corporate tax restructuring of the 2017 Tax Cuts and Jobs Act, companies boosted investments and, coupled with solid consumer spending, led to a 4.1 percent annualized gain in gross domestic product (GDP) during the first quarter of the year, according to the Bureau of Economic Analysis. In addition, exports outpaced imports during the period, leading to expectations of increased trade windfalls.

However, as the year wore on, the trade rifts between the US and its trading partners deepened, leading to an escalation in tariffs and overall uncertainty. While consumer optimism remained unabated—leading to a 4.6 percent annualized gain in consumer spending—business confidence waned and resulted in a 1.0 percent drop in investment in the second quarter. Even as government spending picked up the pace, the cumulative effect was a mild 2.0 percent GDP gain in the second quarter.

The loss of momentum was reflected in the third quarter’s GDP figure, which advanced at an initial estimate of 1.9 percent annual rate. The Bureau of Economic Analysis subsequently revised third quarter GDP to 2.1 percent, showing stronger business investment. The Federal Reserve, concerned about a deteriorating global economic outlook, decided to boost liquidity in the financial system, in an effort to prevent an economic slide.

Monetary Policy

The Federal Reserve moved into 2019 signaling through its forward guidance that, as the economy continued on an expansionary track, it would maintain a policy focused on monetary tightening. Markets expected at least two additional short-term interest rate increases at the outset of the year.

Towards the midpoint of the year, however, the central bank’s policy shifted, in response to global changes. While the US economy continued showing signs of growth, major economies around the world slowed. In response to the slowdown, central banks around the world engaged in accommodative monetary responses, resorting to cutting rates and purchasing assets, in an effort to boost output. Along with the Bank of Japan, several central banks in Europe took interest rates into negative territory, attempting to spur investment and liquidity. In response, world currencies dropped against the US dollar, adding pressure on US exporters and sectors sensitive to currency risks.

The Federal Reserve decided to change tack in light of these shifts, and responded by cutting rates 3 times, at the Federal Open Market Committee’s meetings in July, September, and October. The central bank also expressed that it would move from a longer term outlook to a shorter term horizon, assessing incoming economic data through the year to guide its policy actions. While the bank’s two main objectives—stable employment and low inflation—remained on track in 2019, the rate cuts seemed aimed at walking a tightrope between maintaining US economic momentum amid a global economic moderation and placating investors’ expectations for growth.

Employment

Mirroring the shift in business confidence, the pace of employment growth moderated in the first three quarters of 2019. While companies continued adding positions to their payrolls, the number of net new jobs totaled 1.45 million during the January to September timeframe, 27 percent lower than the same period in 2018, based on data from the Bureau of Labor Statistics.

The professional and business services sector—the main driver of employment growth during the past decade—took a back seat to the healthcare and social assistance sector, accounting for 311,000 net new jobs, a 29 percent decline from 2018. With over 410,000 new jobs added to payrolls, the healthcare sector led the pack, posting a 19 percent gain compared with the same period in 2018. Stemming from solid growth in business travel, the lodging and food services sector provided the third largest number of net new jobs in the first nine months of 2019, with 136,000 employees added to payrolls.

As the corporate outlook dimmed partway through the year, employment in manufacturing, trade, transportation and utilities slowed. In addition, despite strong demand for housing, construction companies hired 58 percent fewer employees in 2019 compared with the prior year. The slowdown in hiring was also evident in other sectors, such as mining and logging, financial activities, as well as arts, entertainment and recreation.

Government entities also reflected shifting priorities in 2019. After an extended period of flat hiring, the federal government added 45,000 new positions during the first nine months of the year. Local governments—enjoying rising property tax revenues—also went on a hiring spree, adding 91,000 new employees to payrolls, a 44 percent increase year-over-year. State governments pared back their hiring, adding a more moderate 20,000 new jobs.

The pace of employment, while slower than a year ago, pushed the unemployment rate to 3.6 percent in the third quarter of 2019, the same rate last experienced in the second half of 1969. The labor force participation rate reached 62.8 percent in the third quarter of the year, slightly below the average rate recorded over the past decade. While wages gained ground during 2019, at 3.0 percent during the first half of the year, when adjusted for inflation, they managed a more modest 1.2 percent year-over-year average gain.

Consumer Confidence

Consumer confidence spent the better part of 2019 moving sideways, despite monthly fluctuations. In September, the Present Situation component of the Conference Board Consumer Confidence Index was unchanged compared with the same month in 2018. However, the Expectations component dropped 15 percent over the figure from the prior year, leading to an 8 percent decline in the overall index, and implying that consumers were expecting deteriorating conditions over the next few months.

2020 Economic Outlook

As economic momentum moderated through 2019 and global headwinds gather, GDP growth is projected to post a modest 1.7 percent advance in 2020. As the housing share of expenses continues rising, consumers—the largest contributor to output—will likely trim back on non-housing spending. A slowdown in consumer spending, coupled with rising global uncertainty and market volatility, can be expected to lead companies to contain costs and trim employment goals. An employment slowdown will move the unemployment rate from 3.6 percent at the start of 2020 to 3.9 percent by the end of the year—a jobless rate still below what would be expected in a healthy economy, but a shift in the wrong direction. In turn, consumer confidence will soften during the year, with the Conference Board’s Consumer Confidence Index estimated to decline 21 percent.

Following the Federal Reserve’s monetary accommodation, inflation expectations remain modest and well-anchored, translating into a 2.0 percent year-over-year increase in 2020. While short term rates remain low, economic moderation is likely to impact bond markets, leading to mortgage rates moving mostly sideways in 2020. Rates for 30-year fixed mortgages are projected to average 3.85 percent during the next year.

Housing Trends in 2020

Inventory Outlook - 2020 housing market predictions - Realtor.com

Download full resolution images: [Inventory Outlook] [Full Infographic (15mb)]

1) Supply

Housing supply was a tale of two halves in 2019. In the first six months, we saw the effect of low affordability, which translated into an inventory build-up around the country. The number of homes available for sale rose rapidly, at nearly 7 percent on a yearly basis, the fastest pace of growth since 2014. Before spring arrived we had already seen the first material move in favor of buyers. Inventory was on an expansionary path leading to the summer, as prices further overheated and frustrated buyers reached a point of exhaustion. However, the landscape shifted quickly. As mortgage rates sank in March, the low rate environment gave the housing market a second wind. Thousands of buyers that were priced out by sky-high prices found a way to enter the market by leaning on financing, and those that were on the edge of qualifying were suddenly and automatically back in. At the start of this year, 2-out-of-3 of markets were seeing inventory growth. As we wrap the year, only 1-in-10 are seeing growth, placing housing into acute shortage mode.

The market is still years away from reaching an adequate supply of homes to meet today’s demand from buyers. Despite improvements to new construction and short waves of sellers, next year will once again fail to bring a solution to the inventory shortage. In 2020, we expect inventory to struggle to grow and could instead reach a historic low level. The yearly declines are likely to be moderate and range between 1-to-5 percent for most of the year. A steady flow of demand, and robust-yet-declining seller sentiment will combine to ensure there is no surplus adequately-priced inventory.

2) Demand

A low rate environment, rising rents, and the ever expanding millennial population broadened the potential homebuyer pool and maintained a strong demand foundation in 2019. Buyer sentiment peaked in the summer and powered sales growth in the fall. However, it lost momentum later in the year, as conditions of low affordability and economic uncertainty persisted.

Overall buyer demand will remain very robust, particularly at the entry level, in 2020. The largest population cohort in the country (those born in 1990) will turn 30 in 2020, accounting for 4.8 million millennials hitting peak home buying age. As a group, Millennials (those born 1981-1997) will take more than half of all mortgages next year. For the first time ever, Millennials’ share of mortgage originations will surpass 50 percent in the spring, outnumbering Gen X and Baby Boomers combined. The last generation to take more than half of all purchase originations was Gen X in 2013, just six years ago. Accordingly, other generations’ footprint will continue to contract, with Gen X and Baby Boomers taking 32 and 17 percent of mortgage originations respectively.

3) Home sales

Sales of existing homes declined in 2018 and through the first half of 2019, as tightening inventory squeezed first-time buyers. While sales experienced a slight rebound in the third quarter of this year, elevated by declining mortgage rates, the annual pace is likely to be flat at best. Demand for homes remains solid, with younger buyers continuing to vote with their dollars. However, as consumers indicated that they expect a moderation in economic activity in 2020, the housing market is likely to reflect the economic headwinds. Sales of existing homes are expected to decline 1.8 percent in 2020, as the continuing supply shortage and moderating price growth will hamper buyers and tamp down sellers’ expectations.

The decline in sales is projected to be accompanied by a flattening in price growth. With the supply of available homes continuing to balance on a tightrope, and the entry-level demand expected to remain strong, prices are estimated to tick up 0.8 percent in 2020.

4) Move to affordability

A dominant trait of this real estate cycle has been the renaissance of the urban downtowns. As younger generations returned to downtown cores, employers and developers responded by building offices, retail and housing in high-density environments. However, as the costs of development and construction rose, so did housing prices, especially given the propensity for builders to bring mostly high-end, luxury products to market. Over the past decade, demand for downtown living trended on an upward curve, driven by a desire for proximity, and lifestyle amenities, especially on the part of Millennials.

However, as Millennials matured and started families, their priorities shifted. With the oldest members of the generational cohort reaching 38 years in 2019, Millennials broadened their housing horizons beyond the urban core. As housing prices outpaced incomes by a wide margin, home buyers made a noticeable move toward affordability during the year. Large, expensive coastal markets—New York, Los Angeles, San Francisco—began experiencing net migration outflows, as buyers flocked to mid-sized cities, in search of quality of life and amenities at a more affordable price point.

The move to affordability trend will continue in 2020, fueled by the twin forces of Baby Boomers retiring and seeking sunnier weather, lower taxes and lower cost of living, and Millennials searching for family-friendly lifestyles and affordable housing. Home buyers are increasingly looking not only at suburban environments near large metropolitan areas, but also considering options across state lines. Cities in Arizona, Nevada and Texas will continue to benefit from shoppers looking for more affordable alternatives to California. Meanwhile, shoppers from expensive Northeast markets will find the warmer options in the Carolinas, Georgia and Florida attractive.

Millennial Mythbusters - 2020 housing market predictions - Realtor.com

Download full resolution images: [Millennial Mythbusters] [Full Infographic (15mb)]

What will 2020 be like for buyers?

Buying a home in 2020 will offer opportunities for some buyers, as the supply of new homes relieves some of the inventory pressures, and prices moderate. While the inventory of new homes in 2019 remained focused on the high-end, as the luxury market cools, builders signaled their intent to increase offerings in the mid-price segment, a much-needed shift in market dynamics. First-time buyers will continue to struggle with affordability, even with mortgage rates in an approachable range, as entry-level inventory is expected to remain constrained. The broad price moderation will continue to offer opportunities in mid-sized markets in the Midwest and South.

What will 2020 be like for sellers?

Sellers in 2020 will contend with flattening price growth and slowing activity, requiring more patience and a thoughtful approach to pricing. Sellers of homes priced for entry-level buyers can expect the market to remain competitive and prices to stay firm. At the upper end of the price range, however, properties will take longer to sell, and incentives will be needed to close deals. As the market moves toward a more balanced scenario, sellers who adjust to local market conditions can expect to benefit from continuing demand.

Implications for Buyers and Sellers - 2020 housing market predictions - Realtor.com

Download full resolution images: [Implications for Buyers and Sellers] [Full Infographic (15mb)]

Election will be 2020 wildcard

Political elections can have an impact on the economy and housing markets. While the outcome of elections is not directly tied to the performance of the markets, expectations linked to a party’s or an administration’s likely legislative or regulatory actions can sway confidence and decisions. When either party gains control of the legislative and executive branches, there’s a higher likelihood of seeing shifts in the rule-making process and the regulatory environment.

Looking at housing trends over the past three decades, the pace of sales, price and inventory are intertwined with economic performance—employment, wages, and interest rates. The outcome of elections does not weigh directly on trends in housing. However, business optimism and investments, along with consumer optimism and spending do influence economic output, and can also influence housing activity.

The 2020 elections will be closely watched by consumers and businesses for indications of potential changes. Along with the presidential election, there will be candidates running for 35 of the 100 seats in the U.S. Senate, along with 435 seats in the House of Representatives.

Article by Sr. Economist, George Ratiu

Jan. 8, 2020

5 Real Estate Pricing Myths Sellers Need to Know

When it comes to selling homes, the price is very often the “hot topic” whether you are the seller or buyer. The process involved in determining the appropriate listing price isn’t always what one might think, though.

In fact, it ultimately comes down to a position within the existing competition. Let’s take a moment to delve into some common misconceptions about pricing…

Overpricing isn’t a big deal since you can always lower the list price

No homeowner wants to leave money on the table. But starting with an unrealistic or overly-ambitious asking price isn’t the way to achieve the highest possible sales price for your home.

In fact, overpriced homes tend to linger on the market, making them harder to sell. And yes, you can always lower the list price but you should keep in mind that the largest pool of buyers sees your home within days of it hitting the market – and if you keep reducing the price, they may assume there’s something wrong with the property. Buyers also factor in market time when determining their offer price and what they perceive to be fair market value.

To generate maximum exposure and interest, it’s essential to price your home accurately during that critical “New Listing” period.

Your home is worth the amount you paid (or more)

Every market is different and trends vary block by block. The market shifts constantly which can lead to upward and downward price trends.  However, just because a high-level report shows an increase in pricing, it doesn’t necessarily mean that trickles down to every property.

While all homeowners wish to make a profit, it’s important to be mindful of pricing trends in your hyper-local market. In sum, what you paid for the home and the period of time you owned it do not necessarily impact the list price. As mentioned above, it actually comes down to how you are positioned (price-wise) among the current competition.

Your neighbor just sold their home for $X, so you can sell yours for $X too

Like we said, trends vary block by block – but even homes on the same block vary in price. Every home is unique, and beyond location, you’ll need to consider other property attributes such as features, condition, and other criteria that affect the price. Maybe one home has a finished basement and the other doesn’t, or one has 4 bedrooms and the other has 3 – these are all factors that go into pricing a home.

A lack of inventory means you can be aggressive with pricing

Supply and demand vary by location, product type, and price. If homes in your sub-market are flying off the shelf, you might be able to be more aggressive in your pricing strategy, but if you live in an area that doesn’t see a lot of activity, a more conservative pricing strategy will serve you better.

Renovation costs should be added to the price

While renovations can add value to your home and help your home sell faster, you shouldn’t automatically assume that you will recoup all the costs for home improvement projects (i.e. kitchen and bath remodels or a new deck). Consult a local real estate agent to learn which pre-sale renovations will maximize the value of your property.

At the end of the day, setting the right listing price right out of the gate is crucial when it comes to generating interest and top dollar for your home. So, if you’re a seller, how can you be sure to do that?

Here at @properties, we leverage our exclusive digital Comparative Market Analysis (CMA) tool, which helps determine the current value of your home based on factors like market activity and comparable properties. 

For more information on pricing or to receive your own CMA, click here.

Article by: Natasha O'Connor, January 2020

Posted in Thanksgiving
Dec. 18, 2019

2020 Home Design Trend Predictions

 

 

 

Whether you have a significant home project planned for the coming year, you’re looking to refresh your home with some design tweaks, or you’re updating your house to sell, selecting paint colors, decor styles, and new pieces can be overwhelming. Updating your home is important aesthetically, and also impacts the overall feel and function of the atmosphere. Get inspired to refresh your home for a new decade by incorporating 2020 design trends throughout the space.

 

Paint Color Trends

Invoking feelings of relaxation

Every year, the major paint retailers announce their colors of the year — the colors they anticipate will be prevalent throughout home design choices. The 2020 color choices share the same theme: tones that will make you feel relaxed, grounded, and restored at home.

Soft rose – Benjamin Moore’s Color Trends 2020 palette “delivers modern paint color pairings that combine optimism with understatement, a timeless way to lighten up.” Their color of the year is First Light, a soft rose hue that “reflects a new definition of the home – a shift in mindset from the material to satisfying the core needs in life: community, comfort, security, self-expression, authenticity and ultimately, optimism,” according to the retailer.

Rich navy — Sherwin-Williams’ 2020 Color of the Year is Naval, a rich navy hue that strikes a balance between calm and confident. As a versatile neutral, Naval creates a grounded space that ushers restfulness and tranquility into the home, according to the company.

Photo from Bit Home Design

“The use of color in interior design is changing. It’s not just about what a space looks like anymore, but how it makes you feel,” said Sue Wadden, director of color marketing at Sherwin-Williams. “People want to feel grounded and inspired to pursue their mental, physical and emotional well-being. Naval is reminiscent of the night sky, which people have looked to for centuries for guidance, as a muse and as a reminder to live more mindfully.”

Organic green — Behr’s 2020 Color of the Year is Back to Nature, an organic shade of green meant to purify and promote balance at home. “Back to Nature is a restorative and revitalizing green hue that engages the senses and pairs well with other colors both inside and outside your home,” according to the company.

Home Decor Trends

Investing in quality and bringing back the past

Invest in quality pieces — With a rise in direct to consumer companies, investing in quality furniture pieces at a lower price point is easier than ever. As the Marie Kondo effect continues to infiltrate our lives, buying fewer items of higher quality remains a theme that will carry into the new decade. Companies like Interior Define or Maiden Home sell beautiful, high-quality, custom furniture, at reasonable price points.

Ditch the accent wall — Whether it’s a single painted or wallpapered wall, 2020 is the time to expand the color or pattern to the remaining three walls. Leave the single accent wall in the previous decade and create a more cohesive and finished space by unifying the four walls. To boost the impact, extend color or pattern to the fifth wall, aka the ceiling. Painting or wallpapering the ceiling creates a jewel-box like effect and will make the space extra special.

Consider dark hues a new neutral — As Sherwin-Williams selected Naval as their 2020 Color of the Year, dark, rich colors will be used as a neutral in the year ahead. Pale grays and whites will step aside in favor of darker, cozier tones.

Photo from HOMIXOVER

Home Technology Trends

Controlling your home from your smartphone

Home automation — Automating your home isn’t going anywhere, and 2020 will see an increased prevalence of homes turning into smart homes. Whether you want to make sure your garage door is closed after you’re several miles away, preheat the oven on your commute home from work, or adjust the lighting based on when you plan on arriving home, the ability to control these tasks on a smartphone will become more mainstream.

Home Wellness Trends

Creating an atmosphere of wellness

Sparking joy through self-care — Self-care will continue to play an important role in the coming year. Home is the best place to put this into effect. Whether that is lighting candles, eliminating clutter, displaying fresh flowers, or investing in hygge-inspired throw blankets, the small details throughout the house are what can make the most significant impact on how you feel in your home.

WRITTEN BY DEANNA KANE

Dec. 18, 2019

What You Need to Know About Selling Your Home During the Holidays

The holidays are in full swing, and if you happen to be selling your home, there are some important themes to keep in mind.

Before you go all out with the tinsel and lights, here are some useful tips and suggestions for homeowners when listing during the busy holiday season.

Keep the holiday decorations simple

Dressing up one’s home for the holidays is a beloved tradition, however, it’s something that savvy sellers should be mindful of when listing their property for sale. And there are good reasons for it. One of the most important marketing tools when listing a house for sale is high quality photos, and holiday decorations add to visual clutter. Additionally, the photos won’t age well if the home is still listed for sale into the spring months. Meanwhile, during showings, you want to ensure buyers are focused on your home’s best features and not distracted by the decorations. So, save the inflatable snowman for next year and keep the décor tasteful and simple.

Winter landscaping still makes a difference

Weather patterns in the Midwest are notoriously unpredictable, meaning that it’s important to take advantage of the rare warm-ish, sunny days in the lead up to the January deep freeze. Whether it’s professional landscapers or a DIY approach, take the opportunity to clean up fallen leaves and dead plants to boost curb appeal and give potential buyers a good impression of your home.

Keep close tabs on an empty home during cold snaps

If you’re planning on marketing an empty house or heading on vacation, make sure that someone is available to keep an eye on your property, whether it’s a neighbor or your @properties listing agent. Midwesterners know well the havoc that frigid temps can wreak on an empty home. Check in on the heating system and keep the thermostat at a reasonable temperature to prevent frozen pipes.

Price your home accordingly

Buyers who house hunt during the holidays are often in a position where they need to move sooner rather than later. And pricing your home correctly is a critical component of capturing the interest of those serious buyers. Remember that an overpriced home can scare people off, so it’s important to be priced properly from the beginning. Your agent is your best resource to help with analyzing local market conditions and developing a price point strategy for listing.

Take the pressure off yourself

No matter what anyone says, selling a home can be an emotionally taxing endeavor. Lean on your agent when needed to help take some of the burden off your shoulders. The timing is about you and what makes the most sense in your situation. As the largest local brokerage in the Chicago metro area, @properties and its vast network of agents are marketing pros with the knowledge and can-do attitude to get your home sold, freeing up sellers to focus on enjoying the holidays and moving forward with their next real estate endeavor. 

WRITTEN BY AJ LATRACE

 

Dec. 11, 2019

Top 25 Most Expensive Homes In Chicagoland

After releasing our traditional year-end report of the 100 most expensive zip codes in the U.S., we were curious about the priciest zip codes this year in the Chicago area, as no Illinois zips ranked among the nation’s top 100.

In order to accurately rank the most expensive zips in Chicago and its inner suburbs, we analyzed residential sales that occurred between January 1, 2019, and November 22, 2019, calculating the median sale price for each zip code. Because of two ties, our ranking actually includes 27 zips. For the purposes of this study, we defined the Chicago area as the City of Chicago and its inner suburbs, covering Cook and DuPage counties.

The North Shore Remains Unbeatable

As expected, communities outside of the boundaries of the City of Chicago proper claimed the top spots, especially communities from the North Shore. Of the 10 most expensive zip codes in the Chicago area, six are located in North Shore communities and three are western suburbs. The City of Chicago itself barely claimed its sole top 10 spot with The Loop’s 60603 coming in at #9.

At a median sale price of $1.24 million, Kenilworth’s 60043 was the #1 most expensive zip code in the Chicago area again; 60043 was also the sole zip code in Illinois to surpass the million-dollar mark this year, despite posting a somewhat lower price than it did two years ago. Specifically, Kenilworth’s median was 4% lower this year than in 2017.

Another North Shore community claimed the next position with Winnetka’s 60093 ranked as the #2 most expensive zip code in the Chicago area in 2019. Unlike Kenilworth, Winnetka’s 60093 was on the rise — its median expanded nearly 13% over 2017 figures. As a result, Winnetka climbed from #4 as other North Shore communities’ medians contracted at a sharper rate. Glencoe’s 60022 and Golf’s 60029 were the second and third priciest Illinois zips in 2017, but, in 2019, both slipped off the podium as their medians declined by 7% and 15%, respectively.

The drops in Glencoe’s and Golf’s medians also helped Hinsdale climb in our ranking, compounded by an 11% expansion of its median sale price. As such, Hinsdale’s 60521 became the #3 most expensive zip code in the Chicago area in 2019 with a median sale price of $850,000. Hinsdale’s 60521 also ranks as the most expensive zip outside of the North Shore, as well as the priciest DuPage County zip code. Hinsdale was joined in the top 10 by Western Springs’ 60558, the #8 priciest Chicago area zip with a median sale price of $574,000.

The Loop Is Home to the Most Expensive Chicago Zip

Similar to the dominance of the North Shore was the abundance of Cook County zips in terms of sheer numbers. Of the 27 zips ranked, 23 were from Cook County and only four were from DuPage County.Of the four zip codes that DuPage County landed in the top 25, one was among the 10 most expensive Chicago area zips in 2019.

The City of Chicago claimed 10 spots with 12 zips (due to two pairs of ties) among the 25 most expensive zip codes in the Chicago area this year. Most of these placed in the bottom half of the rankings; only one Chicago zip code ranked among the 10 most expensive in the area. With a median sale price of $570,000, The Loop’s 60603 was the #1 most expensive Chicago zip code in 2019 and the #9 most expensive when looking at the entirety of DuPage and Cook counties.

The next Chicago zip code to rank in our top 25 was 60614 at #11. Covering areas like Lincoln Park, Old Town Triangle, DePaul University, the Clybourn Corridor shopping district and even reaching into Bucktown, 60614 ranks as the #2 most expensive Chicago zip code with a median sale price of $505,000. In fact, the North Side zip code registered a negligible 1% uptick in its median compared to 2017 figures, allowing The Loop’s 60603 to surpass it with a 15% increase.

Chicago’s #3 most expensive zip code in 2019 was 60622 with a $485,000 median sale price. Covering Wicker Park and Ukrainian Village, 60622 registered a 5% uptick in its median over 2017 figures, further distancing itself from Downtown Chicago’s 60604, the city’s #4 most expensive at $449,000.

Explore the table below for the full list of the top 25 most expensive Chicago area zip codes in 2019:

Methodology

To determine the most expensive zip codes in the Chicago area, we looked at residential transactions closed between January 1, 2019, and November 22, 2019, taking into account condo, co-ops, and single- and two-family homes in Cook and DuPage counties. All package deals were excluded.

For an accurate representation, we considered only zip codes that registered a minimum of three residential transactions.

Due to a number of ties, 27 zip codes made it into our top of the 25 most expensive Chicago area zip codes in 2019.

Median sale prices were rounded to the closest $1,000.

By Eliza Theiss

Dec. 11, 2019

Will Inventory Evaporate in 2020

At a time when millennials are reaching key life milestones, the U.S. housing market will continue to slow in 2020 as inventory reaches historic lows and economic uncertainty prompts consumers to pull back on their spending, according to the realtor.com® 2020 housing forecast released today. 

The forecast predicts that despite some relief from new construction, moderating home prices and relatively low interest rates, first-time buyers will continue to struggle with affordability. Sellers will contend with flattening price growth and slowing activity. These trends will drive existing home sales down 1.8 percent to 5.23 million.

 

Realtor.com® 2020 forecast include:

  • Home prices will flatten, increasing just 0.8 percent nationwide. Prices will decline in more than 25 percent of the 100 largest metros, including ChicagoDallasLas VegasMiami and San Francisco.
  • Inventory shortages will prevail and could reach historic lows, especially the entry-level category.
  • Mortgage rates will remain reasonable, averaging 3.85 percent throughout the year.
  • Affordability will remain a key driver for buyers, benefitting mid-sized markets.
  • Millennials – with the oldest members approaching 40 and the biggest cohort turning 30 in 2020 – will surpass 50 percent of all home purchase mortgages.
  • With little incentive to sell, baby boomers will continue to hold onto their homes, while Gen X is more likely to upsize, freeing up some entry level inventory.

"Housing remains a solid foundation for the U.S. economy going into 2020," said George Ratiu, senior economist at realtor.com®. "Although economic output is expected to soften – influenced by clouds of uncertainty in the global outlook, business investment and trade – real estate fundamentals remain entangled in a lattice of continuing demand, tight supply and disciplined financial underwriting. Accordingly, 2020 will prove to be the most challenging year for buyers, not because of what they can afford, but rather what they can find."

What will 2020 be like for buyers?
Buying a home in 2020 will be a mixed bag. It will offer more opportunities for some as the supply of new homes begins to offset inventory pressure that has built over the last four years, interest rates remain reasonable and home prices flatten. The broad price moderation will continue to make mid-sized markets in the Midwest and South attractive. However, the construction of new homes in 2019 was largely isolated to upper-tier of housing and that is unlikely to ease conditions for first-time homebuyers. Additionally, while qualifying for a mortgage could be easier on paper due to stabilizing prices and a still relatively low rate environment, the total number of homes available for sale will hit a record low.

What will 2020 be like for sellers?
Sellers in 2020 will grapple with dormant price growth and slowing activity, which will require a greater level of patience and a thoughtful approach to pricing. Entry-level home sellers can expect steady competition for their homes, which will keep prices firm. Upper-tier housing is expected to be softer as properties will likely sit on the market longer, requiring greater incentives to close deals. As the market moves toward a more balanced scenario, sellers who adjust to local market conditions can expect to benefit from continuing demand.

Forecasted key 2020 housing trends

  • Millennials expand their domination of the market – Demand from those born between 1981-1997 will reach new highs in 2020 with millennials accounting for more than 50 percent of all mortgages by the spring. Several factors are at play here. In 2020, the largest cohort of millennials – 4.8 million of them – will turn 30, a time when many purchase their first home, while the oldest members of the generation will reach 39, often a point when many look to move from the city to the suburbs for family-friendly amenities. The largest generation in history will consolidate their top spot in mortgage originations and effectively outnumber Gen X and baby boomers combined in their share of purchases.

  • Growing economic uncertainty – Although a recession isn't likely in 2020, the economy will show signs of softening. The pullback in business spending is expected to lead to a slowdown in consumer spending. Housing remains the largest single consumer expense, making home-buying activity a major contributor to the U.S. economy and a bellwether for economic expectations. Rising uncertainty about the economic outlook will dampen consumer enthusiasm about spending, leading to a decline in sales and an increase in homeowners' tenure.

  • Low inventory – Despite increases in new construction, next year will once again fail to bring a solution to the inventory shortage that has plagued the housing market since 2015. Inventory could reach a historic low as a steady flow of demand, especially for entry level homes, and declining seller sentiment combine to keep a lid on sales transactions. With housing prices expected to stabilize and concern over economic uncertainty, there will be little incentive for baby boomers to sell in the coming year. The younger Gen X is more likely to upsize and free up entry level homes, but not fast enough to ease inventory woes.

  • Affordability brings secondary markets to the center stage – As buyers are priced out of suburban environments near large metropolitan areas, they will begin searching for family-friendly lifestyles in other metros or across state lines. Cities in ArizonaNevada and Texas will continue to benefit from shoppers looking for more affordable alternatives to California. Meanwhile, home seekers from expensive Northeast markets will find the warmer options in the Carolinas, Georgia and Florida attractive. Midwest markets will become more attractive, as buyers will find the affordable housing and solid, diversified economies of OhioIndiana and Kansas compelling.

  • Election will be 2020 wild card – Along with the presidential election, there will be candidates running for 35 of the 100 seats in the U.S. Senate, along with 435 seats in the House of Representatives. The 2020 elections will be closely watched by consumers and businesses for indications of potential changes. Although the outcome of the presidential election is not directly tied to the performance of the housing market, business optimism and investments, along with consumer confidence and spending do influence economic output, and can also influence housing activity. Looking at housing trends over the past three decades, the pace of sales, price and inventory are intertwined with economic performance – employment, wages, and interest rates.

 

Area

Sales

Price

United States

-1.8%

0.8%

Realtor.com® 2020 Housing Market Forecast

 

 

Mortgage Rates Up to 3.88% by year end
Existing Home Median Price Appreciation +0.8
Existing Home Sales -1.8%
Single-Family Home Housing Starts Up 6%
Homeownership Rate 64.6%

   

         

Sale and Price Forecast 

Area Sales Price
United States -1.8% 0.8%
Chicago-Naperville-Elgin-Indiana - Wisconsin -0.9% -0.3%

 

 

Area

Sales

Price

United States

-1.8%

0.8%

 SOURCE realtor.com

Dec. 4, 2019

Where To See Santa In Kane County: 2019 Area Santa Events

Santa will make several stops throughout Kane County this season.
Santa will make several stops throughout Kane County this season. (Shutterstock )

KANE COUNTY, IL — Santa is making stops throughout Kane County as Christmas festivities kick off in the area Friday as soon as the turkey and stuffing are put away.

After these town tree lighting and holiday kick off events, get ready for several Santa visits across Kane County. Patch has compiled a list of where to bring your little ones to meet the man in the big red suit:

RELATED: 2019 Holiday Festivals, Parades, And Santa Visits In Kane County

Nov. 27, 2019

Five Things to Do During Thanksgiving Break in Chicago

Old Man Winter arrived in the Chicago area early this year — certainly well before friends and relatives show up for Thanksgiving celebrations. But holiday visitors will quickly learn that Chicagoans won’t let the bitter windchill stop us from enjoying ourselves. There’s always a lot to do in the City of Big Shoulders, so grab your heavy winter coat, lace up those boots, and consider these favorite activities during Thanksgiving break.

 

Sip Gluehwein and Snack on Schnitzel at Christkindlmarket

The Christkindlmarket, a German-style Christmas market that takes over Daley Plaza during the early winter months, is a beloved annual tradition among locals. Find unique handmade ornaments and decorations for your holiday tree and warm up with gluehwein, a traditional mulled wine drink which originated in southern Germany. Enjoy live music in the food tent and keep an eye out for Christkind, the German Christmas fairy.

Make New Friends at a Wrigleyville Bar Crawl

Need to take a break from visiting friends or relatives at some point? Hey, it happens. That’s just one reason the Turkeycrawl in Wrigleyville exists. Running all evening the night before Thanksgiving, the group will stop at numerous establishments throughout the neighborhood (the crawl schedule won’t be released until November 26). A ticket purchase is also good for entry to other weekend festivities and events in River North.

Shop and Take in the Views Along the Magnificent Mile

A perennial favorite among tourists and visitors, the upscale shopping and historic architecture along North Michigan Avenue is truly magnificent. Some recent arrivals worth visiting include the glassy, gravity-defying Apple flagship store and the brand-new four-story Starbucks roastery and cafe. Stop by the old John Hancock Center (which has been formally renamed simply 875 North Michigan Avenue) to get a bird’s eye view of downtown and Lake Michigan at the 360Chicago observation deck.

Relax and Watch the Bears Take the Lions

Hungry for some football? Find a cozy spot to relax and watch the Chicago Bears play against the Detroit Lions on Thanksgiving day. Kick off is at 11:30 a.m., and the only thing more satisfying than a (hopeful) Bears win is a Thanksgiving feast to cap it off.

Lace Up Your Skates and Go Ice Skating

Take your guests down to Millennium Park’s McCormick Tribune Ice Rink or the nearby ice skating ribbon at Maggie Daley Park, where skaters can glide through a path that’s twice the length of a lap around a typical rink. As you take a spin around the ice, you’ll be treated to some great skyline views. Admission is free and you can rent skates at both locations.

 

WRITTEN BY AJ LATRACE