The market is hot right now. Sizzling hot. Ask any real estate professional and he’ll tell you the activity level is amazing. And it’s not just remarkable by the depressed standards of the past few years. The market is booming even by healthy market standards.
Using broad numbers for the city of Chicago we can see some terrific gains. The number of days properties spend on the market before going under contract are oft-reviewed indicators as to how deep the inventory is. If we snapshot a month’s worth of inventory in the city, the DOM (days on market) number is down year over year from 2011 to 2012 by almost 19%. The inventory of homes for sale over the same period is down over 43%. The median sale price is up more than 19%.
When we look at national numbers we see similar progress. In 2012 total home sales increased 6%, the first increase since 2005. Non-distressed home sales increased 11%, an important number to note given that in the context of the tight supply of unsold homes, the non-distressed sales were strong drivers of home prices in the past year. REO sales, the bank-owned inventory, were down 20%, the third consecutive annual decline.
So for those who’ve been waiting to get into the market either to buy or to sell we offer this advice: Proceed. Proceed optimistically and confidently. But proceed with caution.
Interest rates will have to start ticking up. Inventory will have to be released in order to meet the demands of an increasingly anxious buying population. The current activity level has bordered on a frenzy in some cases – we just got 25 offers on a 2-Flat in the city – something that’s certainly over the top even in a healthy market.
Some may be relieved and excited, as are we. We have all been working hard over the past several years to cure the ails of our industry and to begin a rise back into healthy, sustainable market conditions. A slow simmer has been required, and it appears we are beginning to reap the benefits of our patience. Now, it will be important for everyone in the marketplace, agents, buyers, sellers and lenders, to exercise intentional restraint, to be careful stewards of this next generation of home sales. We’re cooking, no doubt. But we don’t want to burn. We’ve all been through that and it’s no fun.
So get out there – get shopping, get selling – the market is incredible right now and you’ve waited long enough. Just remember to move forward with care and, whenever possible, employ the counsel of professional real estate advisors to help you make the best choices for your situation.
For information on how we can assist you navigate the current market, please contact us on 773.457.2495 or 773.457.2043. For all of your real estate needs, we are here to help.