The real estate market is showing signs of normalizing, with inventory rising on a monthly basis and home prices moderating. Despite rising mortgage rates and higher prices, buyer activity remains high as demonstrated by the drop in the days on market. This is a great time to sell a home. Most homes in Illinois only last 3 weeks on the market before they sell.
The forecast for home sales by the Stuart Handler Department of Real Estate at the University of Illinois at Chicago is calling for increased sales and prices over the next 3 months. For once, the Chicago area is expected to beat the national market. Fannie Mae forecasts national home sales to fall -13.5% to 5.96 million units in 2022. Overheated markets like Boise, Idaho are set to decline from their Elysian heights. Markets that have seen slower price growth, like Chicago, are expected to continue to grow. The Illinois Association of Realtors is forecasting prices in Chicagoland to grow around 5% for the remainder of the year. This is a healthy pace compared to the 20% annual growth we have been experiencing.
In spite of inflation at 9.1%, the US economy shows an amazing resilience, adding 372,000 jobs in June as employment reached pre-pandemic levels. Wages climbed a robust 5.1%. Rising interest rates, increasing commodity prices, especially gasoline, supply chain issues, and the uncertainty created by the war in Ukraine are all dragging on the economy. Recession fears are supported by an inversion in the yield curve and revised Q2 Gross Domestic Product projections. However, the two drivers of the real estate market are robust post-pandemic household formations combined with low housing inventory. These dynamics are likely to keep the housing market growing for the foreseeable future.
When times are uncertain, you need a professional in your corner. If you are thinking of buying or selling a home call us for a free analysis.