The prices of houses in Chicago have gone up only slightly in the past year and recent expert predictions indicate that there could be a small increase in the next year.
All of this comes together to create a housing market that might just favor buyers in 2019 and 2020. In this article, we’ll provide an overview of the housing market in Chicago, the factors that are causing a shift in favor of buyers, and why this may be a good time to buy.
Chicago Sees A Rise In Real Estate Construction
The metro area in Chicago is one of the biggest across the country. There’s a very dense population here and plenty of housing up for sale. In the past year alone, Chicago has seen some of the largest growth in new home construction compared to other major cities.
Altogether there’s been around a 60% increase in new real estate development between February 2018 and February 2019. With a vast amount of new properties under development, there is now a strong inventory of existing homes for sale.
The increase in construction and the availability of houses for sale means that Chicago has a ready supply of real estate inventory. With inventory to supply, it naturally puts the ball more into the buyer’s court. There are many options available for potential buyers which provides you with more choices than ever before.
Lack Of Population Growth in Chicago
One of the reasons that a lot of housing markets tend to drift in favor of sellers is because of the increase in population. As the population rises, the demand for homes goes up. Therefore, you have a simple case of supply and demand. If the demand is high the prices can be set higher in favor of the seller.
The population in Chicago has remained relatively flat with the most recent survey stating that in April 2010 to April 2017 we saw a growth of just 0.8%. To put this figure into context, the country’s population went up by 5.5% in the same time. But, of course, not all areas of the country are growing and the population can wax and wane. Big cities such as New York and Los Angeles have also experienced a drop in population too.
When you combine the lack of population growth with the new construction and the existing supply of housing, you have the perfect recipe for a buyer’s market. There’s plenty of inventory to supply and it’s increasing.
Favorable Mortgage Rates
Chicago mortgage rates are considered to be some of the most competitive in the United States. Not only that, but national mortgage rates are at the lowest they’ve been in years. And to add to this, the Federal Reserve announced in January that it has no plans to raise the interest rates this year.
The reasoning behind this decision is mainly down to concerns over the potential slowing of the economy so this actually works in your favor. If the interest rates are lower, you can finance your home with at a desirable rate. And if you choose a fixed rate mortgage, you can keep that low rate for the life of the loan.
As a leading Chicago mortgage company, we’ve seen a rise in mortgage applications throughout 2019. It’s no coincidence that this comes when the average rate for a 30-year fixed mortgage is hovering around 4.25%.
Naturally, favorable mortgage rates help create a buyer-friendly housing market. You can now get a more affordable mortgage and buy the home of your dreams.
Why Do Some Homes Take A Long Time To Sell?
When there are a growing population and a high demand for property, homes tend to sell very quickly. But, what do you think happens when the population isn’t rising? You end up with a lot of homes that are on the market for months before they’re sold. When this happens sellers become more desperate the longer a house takes to sell. As a result, the power is in your hands as a buyer.
On the contrary, when a house sells quickly, it’s a seller’s market. As the buyer, you’re desperate to find a home but all the good ones are selling before you get a chance to make a bid. In this case, the prices go up as sellers see the demand so you’re more likely to bid higher than usual to keep away the competition.
Now May Be The Perfect Time To Buy A Home In Chicago
Are you actively looking to buy a home in Chicago? Now may be the perfect time to do so. The local housing market is in favor of the buyer because:
- Chicago mortgage rates are favorable
- There’s plenty of real estate options available
- The population is stagnant, meaning the house prices aren’t rising
- The market is slow, so you have the upper hand
If you are planning on buying a house, then you’ll need to spend a lot of time searching for a mortgage lender. You’ll want to find Chicago mortgage company that offers exceptionally competitive rates. So as a result, you’ll have a more affordable mortgage.
With the mortgage rates in Chicago being so low, it’s a great time to invest. There is no shortage of housing options and there’s not as much competition compared to other cities. Plus, with a solid business environment and new housing developments, more people will be enticed to move here.
By buying when the market is slow and house prices are favorable, you have the opportunity to earn a significant return on your investment when you sell your home in the future. This makes it an even better reason to buy.
Overall we want you to understand that the housing market in Chicago is starting to favor buyers and now is a great time to purchase a home. So if you are thinking about buying a house in Chicago then consider talking with one of our mortgage specialists today. This way you can buy the home of your dreams before the market starts getting more competitive and shifts back in favor of sellers.
A and N Mortgage Services Inc, a mortgage banker in Chicago, IL provides you with high-quality home loan programs, including FHA home loans, tailored to fit your unique situation with some of the most competitive rates in the nation. Whether you are a first-time homebuyer, relocating to a new job, or buying an investment property, our expert team will help you use your new mortgage as a smart financial tool.