There are many stages in life where the mindset of temporary housing or a rental phase makes sense. However, Chicago home sellers should know that while it would have previously been the norm, these people are now more focused on finding permanent housing situations and increasing the number of buyers competing for homes in the real estate market Chicago. Part of this drive may be due to many company’s business models rolling over into home-based work. Another phenomenon that has come to light, more wealthy investors are updating their investment plans to move with the market, making their second home purchases for retirement earlier than previously planned, increasing the shortage of available properties on the market.
Riding the Wave
Like a wave still rolling from the 2008 national trend of slowing new housing production, the backlog of completed units has yet to be met, let alone the surge in demand that has emerged since the pandemic. Low-interest rates are also pushing buyers into the market that may not have otherwise been able to afford as much housing. There is also a migration of buyers from high-tax states brought on by changes in federal tax guidelines, which means they can no longer write off their property taxes.
The National Association of Realtors reported in October of 2020 that there were fewer homes for sale now than ever. If no other homes were listed on the market starting now, there is just over a two-month supply of inventory available. There has also been a stall in the number of homes listed by sellers that would typically be making an upward move in housing, such as moving up from a starter home. Many homeowners choose to stay in place to see how they are involved and settle out before risking what they have in place. These factors have combined to create an epic seller’s market, with the surge in demand and shortage of housing units available, causing prices to soar. Read on to discover what Chicago home sellers should know about the real estate market in Chicago.
The Trouble With Bidding Wars
While a seller’s market may sound like a perfect scenario, Chicago home sellers should know that bidding wars affect the real estate market in Chicago. The problem comes when buyers bid above the amount the home will appraise while remaining below the typical 80 percent of the loan to value the mortgage. There is a potential to lose your buyers, should they find themselves in a bidding war. They may not have the finances to afford the higher monthly payments and a higher principle, let alone the additional cost of mortgage insurance. And may not have enough cash on hand to cover any shortage between the appraisal and the final purchase price.
What Goes Up Must Come Down
All good things come to an end. Housing prices had already begun to trend upward before the pandemic and continue to rise. Under the current conditions, most first-time homebuyers facing the rapid jump in listing prices cannot afford the average home. Chicago home sellers should be acutely aware that the current rising price trend on the real estate market in Chicago cannot continue indefinitely, and the real estate market may crash. Indicators are that foreclosures, which are on hold now, will rise among lower-income households. Around 2.75 million mortgages are in forbearance under the CARES act’s protection at this time, with approximately 10 percent of all FHA-backed mortgages more than three months behind on payments.
Avoiding the Risks of Selling
Avoiding selling for too long may mean that sellers miss out on this rare opportunity to strike while the market is at or near its peak. When it comes to traditional listings, a significant number of people simply do not want to take the risks of meeting with strangers to negotiate or do business. Many would prefer not to have showings during the pandemic because of potentially ill buyers walking through their homes. With stress already at an all-time high for many, the mere thought of the additional pressures of selling a home, especially when school and work are home-based, is too much to consider. Chicago home sellers should know that there is another way to sell their home on the real estate market in Chicago, by selling to a direct buyer like Sell Today Homebuyers.
Ready to learn more about what Chicago home sellers should know about the real estate market in Chicago? At Sell Today Homebuyers, we are here to listen and help you handle all of your problems. With fair prices, straightforward easy to understand contracts, and quick closings. Working with Sell Today Homebuyers means there’s no need to delay selling any longer! Sell Today Homebuyers will walk you step by step through the process and help you determine what is best for you! Send us a message or call Sell Today Homebuyers at (630) 984-0000 today!