It’s August in Chicago. And that means it’s hot. But when it comes to housing in Chicago the words "hot" and "real estate" rarely appear in the same sentence. Nevertheless, in deference to summer, we’ve come up with a list of what really is hot in the city real estate market. And believe it or not, we filled the page without breaking a sweat.
Low Interest Rates
In June, 30-year mortgage rates averaged around 4.75%. Less than 60 days later, the average rate on the 30-Year Fixed has dropped below 4.5%, its lowest level since Freddie Mac began surveying rates back in 1971. That’s not hot; that’s scorching.
Skip a Step
Low prices and the prospect of slow appreciation have many buyers taking a longer-term view of their home purchase. Buyers today are thinking about how the home they buy will meet their needs five to 10 years down the road versus the three- to five-year window that was common during the boom. As a result, many buyers are skipping a step on the housing ladder and purchasing larger homes they can grow into.
New Construction Deals
Price cuts and special financing programs have been effective in whittling down excess new-construction inventory in several areas including River North, the West Loop and the Loop. By the end of next year, new construction in these neighborhoods should be largely absorbed, with no new product scheduled to come online. Translation: if you like new, your time is now.
Buyers today are approaching the market not only with more information but also with a totally different psychology. The focus is on location and space, and value is the watchword in every price range from $200,000 to $2 million. If you’re selling, be prepared to demonstrate that your home is the best in its class, because today’s astute buyers won’t settle for anything less.
Putting Down Roots
A large home, in good condition, near top-rated city schools is suddenly attainable for the first time in years. That’s causing many homebuyers to rethink typical suburban migration patterns and put down roots in the city. And the neighborhood improvements that can result from long-term investment might just be one of the most positive outcomes of the housing bubble. That’s hot…and very cool.
Buying, selling or just looking for more information — I welcome the opportunity to help. And please remember that referrals are always hot.