For those of you that are thinking about buying or selling in spring, I’m going to give you a sneak peek on how I think this upcoming spring market will play out.
Just to touch on some important items first. Currently interest rates sit around 7.5% for a 30 year fixed rate conventional mortgage. Also, the economy is holding up well and does not look like the Federal Reserve will be increasing interest rates anytime soon as the stock market is pricing in only a 15% probability of a rate hike in December.
For the Chicagoland real estate market, inventory in November of 2023 vs November of 2022 was down 27%. Prices rose 7.6% and closed sales are down 17%.
Our MLS data goes back to 2008 and inventory has never been as low as it is now and it will bottom out in January or February as it does every year. We still have a couple more months of inventory decline until we get to March which is when we enter the “spring” market. The graph below shows the ups and downs of inventory each year.
I would fully expect this spring to be robust for home sellers and another frustrating one for home buyers. March is when we see demand pick up materially and supply is coming off the low point of the year. That will likely lead to multiple offers and prices escalating again.
If you’re a buyer now, I would use this slower time during the winter market to try and find a home. Showing activity is at its lowest point in December and the sellers that are listed are, typically, more motivated during the winter months because showing activity is less and general news about the real estate market is cooler than during the robust spring and summer months. Once we enter March, depending on the weather, you will likely see your negotiation leverage be thrown out the window.
If you’re a seller right now, there is a high likelihood that if you wait until March, the market will be much more favorable for you to get your price and terms.
I’ll be hosting a seminar on February 8, 2024 at the Community Recreation Center (CRC) in Schaumburg. Sign up by clicking here if you’d like to get insight on the real estate market right before the spring market unfolds.
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