Competition Heats Up In City Market
Welcome to the @properties Monthly Newsletter – Training Camp Edition.
While one Chicago team is breaking camp in final preparations for the regular season, your @properties team is also game-planning for what promises to be a very interesting fall market.
The local real estate landscape is shifting, with price appreciation tapering and inventory levels finally on the rise after months and months of declines. Interest rates are still tantalizingly low, but no one knows for how long.
If buyers and sellers are going to make a move, it feels like fall 2014 is the time to do it. But like a Marc Trestman offense, the market keeps us guessing. At @properties, we do what any good coaching staff would do. We prepare and prepare and prepare. And we advise our clients to do the same.
Following are some key projections for the season ahead:
Competition This Fall Will Resemble A “Black And Blue Division” Rivalry
The supply of homes for sale in the Chicago area rose 5 percent in June compared to last year, according to the National Association of REALTORS, which means sellers are likely to encounter more competition than in recent months. Ironically, the additional inventory may provide little relief to buyers who grew so frustrated with the dearth of listings this spring they chose to wait until market conditions improved before resuming their search. They’ll be back on the field this fall and ready to pounce, so if you’re a buyer, it’s critical that you’re educated on the market and your financing is in order.
Resist the Hail Mary
It’s tempting, given the price increases of the past 18 months, to uncork the proverbial end zone heave, i.e. toss out an overly ambitious list price in the hopes that someone out there will take a flyer. Resist the urge. Appreciation has tapered considerably with home price growth at its slowest pace since 2012, according to NAR. Even in some prime Chicago neighborhoods pricing is still 10% below peak levels and areas on the fringe are off even further. The fall market also provides a shorter window than spring – and thus a smaller margin for error in terms of setting a proper list price. If you’re serious about selling in 2014, a more conservative ground attack is in order. Buyers will also do well to avoid their version of the Hail Mary (aka the low-ball offer) if they want to score prime real estate this fall. With the market operating efficiently, it doesn’t make sense to waste a down on a trick play.
Be Willing to Call An Audible
If there’s one thing the market has taught us over the last six years, it’s to expect the unexpected. None of us is smarter than the market, but we can make preparations to deal with the market, even as it shifts like a receiver in motion. At @properties, we have cutting-edge tools like the @gent app that allow us to get real-time feedback on local market conditions and make adjustments on the fly. If you’re selling that might mean making a few cosmetic changes to your home based on current design trends or taking marketing photos early in the season (like now) while the landscape is still green. If you’re a buyer, it’s critical to be swift and decisive when negotiating an offer.