Let’s talk for a minute about “not normal.” Sometimes not normal can be scary, like when your teenage daughter brings home the bass player from a Norwegian heavy metal band.
But not normal can also be a beautiful thing.
Recently, a few seemingly unwitting patrons in New York City bought paintings by the renowned graffiti artist Banksy for a couple hundred dollars each. The paintings are believed to be worth over $100,000.
In real estate, too, not normal can be scary or beautiful.
But getting comfortable with the idea of not normal can shine a light on unique opportunities that otherwise go unnoticed.
While today’s real estate market is well along the path back to normal, there are still a number of anomalies that buyers or sellers can use to their advantage.
A normal level of housing supply is 6 months. Currently, supply across Chicagoland is just 4.3 months. That means sellers currently face about 30% less competition than they would find in a typical market.
The average 30-year mortgage rate since 1990 is 6.72%. Today’s 30-year mortgage rate is 4.38%. We have gotten so used to abnormally low borrowing costs that many people take little notice of the monumental opportunity arising from this deviation.
Rent vs. Own
Trulia.com’s latest Rent vs. Buy Report estimates that it’s about 36% cheaper to own than to rent in the Chicago area. This major discrepancy in housing costs should make any prospective homebuyer (or landlord) take notice. Learn more about the Rent vs. Buy Report in this month’s Market Minute video.
While each of these current dislocations opens doors for certain buyers and sellers, they won’t last forever. We can count on mortgage rates, inventory, prices and other measures of the housing market and economy to eventually return to historic trend lines.
So embrace not normal…unless, of course, his name is Sven, he’s 6’4″, and he’s wearing white face paint and spiked wrist bands.
If you’re thinking about buying or selling, or looking for more information on your local market, contact your @properties agent.