Despite a slow start, 2014 is proving to be an eventful year for housing. Here at @properties, we’ve been keeping a close watch on local market conditions, and all signs point to a very busy second half of the year. Let’s take a closer look at some first half highlights and what to expect this summer and fall:
- Transactions: While overall home sales have decreased on an annual basis, sales of non-distressed properties in the Chicago area jumped 12 percent through the first half of the year, a sign that fewer homeowners are underwater. Pending home sales – which are based on signed contracts – have also risen significantly in the last couple of months. The market has finally hit its stride after getting off to a slow start this spring.
- Home Prices: Chicago-area home prices continue to appreciate, though at a slower, more sustainable pace. Annual appreciation, which was clocking double digits throughout 2013 and early in the year, tapered to 6 percent in May and 4 percent in June. Sellers take note: While we anticipate strong second-half sales activity, we also expect a continued leveling off of prices.
- Inventory: The number of homes for sale continued to decline during the first half of 2014. Months’ Supply of Inventory was just 4.9 months in June 2014, down from 5.4 months the year before and still well below a balanced supply of 6 months. However, there are signs the tide is turning. In June, new listings within @properties were up significantly year-over-year.
- Market Times: Homes are selling more quickly this year thanks to strong buyer demand and low supply. In fact, the average market time in the Chicago area fell to 101 days through the first half of 2014, compared with 127 days for the same period last year.
- Interest Rates: The Fed’s announcement that it would end Quantitative Easing didn’t have the immediate impact on mortgage interest rates that many people expected. Still, with the 30-year mortgage below 5 percent since early 2010, most experts agree there’s only one direction rates can go: up. Homebuyers should act quickly and take advantage of this unprecedented period of record-low mortgage rates.
We’re confident about where the market is heading the second half of 2014, and you should be too. If you’re thinking about buying or selling, or looking for more information on your local market, contact your @properties broker today.