Chicagoland housing market is coming to lifeDate posted: 3/2/14 11:30:00 AM
Chicago is known as the Second City to some, but following the crash of its housing market in the mid-2000s — which led to disappointing numbers in both Chicago's local economy and home-sales figures — it wouldn't come as a surprise if Chicago was referred to as the Second-To-Last City in real estate circles.
While cities such as Los Angeles and San Francisco experienced robust home-price gains in recent years, Chicago sales numbers and home values grew lethargic. However, that might not be the case much longer, according to the Chicago Tribune.
Home sales and median values in Chicagoland finally made major strides in 2013, and that's sparking optimism among economists and industry insiders.
"The year 2013 was a good one for the housing market and the prospects for the early part of 2014 appear equally positive," the University of Illinois' Geoffrey Hewings told the Chicago Sun-Times. Hewings is the director of the Regional Economics Applications Laboratory at the Champaign-Urbana campus.
Last year was the best year for home sales in the Windy City since 2006. Sales surged 23 percent from 2012 to 2013, with the sales of single-family homes and condos jumping to 111,427, according to the Illinois Association of Realtors.
That's the first time since 2006 that home sales in Chicago raced past the 100,000 mark. Sales in 2013 weren't far behind 2006's pace, either. That year beat out 2013 by only approximately 5,000 closings, with more than 116,000 homes selling.
Closed sales in the city itself, not including the surrounding suburbs, snowballed 21.2 percent year over year in 2013. The median price of homes increased 19 percent during that period, helping many Chicago homeowners resurface from underwater mortgages.
Homeowners in Chicagoland who recently emerged from the troubles of an underwater mortgage might want to consider a home equity line of credit if they hope to add value to their home before a future sale. Qualified borrowers can put their home up as collateral and receive an open line of credit for major purchases such as home renovations, student loan repayment or a down payment on a car.
Chicago's housing market from 2013 to 2014
According to the Chicago Tribune, many housing experts feel that if the median home value increased at a more gradual rate in 2014, it might actually help the city's housing market more than the type of skyrocketing prices often seen on the West Coast.
"Less robust would not be a bad thing here," economist Michael Gregory told the Tribune. "You don't want to see a bubble."
A slower gain in the market could stem from higher interest rates, fewer residential investors and a limited selection of available homes, according to the Tribune.
Median prices up
ChicagoRealEstateDaily.com recently reported that median prices at the end of 2013 in Chicagoland reached $177,500, a 10.9 percent surge from $160,000 in 2012.
"I hope (prices) will spur the inventory as well; we need something other than new construction to do that," real estate broker Jeff Lowe told the website.
In an interview with the Tribune, Curtis and Samantha Schatz can relate to Lowe's claim. The couple looked at 48 Chicago-area homes before finding the right property and moving in last month.
"We looked from Bartlett to Bolingbrook and everywhere in between," Curtis Schatz said. "There was a lot of garbage. The first two times we went out, we looked at 16 houses. There wasn't one that we kept the listing sheet."
People shopping for homes in the Windy City last month had just 32,000 listings to choose from. The same month a year prior, prospective buyers had 45,000 homes to look at.
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