After some worries that the recent hikes in interest rates were going to cool down the Chicago real estate market and put a damper on home prices this year, it has been interesting to see the real estate market continue on its upward trajectory without slowing down too much.
To the surprise of many, some of the biggest growth is happening on the south side of the city, where there are still some distressed properties that people are rehabbing. Homes in certain parts of Bronzeville are up 29% this year, which is pretty staggering.
Low inventories certainly helped to keep the market tight and prices up. The median sales price was up 3% over 2017, compared to 2017, when prices were up 4% from 2016. The average days from listing to contract actually decreased, from 14 to 12.
Though the real estate market is strong this year, the Fed has indicated that it expects to make four more rate hikes in 2018 alone. With interest rates come off their historic lows and possibly even getting above 5%, it’s likely that demand will decrease. As the Chicago real estate market has been hot for over five years, this may not be a bad thing for buyers—those who stay in the market will have more homes to choose from and less competition for them.
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