Chicago’s real estate market has had one of the strongest rebounds in all of the United States. But the end of 2013 saw a slight cooling off of home prices, leading investors to question which way the real estate market is headed.
From the low point of March 2012 to the highs of September 2013, prices had grown by 18.5% for homes and 23.5% for condos. A part of this was due to the incredibly favorable mortgage interest rates being offered by banks, with buyers routinely being able to secure fixed rate mortgages around 3.5-4%. The buying rally that ensured also led to the largest decrease in home inventory since the beginning of the recession.
Experts predict that prices will continue to rise, but at a slower pace than they have been until now. Rising interest rates (they’re around 4.5% now) will decrease the rate of sales, as will the tightening of credit due to worries that the Fed will discontinue its quantitative easing policy. Much of the stock of great-deal foreclosed properties is now off the market.
The general agreement is that the market has moved beyond being a buyer’s market to being a seller’s market. The current real estate prices in Chicago reflect this, though they are still a long way off from their 2006 highs. It is estimated they are currently around 2002 levels.
In other words, the time to make a quick buck off the real estate housing crisis has passed. However, long term investors will still find some very lucrative deals out there, because prices are only going up, and will likely not be this low for a long time to come.