Are you interested in buying a new home and don’t know where to start? First time home buyers and experienced buyers alike will have questions any time they choose to invest in a home. The Illinois housing market can sometimes be unpredictable, which makes buying a home a huge risk for many of us.
Currently, the nationwide housing market is doing well and continues to strive throughout 2018. There are some parts of the nation experiencing a decrease in home availability, which has made it a seller’s market for most of the country.
While this isn’t necessarily a bad thing, it can drive the price of affordable homes up to a point where they are unaffordable for some potential buyers.
The Current Status of the Illinois Housing Market
The price of homes on the market continues to climb as sales shift much lower than they were in January. A low inventory of available housing and an increase in buyer demand can drive the average cost of homes up all throughout the state. And that leads to a decrease in overall home sales in Illinois.
Throughout the state, sales for single-family homes and condominiums totaled 8,151 in the month of February. That is a decline of 5.1% from the 8,585 homes that sold in February 2017.
The median price for homes in Illinois reached $185,000 in February, which is up 8.8% from where it was a year ago when the average price was at $170,000.
With the constant shortage of available homes on the market, those in the real estate industry are expecting the Spring market to be great for sellers and not so good for buyers who are on a tight budget with little time to make decisions.
Buyers who find a home they can afford and are happy with will need to act quickly to secure the home of their dreams before another buyer makes a better offer.
There has been an increase in the number of houses that were made available on the market in February 2018. Yet we are still far from having enough housing inventory to satisfy the demands of current buyers.
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What are the Statistics for Illinois Housing Inventory?
In February, the average amount of time it took to sell a home in Illinois was 71 days. That is down from the average of 74 days in 2017. The total of available housing inventory at the time was 47,108. That is a 12.0% decrease from one year ago when the Illinois housing market had more than 53,000 homes for sale.
The statistics for homes throughout Illinois’ metro areas are consistent throughout the state. The Chicago Metro Area saw home sales for both single-family residences and condominiums this past February that totaled 5,722 homes sold. That is a decrease from the number of homes sold last year which was a total of 5,971.
The average price of a home in Chicago this past February was $227,500. In 2017, the average cost was $210,000.
The Effects of Fannie Mae, Rising Interest Rates, and Tax Laws
The Fannie Mae Home Purchase Sentiment Index is decreasing, and potential buyers are hesitant when it comes to making a new home purchase. Increases in interest rates are expected to occur later this year and there is some uncertainty due to the tax reform legislation and how it will impact the Illinois housing market.
Along with the high demand for available housing in Illinois and concerns about the affordability of entry-level homes, this year’s overall sales numbers are expected to be much lower than they were in 2017.
However, real estate experts like Rebecca Thomson, the president of the Chicago Association of Realtors, say that buyers need to be proactive in the current real estate market.
Thomson states that “With inventory tightening, buyers may need to account for a long search. In that same vein, prospective sellers may delay listing their homes until after they’ve identified where they plan to go.”
The high demand for homes could make this a catch-22, however, when the right opportunity is in front of you, the buyers need to act immediately to secure their home purchase.
The Illinois Housing Market for 2018
According to data from the Zillow Home Value Index, the median home value in the state of Illinois is at $173,165. Home values have gone up throughout the state as much as 5.4% from last year. Zillow predicts that home values will continue to rise 3.7% throughout the year.
The average listing price per square foot in Illinois is currently at $135. That is significantly higher than several other states, which is good news for those hoping to sell. The lowest that the average price per square foot has been in the state over the past few years was $95 in October 2012.
Overall the Illinois Housing Market Health Score according to Zillow is at 0.9 out of 10 which is less healthy when compared to other states. This could be due to the rise in home value and a decrease of affordable housing options for buyers who wish to move to the area.