Buying Or Selling? Real Estate 2016

By: Maria Girlie Pascual

 

If you are thinking of buying a bigger home or downsizing, maybe looking to own your first home but are still nervous about moving forward with your plans, let me help you understand what is going on in the real estate market in Illinois based on statistics gathered by the Illinois Association of Realtors, of which I am a member.

The information here was generated from closed sales data posted with the Multiple Listing service by 28 participating REALTOR associations and local boards including Midwest Real Estate Data from the year 2015.

As of December 2015, statewide home sales were up by 1% from December 2014, but the total year end percentages posted at a promising 5.9% from all of last year’s sales. Broken down, this was equivalent to 155,676 total number of homes sold in 2015, versus 147,051 in 2014.

Impressed? The median prices are even better. The average home in Illinois was priced at $154,000 in December of 2014. In December 2015, the median price was at $165,000. The median price of a home translates to the typical market price where half of homes that went on the market for sale sold for more than asking, and half of the inventory of homes sold for less than the list price. Based on this, the year end median price for 2015 was at $173,000, up by a promising 8.1% from $160,000 in 2014.

Inspiring? Yes, it is. According to Mr. Dan Wagner, current President of the Chicago Association of Realtors, we are currently experiencing a very active market where inventory continues to be acquired rapidly, resulting sometimes in a shortage of properties particularly in the Chicagoland area. He predicts that this momentum will continue on to the new year despite the announcement the Federal Reserve Board was raising interest rates.

Even if rising interest is looming in the horizon, this will not affect mortgage rates immediately. Real estate experts say that we are 18 to 24 months away from that, predicts that housing construction will rise in 2016 and 2017, and along with that, home prices as well.

Because we are still recovering from the real estate debacle of 2008 to 2012, the younger generation is leery about owning property, witnessing boarded-up properties, multiple vacancies and maybe has had family members losing their homes in the crisis. This begs the question, “Is owning a home still a good investment?”

Since the mid-70’s, homes have appreciated at an average rate of 4.5% a year, nationwide, while beginning in the 1890’s, it was at a 3% annual increase in nominal value based on historical housing data. Comparing that to stocks in the same periods, these have had a long-run average return of 9.8% which include dividends. Sure, housing was a great investment in a good economy, but as we have learned, an economic turnaround could have devastating results.

Hopefully, we all learned our lessons with tighter financial qualifying guidelines in place and changes in the transparency of information with the introduction of the new TRID rules this past October. TRID stands for TILA (Truth-In-Lending-Act), RESPA (Real Estate Settlement Procedures Act) Integrated Disclosures which combines four existing disclosures in these two acts to help buyers better understand what they are paying for in a real estate transaction, and to promote industry compliance amongst the real estate professionals- lenders, attorneys and brokers.

To fully grasp the benefits of home ownership, it is always best to consult with your accountant first, because the returns vary from family to family based on their financial situation. This is where math comes in; however, to homeowners, privacy, flexibility, even a little pride may be worth the investment of owning your own castle, a condo, maybe the small house with the white picket fence.

For more information or to find out how to move forward with your plans to buy or sell, text or call me on my cell at (847) 912-3997.

I have been a full time broker since 1987, have handled and successfully counseled, listed and sold short sales and foreclosure properties, even worked with first time buyers to be their guide in one of the most exciting times in their lives. Even investors have benefited from my vast experience and knowledge, so talk to me—I’m listening.

Bang for your buck in Schaumburg

The best schools in the area, and a home made for you.

A dream home in the making.

 

Congratu lations Steve and Sarah!