“Give me a one-handed economist! All my economists say, On the one hand, on the other.”
Well, President Truman was right that when predicting the future of the economy, you’ll hear as many stories as there are economists. Sometimes, however, the data are so compelling that something has to give and it’s pretty clear in which direction. As a Realtor, this is my shot at a “one-handed” prediction. The nearby tables will be helpful as a reference, particularly for individual city data.
The area housing market story is pretty clear to me. We’ve heard stories about the inventory decline nationally and some theories behind it. The decline in homes for sale in St. Charles, Geneva, Batavia and South Elgin is even greater than the decline nationally. The number of homes listed for sale in those four cities in January 2013 dropped 25.9% versus January 2012 and 36.2% versus January 2011. That is a steep, steep drop in the “supply” of homes.
What of the demand?
Well, one measure of demand, and perhaps the best measure, is how many homes are currently under contract. When comparing the month of January in 2011, 2012 and 2013, the strengthening demand clearly emerges. Homes under contract in January 2013 in these four cities increased by 108% versus 2011 and 65.4% versus 2012.
Key takeaway: This is a strengthening market.
So if you’re considering participating in this market, what should you expect? First, if you want to buy, understand that there are other buyers chasing the same limited inventory of homes for sale in St. Charles, Geneva, Batavia and South Elgin and that if you like something, move decisively. We’re seeing plenty of multiple offers right now.
As a seller, you may have been on the sidelines because prices have decreased over the past several years. This shift hasn’t created a return to 2005 pricing levels but it is giving sellers increased leverage and that includes pricing leverage. Now is the best time to be aggressive from a pricing perspective that I’ve seen in the past five years.
Finally, as a seller I would move now to step into this market. The benefit of getting on the market now is that you take advantage of the limited inventory. Wait until April and that advantage diminishes as other sellers come online into the traditional “spring” selling season when traditionally the homes listed for sale grows 10-16%.
I hope this “one-handed” information has been helpful. You may contact me at 630-254-5004 or at my website www.scottnowling.com if you have questions or would like additional information.
This representation is based in whole or in part on data supplied by Midwest Real Estate Data LLC for the period January 2011 through January 2013. Midwest Real Estate Data LLC does not guarantee nor is it in any was responsible for its accuracy. Data maintained by Midwest Real Estate Data LLC may not reflect all real estate activity in the market.