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4 to 5 years ago I had the unenviable task of telling sellers that their $400,000 home (based on 2006 prices) was then worth $300,000. I often heard "I understand that my home went down in value but it can't be that much! I'm not giving it away!"
I had to explaining to them that selling their home at its current value isn't giving it away, it's selling it for its current value. Yesterday is yesterday… we have to live with today.
Now values are going back up (some areas more then others). Not to where they were in 2006 yet but they are going up steadily. Again I have the unenviable task (this time with buyers) of telling them that they can't buy at the bottom. The bottom was yesterday (actually a few years ago).
Buyers in the future will likely realize that values are going to continue to climb for a while and interest are certainly going to rise. Waiting will put me in that position again where I will have to explain to them about the good days of 2015, when prices and interest rates were lower. Yesterday is yesterday… we have to live with today.
Just a little insight from a 38 year veteran of this business.
2013 was a good solid year for the real estate rebound. The bad side was that we had a shortage of listings. The good side was that we finally saw prices increasing, removing part of the 35% average drop that we saw in Chicagoland.
2014 started off slowly after the hard winter and then rebounded to become more like 2013 through mid year. From mid year on, things slowed down. It wasn't bad, it just didn't live up to 2013 standards. Prices started to soften a little.
2015 shows great promise. Interest rates are down again (under 4%) and inventories are low. People seem to have come to the reality that these rates are not here to stay. I always share with our clients that my parents bought their first house in 1950 (before I was born!) with a 5.5% mortgage. These rates cannot last at these levels!
The other good news is that lenders are softening their guidelines a bit. During the recession regulations got tighter and tighter. Now finally, there is some relief. FHA just reduced their private mortgage insurance by .5% reducing payments significantly. FNMA has now made 3% down conventional loans available to well qualified buyers.
I do expect prices to move up this year. I'm estimating 3-5%. Sales will, within my expectations, be at the highest level in the past 7 years. We have a long way to go to recapture peak values, however every step helps.
Inventory of homes for sale is very low. Prices are on the rise. Interest rates are on the rise. Prices are still much lower then 7 years ago. Those are the facts, so how do we use them to your advantage?
If you are actively looking for a home and you can't quite find everything you are looking for, what will be the result of the facts above? Your perfect home is getting further and further away. Don't settle, but realize that if you don't act, your dream home is running away from you.
If you are waiting for something, don't. Read the facts above and realize that now is the perfect time.
Call us and let us help you review your personal needs. 847-363-5993 Our services are always free to buyers!
-Jeff & Laurie