Those few, brave home-sellers who put their homes on the market in Evanston during the first two months of this year were rewarded with lots of buyer interest, many showings and quick contracts. A good number received multiple offers on their property. These are all signs of a “seller’s market”. But the total volume of sales remains significantly down compared to January and February of the last two years, raising the question, “Is this just a short-term, local-supply-driven spike in prices?” Traditionally, the Spring months of March, April and May are the peak months of home-selling activity. Will the number of available homes for sale during the Spring of 2013 return to “normal” levels? Will buyer demand remain this strong during the next several months? With Spring just around the corner, many home-owners and home-buyers are wondering “Which way are home prices headed next?”
The following sources are in favor of the viewpoint that we will see a continued upward trend in prices during the rest of 2013:
- The Tribune reported a 2.2% increase in prices in the Chicago-area during 2012.
- The Illinois Supreme Court released new foreclosure rules which will further slow the pace of sales of properties in default.
- The Illinois Association of Realtors reported a state-wide increase in prices in January 2013.
- The Data-aggregators & rebate-Realtors at Redfin.com tout the strength of the 2013 market for sellers around the country.
But there are other viewpoints on which way home prices are headed:
- The S&P/Case-Schiller Index showed signs of 4th Quarter weakness in price gains, particularly in the Chicago market.
- In a Wall-Street Journal interview this week, Robert Shiller expressed real concern about the heavy government involvement in the mortgage market which is propping up prices through generational-low interest rates.
- In his report to congress this week, Chairman Ben Bernanke of the Federal Reserve acknowledged that there are limits to the future effectiveness of the Fed’s “highly accommodative monetary policy” while Federal budget deficits remain so astronomically high.
A 1-2% annual gain in prices seems to be a safe assumption at this time, but nobody knows precisely what the future will hold.
And while these financial matters are so very important, there are other factors to consider. Do you like where you live? Is it a good place for your family to share life together? Is it possible to improve your quality of life by making a buying or selling decision in 2013?
Nationwide market data trends are important. But so is local market knowledge of the actual housing options that are available for your family. Thinking through it all with the assistance of a Realtor remains a wise decision. It would be my pleasure and privilege to serve you and your family as you consider your housing-related decisions this year. Let’s talk. Let’s go do some “housing for good”.