Home sales in the Chicago area remained strong into the autumn months, with October purchase contracts rising sharply over last year’s levels. Crain’s reports that single-family homes saw a 22% increase in purchase activity compared to October 2016. Condo and townhome purchase contracts increased by 8%.
Despite the rising home values and quick sales that would normally entice homeowners to sell, most Chicago homeowners are staying put. ATTOM Data Solutions studied how long Chicago homeowners held on to their properties after purchase, and found that the average Windy City tenure was currently 8.7 years. This is the longest period of ownership since ATTOM began tracking the statistic in 2004.
Back in 2006-2007, Chicago homeowners were keeping their properties an average of 4 years. This was during the end of the housing bubble, when speculative purchases made with easy mortgages were fueling an overheated market. The party started winding down in early 2007, with the housing bust and the Great Recession to follow. But until that national wake-up call happened, short-term home ownership wasn’t all that unusual.
Chicago real estate prices were slow to recover after the Great Recession. Some homeowners who purchased right before the housing bust haven’t regained enough equity to sell at a profit. Yet this isn’t the whole story.
In the face of rising rents, home ownership has become an economically defensive move. And those who bought homes during the market doldrums accomplished two things: home ownership at bargain prices, with crazy-low interest rates. This translates into cheap mortgage payments that can’t be duplicated today if these owners were to sell and “trade up” to larger or newer homes.
This doesn’t mean current homeowners will never sell. As we explained in our prior blog post, there are a variety of reasons why people put their homes on the market; it isn’t always about making a profit. But for homeowners who are only looking at the bottom line, the small mortgage payments they have today are hard to beat.
StartingPoint Realty – your Chicago home buying experts!
StartingPoint Realty proudly serves first-time home buyers throughout Chicago and the Northwest suburbs. We provide complete education and guidance during the entire home buying process! Attend a free home buying seminar to begin your path to home ownership!
We provide great resources to help you become a successful home buyer! Need down payment assistance? Check out our list of home buyer assistance programs on our website!
Always feel welcome to contact us for help with your Chicago home buying questions!
Ryan Gable Broker/CEO Starting Point Realty
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