Mortgage interest rates have hovered above 7 percent for the last few weeks. Despite interest rates being at the highest levels in 20 years, Chicago home buyers are snapping up properties at a brisk pace. Between July 2023 and August 2023, Chicago homes averaged just 29 days on market before going under contract.
Right now, home buyers remain more plentiful than new listings, though we’re seeing modest improvement. During August, the number of new listings increased 12.5% from a year ago. However, last year’s home inventory was far below normal. We are still looking at tough market conditions for buyers, thanks to a triple whammy of high interest rates, stubbornly-low home inventory, and rising home prices.
Yes, home prices are still rising. City of Chicago median home prices were up 5.6% on a year-over-year basis as of July, reaching a median sales price of $285,000. There wasn’t any relief in the suburbs; the median home price in the Chicago Metro Area increased 5.3% as of July, with a median price of $340,000.
We do have some important caveats to attach to this. Every home is unique, and statistics aren’t the whole story. You will see vastly different market conditions depending on the location and condition of the property. Prices are going to be higher when a home looks like new, and it’s located in a trendy neighborhood. This is why you’ll find listings with price reductions right alongside of listings that sold for above-asking price.
Wait, did we say price reductions? Yes we did. According to data from Rocket Mortgage, about 1,105 Chicago homes sold below asking price during August 2023. Another 346 homes sold for the original asking price, with no adjustment. There were 778 homes that sold for more than the asking price. When you boil it down, about half of all August home sales included a discount from the list price.
How do you know when you can haggle on price? Tough question. In general, if the home has more days-on-market than its competition, or needs work, there may be wiggle room on the price. The key is to be specific about the basis for your lower offer. Ideally this should be done by comparing recently sold, similar homes in the area, and telling the seller you love the house, but need a better price, due to market conditions. This is very true if you are getting a mortgage, since the purchase price will need to be backed up by the bank appraisal. (Unless you pay the difference out of pocket.)
StartingPoint Realty – serving Chicagoland since 2004!
StartingPoint Realty proudly serves home buyers and sellers throughout the entire Chicago area. Contact us for your free home buying or home selling consultation!
Ryan Gable Broker/CEO Starting Point Realty
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